Canadian Association of Petroleum Producers

Canadian Association of Petroleum Producers

Type	Advocacy group
Industry	Petroleum Industry
Founded	1992
Headquarters	Calgary, Alberta, Canada
Website	www.capp.ca

The Canadian Association of Petroleum Producers (CAPP), with its head office in Calgary, Alberta, is an influential lobby group that represents the upstream Canadian oil and natural gas industry.^[1] CAPP's members produce "90% of Canada’s natural gas and crude oil"^[2] and "are an important part of a national industry with revenues of about $100 billion-a-year (CAPP 2011)."^[2]

History

CAPP origins can be traced back to the Alberta Oil Operators’ Association, which was founded in 1927, after the discovery of the Turner Valley Oil Field. In 1947, the Alberta Petroleum Association changed its name to the Western Canadian Petroleum Association, and In 1952, the Western Canada Petroleum Association amalgamated with the Saskatchewan Operators’ Association and adopted the name Canadian Petroleum Association.

At a meeting on December 9, 1952, the CPA drafted a new constitution which outlined the objectives of the organization as follows:

• to establish better understanding between the petroleum and natural gas industry and the public
• to encourage cooperation between the petroleum and natural gas industry and federal, provincial and local governments, and other authoritative bodies
• to provide a forum for the discussion of matters affecting the welfare of its members
• to foster better understanding between the Association and purposes

On June 10, 1958 the CPA opened an office in Ottawa and became "one (of) the oldest, largest and most influential lobby groups in Canada."^[3] It provided the federal government with information pertaining to the oil industry while keeping the CPA informed about political trends, government regulations and statistics. By 1965 the CPA had a membership of more than 200 members representing roughly 97 percent of all oil and gas production in Canada. In 1981, two years after the first commercial discovery at Hibernia off the coast of Newfoundland, the CPA opened an office in St. John’s in cooperation with the Eastcoast Petroleum Operators’ Association.

In 1992, when the Canadian Association of Petroleum Producers (CAPP) was formed, with the CPA amalgamation with the Independent Petroleum Association of Canada (IPAC) to form the Canadian Association of Petroleum Producers (CAPP),^[3] Gerry Protti was named as founding president.^{[4][notes 1]}

CAPP Hall of Fame

• Michael (Jeffery) A. Jackson (1914–1972), founding director of the Independent Petroleum Association of Canada, lobbied for the western Canadian oil industry and pushed for pipelines to Central Canada.^[5]

Advocacy for oil industry

Canada's estimated total oil reserves including conventional oil were approximately 180 billion barrels (29 km³), behind only Saudi Arabia and Venezuela. Canada produces approximately 2.7 million barrels (430,000 m³) of crude oil a day, and 6.4 trillion cubic feet (180 km³) of natural gas per year. In 2013, an IPSOS poll showed a majority (75%) of Canadians prioritize local crude before using imported oil from foreign sources, while just over one in ten (14%) ‘disagree’ (4% strongly/11% somewhat) and 11% have no opinion.^[6]

CAPP has advocated for the industry as GHG emissions rose 14% in 2009 and 2010, by its own admission. . However, GHG emissions per barrel of oil sands crude produced have dropped by 26% since 1990 as a result of new operating practices and technology.

According to IHS CERA, oil sands crude has similar CO2 emissions to other heavy oils and is 9% more intensive than the U.S. crude supply average on a wells-to-wheels basis.^[7]

The industry employs 550,000 people and paid billions in taxes and royalties to different levels of government.

