Page 4 - NorthAmOil Week 42 2021

NorthAmOil COMMENTARY NorthAmOil

Canada’s oil industry under

new environmental pressure

Calls for Canada’s oil and gas industry to take a more aggressive approach

to decarbonisation are intensifying on several fronts

CANADA PRESSURE on Canada’s oil and gas industry
to take a more aggressive approach to decar-
WHAT: bonisation is intensifying. This can be seen on
Various organisations several fronts, both on a domestic and interna-
are stepping up pressure tional level. And the country’s leading oil sands
on Canada’s oil and producers this week provided more clarity on
gas companies to their plans for achieving net-zero greenhouse
decarbonise. gas (GHG) emissions by 2050.
This suggests that they are committed to their
WHY: new emissions goals – but their plans could still
Separate reports have fall short of what the international community
found that Canada and the Canadian government want to achieve.
needs to do more to hit As the long-term deadlines slowly move closer,
international climate the question of what can realistically be achieved
change targets, while will increasingly be in the spotlight.
projecting that the
country’s oil demand High costs
will fall. Estimates of the cost of decarbonisation are
beginning to emerge. The Royal Bank of Can-
WHAT NEXT: ada (RBC) said this week that transitioning the
Leading oil sands country’s economy to net-zero emissions over
producers have provided the next 30 years could cost about CAD2 trillion
more detail on their ($1.6 trillion). While this figure covers the entire
plans to reach net-zero economy, and not just oil and gas, it illustrates
emissions. the challenging and expensive path ahead.
However, RBC said that this level of invest- The oil sands is
ment into decarbonisation was realistic. Canada’s single
“In total, it seems like a daunting number, source of GHG emissions, at nearly 10% of largest source of GHG
but when you break it down, it’s manageable for the country’s total, as well as accounting for emissions according to
an economy like Canada,” John Stackhouse, an one-third of the Canadian oil industry’s 2019 RBC.
RBC senior vice-president in the office of the emissions.
CEO, and co-author of the report, was quoted “It’s the most important variable in our carbon
by the Financial Post as saying. “We’re looking at equation, and won’t be easy to balance,” RBC
CAD60-80bn [$49-65bn] per year; that’s much wrote. However, it praised the alliance formed
less than we spend on healthcare, for exam- recently by the country’s five leading oil sands
ple. It’s in line with what we aspire to spend on producers to pursue net-zero emissions through
childcare.” carbon capture and storage (CCS) and other
RBC’s report estimates that transportation technologies. This alliance would be “critical”
would account for the largest proportion of to Canada’s overall success in reaching net zero,
annual spending, with CAD25bn ($20bn) RBC said, but added that governments would
going towards building out electric vehicle need to match the commitment with additional
(EV) infrastructure. The oil and gas industry investments and favourable regulations.
would account for the second-largest amount The report was released on the same day that
of annual spending according to the bank, with the UN Environment Programme’s (UNEP)
CAD13.7bn ($11.1bn) per year required in annual production gap report found that Can-
terms of investment into emissions reductions. ada was lagging when it came to its decarbon-
The bank highlighted the oil sands in particu- isation goals. The “production gap” the study
lar, saying the region was Canada’s single largest refers to is the difference between planned

P4 www. NEWSBASE .com Week 42 21•October•2021