Alberta climate-change policy is 'strong leadership,' says Cenovus CEO

As Albertans continue to wrap their minds around the provincial government's major shift in climate-change policy, the president and CEO of Cenovus ​says the strategy isn't all that radical, in his view.

"I'm not sure I would use the word 'radical' to describe being a leader," Brian Ferguson told The Calgary Eyeopener on Monday morning.

"I would describe it as being bold. I would describe it as something that is very significant, something that all Albertans should now be able to take pride in."

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The head of the oilsands giant believes the plan strikes an "appropriate balance" between curbing greenhouse gas emissions while also setting the stage for continued development in Alberta's energy industry.

He praised the strategy for placing a hard cap on oilsands emissions, but not oilsands production, saying the industry can continue to improve its environmental impact.

Calgary Eyeopener7:25Cenovus CEO Brian Ferguson on Alberta's new climate-change plan

Cenovus CEO Brian Ferguson on The Calgary Eyeopener, talking about Alberta's new climate-change plan that involves an economy-wide carbon tax and a cap on oil sands emissions, but not oil sands production.

"One of the things I really like about this policy is it provides very strong incentive to focus on technology solutions," Ferguson said.

"I'm a strong believer that oil can be a part of a low-carbon future. What we've got to do is focus on the technological innovation and solutions to make that happen."

Reputation and market access

Environment Minister Shannon Phillips said Alberta's international trading partners have "already taken notice" of the province's new climate-change position and predicted the shift will lead to more willing buyers of energy exports. 

"It'll improve our access to new markets, and it protects jobs," Phillips said, also speaking on The Calgary Eyeopener Monday morning.

Calgary Eyeopener8:40Environment Minister Shannon Phillips on her government's climate-change strategy.

Environment Minister Shannon Phillips joins host David Gray on The Calgary Eyeopener to elaborate on her government's plan for an economy-wide carbon tax, a hard cap on oilsands emissions, the phase-out of coal, and the future of Alberta's energy industry.

"It's a balanced approach to how we are going to continue to be an energy producer in the 21st century, in a carbon-competitive and carbon-constrained world. Energy companies understand that."

Ferguson, for his part, said the policy change ought to change international perceptions of Alberta's energy industry.

"Optics, in my opinion, should always be driven by performance," he said.

"This is strong leadership, strong performance."

Fair to Albertans?

The new policy also calls for a $30-per-tonne charge on carbon emissions, fully phased in by 2018. That's a shift from the province's current carbon levy, which applies only to large-scale emitters.

Asked if that's a reasonable burden to place on individual Albertans, Ferguson said it's "very fair" because the goal of the strategy is to reduce overall emissions and the vast majority of emissions come from the consumption of fossil fuels, not the extraction of it.

"Industry obviously is going to bear a significant cost ... but it will absolutely have to have an impact on each of us, individually, in our everyday lives," he said.

The head of the Canadian Association of Oilwell Drilling Contractors (CAODC) says the new revenue collected by the Alberta government should be reinvested at the direction of an independent advisory board to ensure it's put to the best use possible.

"If this is a truly  revenue-neutral tax, every dollar raised through new carbon taxes should be made available to industry in order to reinvest into new technology to achieve emission reductionism," said Mark Scholz in a release.

To offset the new burden of the carbon tax, the government should consider reducing oil and gas royalties, he added. 

Consumers to pay more 

The province estimates the carbon tax will amount to roughly $470 in increased heating, electricity and transportation costs for an average household in 2018, assuming that household consumes the same amount of fossil fuels as it did in 2015.

Phillips, however, said the province plans to introduce an income-based rebate program to reduce the financial impact on most Albertans.

"At least two-thirds of households will see their increased costs rebated," she said.

Phillips declined to elaborate on exactly how those rebates will work.

"We will have more to say about that in the coming days and weeks," she said.

"It will form part of our budget 2016-17 deliberations. We are interested in hearing from Albertans on that matter."