Canada: Alberta Government Introduces Legislation Mandating Cap On Greenhouse Gas Emissions From The Alberta Oil Sands

As part of Alberta's Climate Leadership Plan launched in November 2015, the Government of Alberta introduced on November 1, 2016, Bill 25 - the Oil Sands Emissions Management Act ("Bill 25"). Bill 25 had its first reading on November 1, 2016 and is currently undergoing second reading. It sets out the proposed cap on greenhouse gas emissions in the oil sands sector.


Oil sands facilities are currently regulated under the Specified Gas Emitter Regulation (SGER). The SGER framework operates based on each individual facility's historical emissions per tonnes of greenhouse gas ("GHGs") per barrel produced or the operation's efficiency. Oil sands operations currently emit roughly 70 Megatonnes (Mt) per year. As BLG previously discussed (in  Alberta Premier Notley Tips her Climate Change Hand and All Change — Alberta Overhauls Climate Policy, Ushers In Sweeping New Requirements), the Alberta government introduced a comprehensive strategy on climate change in November of 2015. The plan includes a $30/tonne carbon price to be applied to oil sands facilities based on results already achieved by high performing facilities and legislated emissions limit on the oil sands of a maximum of 100 Mt in any year with provisions for cogeneration and new upgrading capacity.


The Alberta Government on November 1, 2016, introduced Bill 25, legislation which established an annual 100 Mt emissions limit on oil sands. The Government stated that as a cornerstone of Alberta's Climate Leadership Plan, the cap will allow the oil sands industry to grow sustainably by driving technological progress while ensuring that Alberta's operators have the necessary time to develop and implement new technology that takes more carbon emissions out of every barrel.

Overview of Bill 25

Bill 25 has a preamble setting out the objectives and four sections. Section 1 is the definition section. Subsection 2(1) sets the greenhouse gas emissions limit for all oil sands sites combined in any year as 100 Mt. "Oil sands sites" is broadly defined to include all the buildings, equipment, structures, machinery and vehicles that are integral to the operation of an oil sands site. Subsection 2(2) sets out the oil sands projects exempted from the 100 Mt as follows:

  1. the electric energy portion of the total energy generated or produced by cogeneration;
  2. upgraders that complete their first year of commercial operation after December 31, 2015, or the increased capacity resulting from an expansion after December 31, 2015 of upgraders that completed their first year of commercial operation on or before December 31, 2015, to a combined maximum of 10 Mt in any year;
  3. any prescribed experimental scheme or any experimental scheme within a prescribed class of experimental scheme;
  4. any prescribed primary production or any primary production within a prescribed class of primary production; and
  5. prescribed enhanced recovery or any enhanced recovery within a prescribed class of enhanced recovery.

Section 3 provides the authority of the Lieutenant Governor in Council to make regulations in respect of specific aspects of the Bill, including among others:

  • prescribing specified gases as gases to which this Act applies;
  • defining "enhanced recovery", "experimental scheme", "primary production" and "synthetic crude oil;"
  • the administration of upgrading emissions excluded; and
  • establishing and governing mechanisms to keep greenhouse gas emissions from oil sands sites within the limit established, including prescribing thresholds, including limits, triggers, ranges, measures or indices, establishing a system of greenhouse gas emission allowances and governing the purchase, auction, trading or retirement of greenhouse gas emission allowances or any other matter related to a system of greenhouse gas emission allowances.

Bill 25 will not repeal the Climate Change and Emissions Management Act, SA 2003, c C-16.7. Section 4 of Bill 25 specifically provides that this Act shall be construed as forming part of the Climate Change and Emissions Management Act, and the Climate Change and Emissions Management Act shall be construed accordingly.


Bill 25 is brief and lacks details. There are no monitoring, enforcement or penalty provisions. Arguably, as part of the Climate Change and Emissions Management Act, the provisions of that existing Act will be applicable. Further, given the broad powers of the Lieutenant Governor in Council to make regulations in respect of this Act under the Climate Change and Emissions Management Act, a great deal of detail will be filled through regulations.

The actual implementation of the cap is another challenge. The application of the exemptions are lacking in scope. Bill 25 does not distinguish between mineable oil sands sites and in situ sites. The Oil Sands Advisory Group is working to provide advice to the Government on the implementation of the 100 Mt. The Alberta Government also states that it will begin immediately to seek the advice of the industry, regulators, environmental organizations and Indigenous and Métis communities on the implementation of the 100 Mt limit.

It is also not clear how the 100 Mt was arrived at. The Alberta Government states that the annual emissions limit was established by a diverse group of stakeholders and jointly recommended by Canadian and international leaders in Alberta's oil sand industry and international environmental organizations. There seems to be no published information on how the limit was determined. Further, it is not clear how the 70 Mt per year attributable to the oil sands was measured and aggregated.

Bill 25 does not state that it binds other decision-makers and regulators or that it amends other relevant legislation in Alberta. The Alberta Energy Regulator (AER) has jurisdiction over oil sands schemes and has approved a large number of projects. Bill 25 does not provide any guidance as to whether the emissions of existing projects are grandfathered within the 70 Mt per year currently recorded for the oil sands, and if so, how it will be allocated among existing oil sands sites. It is questionable whether there may be a need to segregate between mines and in situ sites for the purposes of the allocation. Without established criteria, such allocation will likely be contentious. While Bill 25 does not expressly provide so, it is implied that such allocations may be tradeable given the regulations contemplated to govern the purchase, auction, trading or retirement of greenhouse gas emission allowances.

Further, if indeed the 70 Mt per year will be grandfathered, it is not clear how the remaining 30 Mt will be allocated to new oil sands projects. Will the AER freeze approvals when the 100 Mt cap is reached? Skeptics may infer that Bill 25 may be an implied way to limit the number of oil sands projects operating in Alberta until its gradual phase out as in the case of coal. Approved projects that received no allocation, if they are not allowed to operate, may argue that their mineral rights have been effectively expropriated de facto. The success of such argument is uncertain given the various alternatives for compliance to be provided in the regulations such as purchase, auction and trading.

Lastly, it is not clear how Bill 25 fits into the Federal Government's climate initiatives announced in October of this year. BLG will continue to monitor Bill 25 as it progresses through the Alberta Legislature and provide updates.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.