Advocacy for Oil Sands CAPP's series of meetings in 2010 in eight cities in Canada and the United States, including Vancouver, Edmonton, Ottawa, Toronto, Montreal, Washington D.C., New York and Chicago, with CAPP representatives, oil sands CEOs and 160 key stakeholders, culminated in a report entitled Dialogues published on 14 April 2011.^[2]

Advocacy for fracking

CAPP advocates for the use the controversial technology hydraulic fracturing. In 2010 released a series of voluntary Guiding Principles for Hydraulic Fracturing for Canadian natural gas producers to adhere to. The Guiding Principles of Hydraulic Fracturing were followed in 2011 by an agreed set of Six Hydraulic Fracturing Practices for: 1. Fracturing fluid additive disclosure 2. Fracturing fluid additive risk management 3. Baseline groundwater testing 4. Wellbore construction 5. Water sourcing and reuse 6. Fluid handling, transport, disposal

^[8]

Criticisms and concerns

The Council of Canadians and Sierra Club Canada take a strong position against hydraulic fracturing^[9] and want it banned in Canada entirely, and have supported specific bans in Nova Scotia ^[10] and New Brunswick.

Advocacy for Crude Oil Exports via Canada's West Coast

CAPP supports and advocates for exports of Canadian crude oil via Canada's west coast via the Northern Gateway and the KinderMorgan TransMountain Expansion Project. In September 2011, the Asia Pacific Foundation of Canada (APF Canada) and the Canada West Foundation established the Canada-Asia Energy Futures Task Force with Kathleen (Kathy) E. Sendall, C.M., FCAE,^{[notes 2]} a former Governor and Board Chair of the Canadian Association of Petroleum Producers (CAPP) and Kevin G. Lynch, a Canadian economist and former Clerk of the Privy Council and Secretary to the Cabinet, Canada's most senior civil servant as co-chairs, to investigate a long-term Canada-Asia energy relationship. One of their recommendations was the creation of a public energy transportation corridor.^[11]

Criticisms and concerns

Canadian opponents to the Northern Gateway , intended to permit shipping of high-carbon Canadian crude over ecologically sensitive rivers and waters to carbon-uncontrolled countries including India and China, include 61 First Nations in British Columbia.

Advocacy for Keystone XL Pipelines expansion

CAPP supports and advocates for the $7-billion pipeline expansion project by the Canadian-based company TransCanada to build the Keystone XL, that would extend and expand capacity of existing pipelines, that transport crude oil from the Athabasca oil sands in northern Alberta to tidewater and to refineries in the Gulf, capable of refining the heavy bitumen crude oil.

Criticisms and concerns

Nine winners of the Nobel Peace Prize, including Archbishop Desmond Tutu and the Dalai Lama, were signatories to a letter to pressure U.S. President Barack Obama to reject the $7-billion pipeline expansion project by the Canadian-based company TransCanada to build the Keystone XL.

The position of the Nobel Peace Prize winners, essentially, is that one rich nation selling increasingly heavy high-carbon oil to another sabotages any effort to reach a deal on global carbon controls, and that moves to expand this export (like Keystone XL or Northern Gateway) cause significant and direct risks to world peace, as climate victim countries become subject to chaotic weather, fighting over scarce water (especially in Southeast Asia and Africa), flooding and rising sea levels.

Advocacy regarding GHG emissions

CAPP opposed the Kyoto Protocol, from which Stephen Harper withdrew Canada in December 2011. CAPP's lobbying efforts included favouring "made in Canada" approach and advocating for a carbon-pricing program. In 2007 a carbon tax was implemented in Alberta, Canada's major oil and gas producing province. Supported by CAPP and in the industry, the $15/tonne carbon tax feeds a GHG emissions reduction technology fund.

By 2008, the oil sands industry contributes (approximately 3%–4%) of Canada’s GHG emissions (approximately 3%–4%. By 2012, oil sands contributed 0.14% of global GHG emissions. Transportation and electricity were the largest contributors of GHG, with transportation contributing 190 Mt of CO2 equivalent per year (MtCO2eq yr−1) and electricity and heat generation: 125 MtCO2eq yr−1. However by 2007 (Environment Canada 2007) cautioned that unrestricted development of the oil sands could increase its emissions and the percentage. A 2008 CAPP report argued that both the Alberta and Federal governments adopted "comparable industry GHG emissions targets in which large emitters must reduce their emissions by either improving their operation, purchasing emissions credits or investing in technology funds."^[1][12]

Criticisms and concerns

Canada was the first signatory nation to walk away from the Kyoto Protocol in 2012. The U.S. abandoned the Kyoto Protocol in 2001.^[13]

