Alberta delays new carbon rules for second time

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Alberta Premier Jim Prentice has pushed back a deadline for overhauling rules aimed at cutting greenhouse gas emissions, saying more work needs to be done to meet his goals of balancing environmental performance and energy-sector competitiveness.

Mr. Prentice said the existing regulations, which feature a levy of $15-per-tonne for carbon emissions from major industries, will remain in force through June. It marks the second extension for the so-called Specified Gas Emitters Regulation, which was initially set for renewal in September.

The move comes as Alberta aims for U.S. government approval of TransCanada Corp.'s contentious Keystone XL oil pipeline. President Barack Obama has said the project will be judged on whether it will contribute to "carbon pollution." Meanwhile, the dramatic drop in oil prices has left energy companies with less money to invest in environmental technology.

"I can tell you there is a lot of hard work going on. The policy isn't yet to the condition that I want to have it, and so we'll continue to work on it over the holiday season," Mr. Prentice told reporters on Friday.

Alberta has often touted its carbon policy as pioneering as it lobbies the U.S. administration and congress on the benefits of Keystone XL. Critics have said that the price per tonne is too low and number of emitting facilities that it covers does not go far enough to force reductions as the oil sands sector expands.

Under the seven-year-old policy, companies that exceed set thresholds can opt to pay into a technology fund to avoid penalties, or else purchase offsets.

This week, Prime Minister Stephen Harper said in an interview with CBC that Alberta's model of carbon pricing could be implemented on a "broader" scale.

He made the comments after telling Parliament it would be "crazy" to impose tough new carbon regulations on the energy sector as crude prices skid. The federal government has for years delayed long-promised federal rules for oil and gas.

Mr. Prentice said other jurisdictions are modelling their carbon policies on Alberta, including British Columbia, with its nascent liquefied natural gas industry. He suggested that Alberta will be looking to other parts of the country to join its efforts.

"We're proud of what we're doing. We'll continue to improve on it. We need more partners. We need to be in the front of environmental discussions and we tend to do that," he said during a joint media conference with Canada's Ambassador to the United States, Gary Doer.

One long-time critic of Alberta's greenhouse gas policies, the Pembina Institute, said it is better to formulate an effective carbon policy than to push something through by year-end.

"At least now we have a clear timeline and we've got a premier who's talking about getting it right and not rushing it," said Ed Whittingham, the environmental think-tank's executive director.

"By the same token the premier really has to stick to this timeline because the overhaul has already been pushed once."

Mr. Doer pointed out the U.S. State Department's final environmental impact statement for Keystone XL concluded that the project itself should not increase Canadian oil sands production, and by extension, emissions.

President Obama reiterated on Friday that the pipeline would be good for the Canadian oil industry but have little impact in reducing gasoline prices for U.S. motorists.

"It's not even going to be a nominal benefit to U.S. consumers," he told a White House Press conference.

With files from Paul Koring in Washington and Jeff Lewis in Calgary.