CALGARY – The Calgary Chamber of Commerce is warning Ottawa that its proposed cap on emissions from the oil and gas sector could compromise the valuation of the Trans Mountain pipeline.
Canada’s oil industry has been fighting tooth-and-nail against the promised cap, which the federal government has said it expects to finalize later this year.
The government has said that under its proposed plan, the oil and gas industry will have to cut emissions by more than one-third by 2030 or buy offset credits.
It has said the cap is meant to cap pollution, not production, but the industry has warned the cap will have “unintended consequences” that could cause companies to curtail their output.
The Calgary Chamber of Commerce says any perceived risk to Canada’s oil output could create the perception that the Trans Mountain pipeline might not be able to rely on a steady and predictable flow of oil. It says that will result in a lower valuation by investors and a lower price received when it is sold.
The Trans Mountain pipeline expansion project, which is owned by the federal government, is more than 98 per cent complete. The government has long said it does not intend to be the long-term owner of the pipeline and has launched talks with Indigenous groups who may be interested in purchasing a stake in the asset.
This report by The Canadian Press was first published March 27, 2024.