Canadian Association of Petroleum Producers


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

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:
On June 10, 1958 the CPA opened an office in Ottawa and became "one the oldest, largest and most influential lobby groups in Canada." 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 was formed, with the CPA amalgamation with the Independent Petroleum Association of Canada to form the Canadian Association of Petroleum Producers, Gerry Protti was named as founding president.
According to the Federal lobbyist registry, from January to September 2012, the Canadian Association of Petroleum Producers had 178 contacts with federal officials to discuss issues such as pipelines, making it the lobby group with the most contacts that year. They lobbied on greenhouse gas regulations related to the Clean Air Act, Fisheries Act, pipeline regulation and tax credits.

Advocacy for oil industry

Canada's estimated total oil reserves including conventional oil were approximately 180 billion barrels, behind only Saudi Arabia and Venezuela. Canada produces approximately 2.7 million barrels of crude oil a day, and 6.4 trillion cubic feet of natural gas per year. In 2013, an IPSOS poll showed a majority of Canadians prioritize local crude before using imported oil from foreign sources, while just over one in ten ‘disagree’ and 11% have no opinion.
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.
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.

Advocacy for fracking

CAPP advocates for the use of 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.

Criticisms and concerns

The Council of Canadians and Sierra Club Canada take a strong position against hydraulic fracturing and want it banned in Canada entirely, and have supported specific bans in Nova Scotia 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 and the Canada West Foundation established the Canada-Asia Energy Futures Task Force with Kathleen E. Sendall, C.M., FCAE, a former Governor and Board Chair of the Canadian Association of Petroleum Producers 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.

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 cause significant and direct risks to world peace, as climate victim countries become subject to chaotic weather, fighting over scarce water, 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 of Canada’s GHG emissions and electricity and heat generation: 125 MtCO2eq yr−1. However, by 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."

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.

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, and officials from several government ministries, including Alberta Environment, Energy, Sustainable Resource Development, as well as the Energy Resources Conservation Board, 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." 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 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 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. stating that

Criticisms and concerns

By 29 November 2011, the CBC and the Alberta Federation of Labour, 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.

2019 federal general election

Prior to the 2019 Canadian federal election CAPP registered as a political third party, which The Calgary Herald said was "breaking with tradition" "for the first time" to increase its advocacy efforts on behalf of the oil industry. As oil prices rose, the profits of the Alberta oil industry in 2019 experienced a $909 million profit compared to the $678 million loss in Q4 in 2018, according to Statistics Canada. By Q1 2019, operating profits of the oil industry increased by $1.6 billion. Alberta Premier Jason Kenney had said during his election campaign that he would request that the energy industry "significantly increase its advocacy efforts."

COVID-19 pandemic

The Canadian Petroleum Industry faces a major crisis during the COVID-19 pandemic, as canadian crude oil prices fell to records low. Facing dire economic prospects, CAPP intensified its lobbying efforts with the federal government. On March 27, the group sent a 13-page letter to Natural Resources minister Seamus O'Regan and other ministers to ask them to defer or waive some of the industry's regulatory obligation, to defer the development or implementation of new policies regarding the industry, and to implement policies to support the industry directly. Specifically, this meant that the Industry requests, among other things, to defer the reporting of its greenhouse gas emission, to defer the implementation of the new Mathane regulation and carbon pricing, and to delay the introduction of legislation that would entrench the Declaration on the Rights of Indigenous Peoples in canadian law.

Criticisms and concerns

National Chief Perry Bellegarde wrote a letter to CAPP President and CEO Tim McMillan telling him to back off from advocating for the indefinite delay of the implementation of UNDRIP in Canada. Macmillan responded by affirming CAPP's support of UNDRIP, but maintaining that such legislation shouldn't be adopted during the pandemic because of the government's limited ability to hold consultations during this time.

Selected CAPP publications