CFS in a nutshell:
The CFS aims to make all fuels cleaner, and includes policies such as adding ethanol to gasoline or requiring more renewable natural gas to be produced from landfills and food waste.CFS regulations for liquid fuels will come out next spring - just in time for the federal election. Solid fuel regs will come into effect in 2020.
While a carbon tax targets the person using the fuel, the CFS is aimed at companies supplying the fuel.
It's difficult to pinpoint what impact the CFS could have since the policy is still being developed, however it could raise gasoline prices by five cents per litre at the pump, according to an estimate by the Alberta government. Natural gas and other energy prices would rise as well.In reality there is no CFS policy as such, at least not yet. It's still being formulated which means it has about the same chance of a stillbirth as electoral reform, especially if Alberta has anything to say about it.
The Alberta government says the CFS could undermine all the work the province has taken to tackle climate change since it could add significant costs for low-income families and trade-exposed industries without any provisions to cushion the blow.
This feels like they are writing off Alberta and we can't have that happen. We're prepared to continue swinging on this one and stand up for what's important in Alberta," said Marg McCuaig-Boyd, Alberta's energy minister.
The CFS will have an impact on all provinces, but especially Alberta.Alberta complains CFS will mean bigger bills for consumers, as much as five cents per litre at the pump for gasoline.
A large oil company would likely see costs rise across the board at every facility it owns. For instance, an oilsands plant would pay more for using natural gas to process its bitumen, a refinery would pay more for natural gas used to separate oil into different fuels and petroleum products, and a company would likely have to buy ethanol to mix with gasoline before it can be sold at the pumps. Across the board, expenses could increase in the oilpatch.
The Alberta government is also watching smaller details of the CFS such as how coal-fired power plants will be impacted. The federal government was considering excluding those power plants from the CFS since those facilities are already being phased out by 2030 under a separate policy. However, the Alberta government is concerned the CFS could be a perverse disincentive for companies to switch from coal to natural gas in power plants, since natural gas would be impacted by the CFS.This sounds ambitious - CFS atop carbon pricing. Unfortunately this prime minister doesn't do 'tough' well and he would have to be tough enough to tame the western producing provinces and the eastern consuming provinces and a disgruntled public - all in an election year.
Any bets? Place your bets. We're giving odds. The fact that next to no effort is being made by the government to inform the public of CFS (or carbon pricing for that matter) to build popular support for the initiative speaks volumes. Without some degree of public acceptance, CFS is just another tax on the working man's pay packet, another cash grab. That's how Trudeau's opponents will sell it and this may go the way of Dion's doomed-from-the-outset, Green Shift programme.
Oh yeah. CFS also won't affect bitumen sales on world markets or the Justin Trudeau Memorial TransMountain Pipeline. Trudeau is concerned about Canadian fossil fuel emissions, not the emissions from Canadian bitumen burned abroad. Sure it all goes up into the same atmosphere but somehow it's not the same, sort of.