March 10 (Bloomberg) -- Canadian oil-sands projects that start operating in 2012 or later will have to capture and store carbon emissions, according to new environmental rules that also largely ban new ``dirty'' coal-fired power plants.

The regulations will be finalized next year and come into force at the start of 2010, Environment Minister John Baird said today in a statement from Ottawa. Today's move expands on a pledge last year to reduce emissions 20 percent by 2020.

``The oil sands is an important natural resource and we've got to expand it in an environmentally friendly way,'' Baird, 38, told reporters in Ottawa. Canada is the No. 1 supplier of crude oil and natural gas to the U.S.

The process of extracting oil from tar deposits in the western province of Alberta is one of Canada's biggest sources of greenhouse-gas emissions, which may more than double by 2015 as production rises, a United Nations report said last year. Because energy companies are just now starting to develop the technology to store carbon underground, the rules may deter investment in the tar sands, an energy executive said.

``We have to figure out how to do it and what it costs,'' Charlie Fischer, chief executive officer of oil and natural-gas producer Nexen Inc., said today in Edmonton, Alberta, before the announcement. ``If you don't know what it costs and how you're going to do it, that could just stall the investments.''

Enbridge Inc.

Enbridge Inc., Canada's largest pipeline company, said in February it will lead a group of 19 energy firms in a project to limit pollution by developing ways to store carbon dioxide. The project is studying if it can inject and store carbon underground, perhaps in salt-filled reservoirs buried at least 8,000 feet (2,438 meters) down.

Stephen Hazell, executive director of the Sierra Club of Canada, said today before the announcement that carbon capture rules might slow new investment in the tar sands and even halt the growth of emissions within five years.

``There will have to be a timeout or moratorium on new tar sands projects until the new technology is brought on stream,'' Hazell said.

Ed Stelmach, premier of Alberta, said the new federal rules shouldn't override his power to regulate natural resources in the province.

``The resources are owned by all Albertans,'' Stelmach told reporters today in Edmonton, the provincial capital. ``I will be constantly reminding'' Prime Minister Stephen Harper of this, he said.

Today all three opposition parties, which together hold a majority of seats in the legislature, said the plan isn't tough enough on big polluters. They also criticized Harper's Conservative Party government last year when it announced its initial climate-change plans.

Under the new rules, ``dirty'' coal plants can only be built after 2012 if they adopt new technologies such as carbon capture, the government said, without defining what dirty meant.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net.

Last Updated: March 10, 2008 16:48 EDT