Quebec and federal government enter St. Lawrence offshore oil deal

Posted on April 6, 2011

Quebec and the Federal Government have entered an agreement to give the province 100 per cent of the oil and gas royalties from the portion of the Old Harry formation that lies within the province’s undersea boundary in the Gulf of St. Lawrence.

The Old Harry formation, which may contain up to 2 billion barrels of oil, straddles between the undersea boundaries of Quebec and Newfoundland & Labrador. The agreement relies on the 1964 undersea boundary between the two provinces. Quebec Premier Jean Charest indicated the agreement contains an arbitration clause to deal with potential boundary disputes.

Quebec is under a self-imposed moratorium on offshore drilling until 2012, and will continue its course despite the signing of the agreement.
 

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California Releases Proposed Cap-and-Trade Regulation

Posted on November 1, 2010

On October 28, 2010, the California Air Resource Board ("CARB") announced the release of its proposed greenhouse gas cap and trade regulation  as part of the state's commitment to the Western Climate Initiative ("WCI"). British Columbia, Ontario, Quebec and Manitoba plan to join California and several other states in the launch of the WCI cap and trade market in 2012.
 
A key part of CARB's AB 32 Scoping Plan, the cap-and-trade program provides an overall limit on the emissions from sources responsible for 85% of California's greenhouse gas emissions. The release begins a 45-day public comment period culminating in a December 16, 2010 public hearing at which CARB will consider adopting the proposed program.

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California vote could hinder cap-and-trade efforts

Posted on October 25, 2010

The viability of a California cap-and-trade program will hinge on the outcome of the state's November elections. Voters in California will decide on a proposition to delay action on climate change until certain economic targets are met, and the Republican candidate for governor has also promised to revisit the current climate change plan.

As reported in the Calgary Herald, this could potentially have a strong ripple effect on the developing North American carbon trading industry. British Columbia, Ontario, Quebec and Manitoba plan to join California and several other states in the launch of the Western Climate Initiative cap-and-trade market in 2012. While many observers are confident that the program will proceed regardless of the outcome in California, there is concern that the loss of the group’s largest economy could hinder the market's liquidity and efficiency.
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Québec moves to create oil and gas regulatory regime

Posted on September 2, 2010

Québec’s Cabinet has requested that the Bureau d’Audiences Publiques sur l’Environnement (“BAPE”) hold public hearings beginning September 14 regarding the creation of a new oil and gas regulatory regime for Québec. 

Québec currently does not produce oil and gas in significant commercial quantities, yet prospective areas for production, especially the shale gas in the Utica formation of the St. Lawrence Valley, are now fully leased.

Québec’s oil and gas resources are currently legislated under the province’s mining rules and regulations, where depending on the size of production, gas producers pay royalties of 10 to 12.5 percent. Producers must also conform to a patchwork of municipal, regional and provincial permitting laws. 

The creation of a single regulatory regime would “create a fiscal and legal framework that can make a company decide to invest in Québec rather than Pennsylvania” says Québec’s Natural Resources Minister, Nathalie Normandeau.

As part of the public hearings, BAPE will conduct a review of the environmental, health and safety issues surrounding the practice of hydraulic fracturing, or “fracking,” a procedure where high pressure fluids are injected into rock formations to release hydrocarbons.

BAPE’s review of fracking practices falls on the heels of the U.S. Environmental Protection Agency launching a similar study, as well as a temporary moratorium on fracking that was approved by the New York State Senate in August and will be reviewed by the New York State Assembly in September.

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Quebec proposes legislation to broaden greenhouse gas emissions reporting requirements

Posted on June 15, 2010

Jason Streicher

On June 2, 2010, Quebec's Ministry of Sustainable Development, Environment and Parks announced that it has published, for a 60-day public consultation, amendments to the Regulation Respecting Mandatory Reporting of Certain Emissions of Contaminants into the Atmosphere (the Regulation). The amendments are meant to harmonize the Regulation with the common policies adopted by the members of the Western Climate Initiative (the WCI). The partners of the WCI are comprised of 7 U.S. states, including California, and four Canadian provinces, namely British Columbia, Manitoba, Ontario and Quebec.

The current Regulation sets the greenhouse gas (GHG) emissions reporting threshold at 50,000 tons of carbon dioxide (CO2) equivalent per year. The amended Regulation would lower the threshold and require reports be provided by Quebec enterprises that have emissions of 10,000 tons of CO2 equivalent per year or more. If enacted, the amended Regulation would also prescribe the methods to be used to quantify emissions and would require emitters of more than 25,000 tons of CO2 equivalent per year to have their emission reports verified by an accredited organization.

