A new report by TD Bank shows the province’s Carbon Tax Plan will have little effect on new oilsands developments.
Starting January 1st, a carbon levy will be applied to fuels at a rate of $20 a tonne and increasing $10 the following year.
Economist Dina Ignjatovic tells Mix News the price of oil and market access will remain the key drivers behind new developments in the oilsands over the medium-to-longer term.
“These things have been an issue for a while for the oilsands, at least the market access side. Until we find ways to get oil out of there, that’s probably going to be a key driver going forward.”
She adds the carbon tax price won’t effect oilsands plans in our region if the price of oil is over $60 a barrel.
“Above that though, you see margins starting to widen again. The amount of the tax probably wouldn’t be enough to throw a deal off the table that would otherwise go ahead. Below $60 you probably won’t see a whole lot of investment anyway.”
Ignjatovic says the bottom line is that the oilsands need to reduce their carbon footprint and Alberta’s climate change plan is a step in the right direction.