Alberta Premier-Candidate Prentice Wouldn’t Boost Carbon Price

May 23, 2014 2:16 pm ET

May 23 (Bloomberg) -- Alberta shouldn’t increase its carbon levy for large emitters until the U.S. moves with its own regulations, said Jim Prentice, a former Canadian environment minister who’s running to lead the province.

Alberta and Canada need to work with the U.S. to develop continental rules for greenhouse-gas emissions, said Prentice, who’s on leave as vice-chairman at Canadian Imperial Bank of Commerce as he seeks the leadership of the Alberta Conservative Party and the province. Alberta also needs to be an “environmental leader” to be able to sell its energy resources in other markets, he said.

Even though Alberta’s emissions policy has been in place since 2007, Prentice said officials in the U.S., including former Energy Secretary Steven Chu, haven’t always known that Alberta has a price on carbon emissions, so tightening existing provincial regulations doesn’t make sense.

“Why would we double-down on that when the energy secretary wasn’t even aware of what we’re doing?” Prentice said. “We cannot damage our competitiveness until the Americans do the same thing.”

Alberta requires companies that emit more than 100,000 metric tons of greenhouse gases a year to cut emissions per barrel by 12 percent or pay a penalty of C$15 ($13.80) per ton.

The province has until September to renew emissions regulations and is considering different scenarios, Interim Premier Dave Hancock has said. The province has considered different scenarios to manage emissions, including one that would raise its carbon tax for large emitters to C$40 a metric ton, former premier Alison Redford said in a February interview.

Resisting Pressure

Prime Minister Stephen Harper has resisted pressure to introduce federal rules to reduce greenhouse gas emissions by the nation’s oil and gas sector. Harper said in a Bloomberg News interview in January his government would prefer to develop a North American regulatory regime with the U.S.

Emissions from Alberta’s oil sands have become a focal point for those opposed to Calgary-based TransCanada Corp.’s Keystone XL pipeline, which would carry bitumen from the oil sands to Gulf Coast refineries. Opponents like billionaire Tom Steyer say the line would encourage companies to exploit the world’s third-largest crude reserves, unlocking vast amounts of carbon and accelerating climate change.