 

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Québec announces target to reduce greenhouse gas emissions by 20% below 1990 levels by 2020

Posted on December 27, 2009

Alix d'Anglejan-Chatillon and Jason Streicher

On November 23, 2009, Québec's Minister of Sustainable Development, Environment and Parks announced Québec's target to reduce greenhouse gas emissions (GHG) by 20% below 1990 levels by the year 2020. The Minister elaborated that "the reduction target will show flexibility from one economic activity sector to another in accordance with the reduction potential of each, international competitiveness, available technology and required transition measures."

In order to achieve the announced reduction target, the Minister suggested that Québec will make major investments in mass transit and will establish means to encourage the increased use of intermodal transportation of goods. This initiative is in addition to the previously announced introduction of a GHG emission standard for light-duty vehicles, equivalent to the California standard, and investments to encourage the use and development of Québec's expertise in the electric vehicles sector. Lastly, the Québec government has stated that in order to achieve its reduction target, a GHG cap and trade system will need to be implemented in 2012 and, to this end, Québec expects to participate in establishing the largest GHG cap and trade system in North America in conjunction with its partners in the Western Climate Initiative.

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Québec introduces bill aimed at reducing greenhouse gas emissions

Posted on June 4, 2009

Will require certain emitters to report emissions and will set emission caps using a 1990 baseline

Alix d'Anglejan-Chatillon and Jason Streicher

On May 12, 2009, Québec's Minister of Sustainable Development, Environment and Parks introduced a bill (Bill 42) to amend Quebec's Environmental Quality Act and Other Legislative Provisions in Relation to Climate Change to Québec's National Assembly. Bill 42 aims at reducing greenhouse gas (GHG) emissions. Bill 42 proposes a cap-and-trade system which distances itself from the currently proposed Federal system and which is more in line with what the new Obama administration has suggested may be adopted in the United States.

When adopted, Bill 42 will establish:

  • the reporting of GHG emissions by certain categories of emitters determined by regulation, so that an inventory of GHG emissions may be taken and updated;
  • the ability of the Québec Government to set by order GHG reduction targets using 1990 GHG emissions as the baseline. It is currently expected that reduction targets will be phased in from 2012 to 2015 for certain electricity-producing companies and other major industries that emit more than 25,000 tonnes of GHG a year, and after 2015 for other emitters;
  • requirements for certain categories of emitters determined by regulation to cover their GHG emissions with an equivalent number of emission allowances, including emissions units, offset credits, early reduction credits and other specified emission allowances;
  • a cap-and-trade system to assist emitters to achieve the GHG reduction targets and to mitigate the cost of reducing or limiting GHG emissions. It is expected that the cap-and-trade system will allow persons and municipalities to trade emission allowances;
  • the ability of Québec's Minister of Sustainable Development, Environment and Parks to enter into agreements with foreign governments, international organizations and agencies for the harmonization and integration of cap-and-trade systems;
  • that all funds collected by the Government under the legislation will be used to finance GHG reduction, limitation or avoidance measures, the mitigation of the economic and social impact of emission reduction efforts, public awareness campaigns and adaptation to global warming and climate change, or to finance the development of and Québec's participation in related regional and international partnerships.

It is currently expected that Bill 42 will be adopted by the end of June and that the first set of regulations under the legislation will be implemented in Fall 2009. It is also expected that emission credits will be traded on the Montreal Climate Exchange (MCex) that was launched last year.
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Ontario and Quebec announce plans to create interprovincial cap and trade system

Posted on June 26, 2008

Amy Hu and Kirsten Iler

At a joint cabinet meeting held in Quebec City in early June, Ontario Premier Dalton McGuinty and Quebec Premier Jean Charest signed a Memorandum of Understanding with respect to a provincial and territorial cap and trade initiative. The accord sets out the two provinces' plans to create an interprovincial cap and trade system for the trading of emissions credits, which could be implemented as early as 2010.

The accord explicitly rejects the use of the intensity-based targets (i.e., per unit of production) such as those used in the federal government's green plan called Turning the Corner. Instead, like the Kyoto Protocol, the system proposed by the two Premiers would set caps based on absolute greenhouse gas reductions using a 1990 baseline.  The federal framework uses 2006 as its baseline year and, as noted, rejects hard caps on emissions in favour of intensity-based reduction targets.

The accord invites other provinces and territories to sign on and "work together collaboratively on the cap and trade initiative". Further, the Ontario and Quebec Premiers have stated that they hope their system, once implemented, could become the foundation for a national cap and trade system. However, news of the Premiers' plans drew immediate criticism from federal Environment Minister John Baird, as well as Prime Minister Stephen Harper, who accused the Premiers of "political posturing" and suggested that the federal plan would be more aggressive and get underway sooner.

In addition, the accord contemplates forming linkages with other North American and international trading schemes, as well as working with "broader regional trading initiatives already under development". This could presumably include linking with the cap and trade scheme currently under development by the Western Climate Initiative (WCI), an alliance of seven American states and three Canadian provinces (Quebec, Manitoba, and British Columbia) that is jointly developing regional strategies to address climate change. Ontario has observer status with the WCI.
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