An industrial carbon price will cost Alberta oilsands producers an average equivalent of about a Timbit per barrel of oil, according to a new analysis by the Canadian Climate Institute. This projection, based on the carbon price rising to $130 per tonne, suggests a cost of approximately 50 cents per barrel, a stark contrast to other higher estimates.
The institute's executive vice-president, Dale Beugin, stated the analysis aims to bring "reality" to provincial-federal pipeline talks, urging data-driven discussions over speculation.
The analysis shows a wide cost range among facilities, with some potentially earning carbon credits. Critics argue any cost impacts competitiveness, but energy economist Andrew Leach questions the sector's portrayal as both an economic engine and inherently precarious.
Strengthening the industrial carbon price was a key element of a recent memorandum of understanding between Alberta and Ottawa, aimed at providing policy certainty for long-term investment.
While oilsands production contributes significantly to Canada's emissions, absolute emissions have risen due to increased production, despite per-barrel efficiency gains. The broader question of a national carbon pricing regime remains a critical federal concern.
