LETTER BY THE PRIME MINISTER TO THE CANADIAN
ASSOCIATION OF PETROLEUM PRODUCERS
July 25, 2003
Ottawa, Ontario
Enclosed is the text of a letter sent on July 24, 2003 by Prime Minister Jean
Chrétien to John Dielwart, Chairman of the Canadian Association of Petroleum
Producers.
Dear Mr. Dielwart:
As you well know, senior Government officials and senior oil and gas
executives, as well as other private sector stakeholders, have met on several
occasions over the past few months to discuss ways to increase certainty in the
long-term development of the oil sands and the implementation of Canada’s
climate change commitments.
I am advised that these discussions have been extremely useful in helping to
frame principles that would provide greater certainty to the environment
surrounding long-term investments. I am pleased to attach, for your information,
a list of principles developed through the discussions as the basis for moving
forward on this important initiative
I know that the Canadian Association of Petroleum Producers has been a
central participant in these discussions, and I am grateful for your efforts in
this regard. Together, industry and government can continue to find innovative
ways to reduce greenhouse gas emissions, while maintaining our enviable
performance in economic growth and job creation.
Yours sincerely,
[Original signed by the Right
Honourable Jean Chrétien]
The following principles will guide the Government of Canada and the oil and
gas sector in pursuing their climate change commitments.
1. Post 2012 policy and national targets: Future
emissions-reduction targets will be guided by the commitment in the Climate
Change Plan that "we need not — and we will not — export
Canadian jobs in order to meet our climate change goals." In
particular, the government’s intention is that future emissions-reduction
targets will not make Canadian oil and gas production uncompetitive.
Industry will be consulted on the technical feasibility and economic
impacts of targets for the period post-2012.
2. Efficient implementation: The Government of Canada will seek the
most efficient means of implementing climate change policies, drawing on
existing reporting and regulatory processes where appropriate. It will
promote harmonized policies with a single efficient,
federal-provincial/territorial harmonized reporting, verification and policy
enforcement system where feasible.
3. Equitable treatment: The Government of Canada’s commitment to
a maximum emissions reduction of 15 per cent in the oil and gas sector in
the period 2008-2012 reflects the important and enduring principle that no
sector will be treated inequitably. This principle will continue to guide
policy for the period after 2012.
4. Other environmental regulations: The
"business-as-usual" reference for intensity targets will take into
account future Federal environmental regulations. A consistent approach
across all Federal policies will avoid imposing a GHG penalty on mandated
actions to improve environmental performance.
5. New project phase-in: Emissions targets for new projects will
be based on the targets for the best-practice existing facilities using
similar technologies, taking into account the specific geological and other
characteristics of the projects. The Government of Canada will agree to lock
in the gargets for new facilities for up to ten years from first production
in order to provide certainty during the projects’ pay-out period.
6. Flexible offset options: Project operators will have flexible
options for meeting emission targets. Emissions below targets will generate
credits that can be banked or transferred. Offset options will include:
a) Offsets generated by reductions in other facilities of the
operator;
b) Qualifying domestic and international offsets; and
c) Exercising the $15/tonne CO2 price assurance provided
by the Government of Canada through 2012.
7. R&D expenditures: Recognizing that innovation and
technological advance are the key to significant GHG reductions over time,
methods will be developed to integrate into the compliance options an
incentive to increase qualifying R&D to reduce carbon intensity.
8. Tax Treatment: The costs incurred by tax payers to comply with
emission targets and that represent a cost to earn income will be addressed in a manner consistent with other comparable
operating and capital expenses.
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