CAPP initiative 2011: Oil and gas, industry, provincial regulators collaborate on strategies to shape public perception of fracking, water use and shale gas development

In the summer of 2011 CAPP contacted ENV to requested a meeting with the Canadian Society for Unconventional Gas (CSUG), and officials from several government ministries, including Alberta Environment, Energy, Sustainable Resource Development (SRD), as well as the Energy Resources Conservation Board (ERCB), (now Alberta Energy Regulator) to discuss CAPP’s desire to strike a committee to develop a public communications strategy focused on fracturing and water use associated with shale gas development."^[14] Senior-level government and industry officials attended the joint meeting "to develop a plan to shape public perceptions of shale gas development and water use." From Alberta Energy participants included Director of Unconventional Gas Doug Bowes, Associate Branch Head Matthew Foss, Environment and Resource Services Audrey Murray, Executive Director of Resource Development Sharla Rauschning, Assistant Deputy Minister Resource Development Policy Division Jennifer Steber. From Alberta Environment participants included, Deputy Minister Ernie Hui, Former Head of Groundwater Policy within the Water Policy Branch, now the Exec. Dir. of OH&S Policy and Program with Human Services Ross Nairne. From Sustainable Resource Development (SRD) participants included Assistant Deputy Minister Glen Selland, Executive Director, Land Management Branch Jeff Reynolds, Officials from CAPP included VP Operations David Pryce, Manager of BC Operations Brad Herald, Manager of Water and Reclamation Tara Payment. From the Canadian Society for Unconventional Gas (CSUG) CSUG (a.k.a. CSUR) participants included Vice President Kevin Heffernan.

June 8, 2011, e-mail to senior government officials from the Energy Resources Conservation Board, the arm’s length regulator of the oil and gas industry in Alberta, to several meetings to produce a collaborative communications campaign on fracking strategy. On 9 June 2011 the Alberta government approved collaborative communications campaign in the minutes of their joint meeting.^[15] stating that

Criticisms and concerns

By 29 November 2011, the CBC and the Alberta Federation of Labour (AFL), were investigating the role played by CAPP in influencing Alberta Environment over public communications surrounding shale gas extraction, a controversial practice that has significant environmental concerns associated with it, especially when fracturing is employed. Questions were raised about the legality of private interests influencing government. Complaints were filed and dismissed.^[16]

Selected CAPP publications

• ^[12]
• CAPP Report: Gas Use by the Canadian Oil Sands Industry (Report). Natural Gas. Canadian Association of Petroleum Producers (CAPP). December 2007.  p. 22.
• CAPP 2008 Facing our Challenges-2007 Stewardship Report (Report). Canadian Association of Petroleum Producers. 2008. 
• Overview: Water Use in Canada’s Oil Sands (Report). Canadian Association of Petroleum Producers (CAPP). September 2010. p. 1.
• GHG 101 (Report). Canadian Association of Petroleum Producers (CAPP). 2009. 
• Crude Oil Forecast, Markets & Pipeline Expansions 101 (Report). Canadian Association of Petroleum Producers (CAPP). June 2010. p. 30
• Overview: Greenhouse Gas Emission in Canada’s Oil Sands (Report). Canadian Association of Petroleum Producers (CAPP). August 2010. p. 1
• Report of the Dialogues on the Oil Sands: Engaging Canadians and Americans (Report). Calgary, Alberta: Canadian Association of Petroleum Producers (CAPP). 14 April 2011.  Full text on-line report

See also

• American Petroleum Institute (API)

Notes

References

Further reading

Additional information about the lobbying controversy can be found here: http://www.cbc.ca/news/canada/edmonton/story/2011/11/29/edmonton-lobbying-compalint-dismissed.html''

• Mech, Michelle (May 2011). A Comprehensive Guide to the Alberta Oil Sands: Understanding the Environmental and Human Impacts, Export Implications, and Political, Economic, and Industry Implications, and Political, Economic, and Industry Influences (PDF) (Report). Green Party. 

External links

• CAPP web site