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Report: Alberta’s Carbon Tax Plan Will Have Little Effect On New Oilsands Development

Fort McMurray, AB, Canada / MIX 103.7
Report: Alberta's Carbon Tax Plan Will Have Little Effect On New Oilsands Development

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.

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