Page 5 - NorthAmOil Week 32 2021

NorthAmOil COMMENTARY NorthAmOil
CAD75bn ($60bn) to take the oil sands to net zero. Cenovus’ CEO, Alex Pourbaix, has called on the federal government to cover up to 70% of this.
“If we’re able to solve the puzzle of making Canadian oil significantly lower carbon inten- sive,” the oil would be the “cleanest in the world,” he told the Financial Times this week.
While the Canadian government has acknowledged how dependent the country’s economy is on oil production, it has not yet made any commitments to fund oil sands decarbonisation efforts. And any such com- mitments would likely prove controversial, given that environmental and other groups believe decarbonisation should be achieved by abandoning fossil fuels altogether. On the other hand, Canadian Prime Minister Justin Trudeau is under growing pressure to do more to pursue decarbonisation, after committing the country to a nationwide net zero target for 2050 last year.
What next?
Kenney is right, however, that fossil fuel pro- duction and use cannot be simply switched off, especially when it accounts for such a large pro- portion of the Canadian economy. And the fed- eral government has described CCS as “the only currently available technology with the potential to generate negative emissions”, and is funding research into it – though not directly through oil sands companies. More federal support could come over time.
In the meantime, the country’s oil industry is joining Kenney in trying to emphasise the ongo- ing need for fossil fuels while also highlighting
the decarbonisation efforts being made by Can- ada’s producers.
“We absolutely believe there is space in the global market for Canada’s oil and natural gas production,” the Canadian Association of Petro- leum Producers’ (CAPP) CEO, Tim McMillan, said in the wake of the IPCC report’s release.
This builds on previous comments by McMil- lan seeking to highlight the role Canada’s oil industry is playing in decarbonisation.
“The natural gas and oil industry provides about 75% of all funding in Canada’s growing clean technology sector, making us the larg- est investor in the clean tech space,” he said in April. “We are well-positioned to be a central pillar of the country’s economic recovery, and our work toward a cleaner-energy future can further differentiate Canadian oil and gas from our global competitors as demand rises in the years to come.”
Canadian producers are not the only ones seeking to highlight their green credentials. Trade groups in the US and elsewhere are also talking up the decarbonisation achievements they have already made, as well as ongoing efforts.
However, the more emphatic nature of the language used in the IPCC’s latest report com- pared with its predecessor has captured interna- tional attention, and will likely lead to stronger opposition to the ongoing use of fossil fuels. Thus, funding and sanctioning major CCS projects could become more challenging given public pressure on governments, including that of Canada.
The trouble is, there is currently no credible alternative.™
Alberta has been keen to position itself as being at the forefront of decarbonisation efforts.
Major oil sands producers have been adopting net zero emissions targets.
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