Page 9 - NorthAmOil Week 24

NorthAmOil COMMENTARY NorthAmOil

Pandemic undermines green

initiatives in oil sands

Leading Canadian oil sands companies have delayed around $1.3bn in

green initiatives as they seek to cut costs during the market downturn

ALBERTA THE oil market downturn – first caused by disa- While the Alberta government has main-
greement among the OPEC+ group of countries tained that the reduction of monitoring was
WHAT: and then severely exacerbated by the coronavirus designed for short-term relief and to address
Three leading oil sands (COVID-19) pandemic – has spurred producers public health concerns, the move has prompted
producers have shelved all over the world to cut budgets. However, as criticism at a time when other parts of the prov-
a combined $1.3bn worth well as resulting in reduced oil production, some ince’s economy are reopening.
of green projects. of these cuts are eating into green initiatives that This has added to concerns that once the pan-
are being adopted by oil and gas companies as demic has passed, it could be harder than ever
WHY: part of the energy transition. for the oil sands – and Alberta’s oil industry more
The companies are One of the segments where this is playing broadly – to turn their public image around.
seeking to cut costs out is in Canada’s oil sands. Reuters reported
in response to the this week that three of the country’s four big- Making cuts
unprecedented market gest oil sands producers had cut a combined According to Reuters, Suncor Energy has led in
downturn this year. CAD1.8bn ($1.32bn) of planned spending on making cuts to its green initiatives. The company
green initiatives. has shelved a CAD1.4bn ($1.0bn) cogeneration
WHAT NEXT: These cuts threaten to undermine efforts to plan and a CAD300mn ($211mn) wind power
The cuts could undermine cut greenhouse gas (GHG) emissions in the oil project as part of its spending cuts. Under the
efforts to reduce oil sands, and improve the negative public image cogeneration plan, Suncor would have replaced
sands emissions and that the region has struggled to shake off. coke-fired boilers at its oil sands base plant with
improve the public image And the moves come amid mounting criti- natural gas units, reducing GHG emissions and
of operators. cism of Alberta regulators for temporarily reduc- other pollutants.
ing environmental monitoring requirements on Reuters cited Suncor’s vice-president of sus-
concerns over the risks posed by COVID-19. tainability, Jon Mitchell, as saying that the delay
This week, the Alberta Society of Professional of these projects did not diminish their impor-
Biologists’ president, Jay White, said scaling tance, but that green investments hinged on the
back monitoring had been unnecessary, and that financial health of the company’s core business
most of the work could have been carried out – oil production.
safely. Meanwhile, Alberta’s Environment and News of the company’s cuts have come in the
Parks Chief Scientist, Fred Wrona, said he had same month that Suncor’s CEO, Mark Little, has
not been consulted on the move, and that it had said that the oil sands had the potential to lead
been decided internally by the Alberta Energy the energy transition by investing in and devel-
Regulator (AER). oping new clean technology. (See NorthAmOil

Week 24 18•June•2020 www. NEWSBASE .com P9