UPDATE 1-Alberta mulls tougher carbon rules on oil -report

Thu Apr 4, 2013 2:22pm EDT
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* Report says levy could rise to C$40/tonne from C$15

* Minister looking a range of options to meet targets

* Analyst calls amount "not inconsequential"

By Jeffrey Jones

CALGARY, Alberta, April 4 (Reuters) - Alberta is considering a major increase in the carbon levy it charges oil producers as it seeks to show Washington that it is serious about meeting emission-reduction goals, while promoting the contentious Keystone XL pipeline to Texas refineries.

Alberta Environment Minister Diana McQueen offered the levy proposal at a meeting in Calgary last week with oil executives and federal Environment Minister Peter Kent, the Globe and Mail newspaper said on Thursday.

Such a move would be in line with comments that the Canadian province's envoy to Washington made in a February interview with Reuters. David Manning said Alberta may adopt more stringent environmental policies to help producers in the oil sands increase access to lucrative markets such as the U.S. Gulf Coast.

In the subsequent weeks, the government brushed aside media queries about what new moves were under consideration.

Wayne Wood, McQueen's spokesman, did not dispute that the minister had floated the idea of a higher carbon levy, but would not comment on the details and said no decision had been made.   Continued...