A proposed cap on emissions of greenhouse gases (GHGs) will limit production growth from Alberta’s oil sands and cost the provincial economy as much as $254.74 billion (Can.) during 2025-40, according to a study by the Fraser Institute.
The Alberta government’s proposed 100-megatonne cap on GHG emissions could reduce cumulative production by 3.34 billion bbl of oil during that period, the study estimates, based on production forecasts of the National Energy Board and current emission-intensity levels.
Lower emission intensity of oil sands production would delay the production cap to 2027 and trim cumulative losses to 2.03 billion bbl of oil and $153.41 billion (2015 dollars).
The policy will lower global GHG emissions by 0.035% by 2040, the study says.
Cumulative emission abatement could be 236 megatonnes of carbon dioxide-equivalent, at an average cost of $1,035/tonne of GHG emissions under current emission intensity, the study estimates.
Emission-intensity reductions would lower the cumulative emission abatement and raise the cost.