Good morning.
There’s a televsion ad in regular rotation from Pathways Alliance, the coalition of six Canadian oilsands majors — Canadian Natural Resources Ltd., Cenovus Energy Inc., ConocoPhillips Canada, Imperial Oil Ltd., Meg Energy Corp. and Suncor Energy Inc. — formed to manage the black mark some have attached to the sector’s carbon emissions.
“If you have questions about where Canada’s oilsands industry stands on climate change, you’re not alone,” the ad says. “It’s time to clear the air. Oilsands contributes significant carbon emissions in Canada …”
It sounds like these companies, which represent about 95 per cent of oilsands production in Canada, are taking responsibility for their industry’s share of greenhouse gasses and their role in climate change. Some will say it’s about time, while others might say it’s too little, too late. Then there are those who will say they have nothing to admit to. The Ministry of Environment and Climate Change Canada has no doubts about the energy sector’s role, having already labelled it the largest contributor of carbon dioxide (CO2) in its environmental roadmap, 2030 Emissions Reduction Plan, released in early 2022.
The federal government has called on the sector to reduce those emissions by 42 per cent from 2019 levels by 2030, a target many energy industry players have called unrealistic. But Ottawa and Pathways Alliance do seem to agree on the role of carbon capture, which the Pathways advertisement describes as a “key step in helping Canada meet its net zero climate goal” that will reduce “emissions by millions of tonnes annually.”
Carbon capture and sequestration (CCS) isn’t cheap. Pathways Alliance has proposed a $16.5-billion carbon capture and storage hub and pipeline for northern Alberta that would initially collect captured CO2 from oilsands facilities in the Fort McMurray, Christina Lake and Cold Lake regions. An evaluation of the project is underway, but funding continues to be a sticking point.
The energy industry told Ottawa prior to last spring’s federal budget that it would need financial inducements to spend on CCS. Those were forthcoming though they were not as rich as some had hoped for. Then came Joe Biden’s Inflation Reduction Act that offered a bonanza of federal tax incentives for carbon-capture projects, such as increasing tax credit amounts and relaxing the requirements to qualify for the credit. Finance Minister Chrystia Freeland in a speech in November in Calgary said more energy transition incentives are coming in next year’s federal budget.
But does the energy sector in Canada really need more from government to get its sequestration plans truly underway? Plenty of public incentives are already available for Pathways Alliance to get the carbon-capture show on the road, according to the Pembina Institute, a clean energy think-tank.
Then, there’s the elephant in the room that is the global energy sector’s “stunning” profit windfall. Pathways Alliance members CNRL, Imperial Oil and Cenovus recently appeared in a Reuters piece about share buybacks and dividend hikes by the largest companies by market capitalization. CNRL reported a 30 per cent increase in profit in its last quarter, Cenovus’ earnings were up 192 per cent and Imperial’s rose 124 per cent.
Pathways’ Alliance is presumably running its ad because it wants the public to think it’s serious about climate change and greening its industry. Maybe it’s time to move beyond creating an impression and give the Canadian public a reason to believe.
— Gigi Suhanic
