Page 5 - NorthAm Week 25 2021

NorthAmOil COMMENTARY NorthAmOil

will delay a rise in upstream spending in the oil Efforts to address this are picking up pace,
sands, factored into the reduction in the IHS with Canada’s nationwide emissions reduction
Markit long-term growth expectation.” target of net zero by 2050 adding to the pres-
Indeed, the consultancy envisions more than sure. In late May, oil sands producer Suncor
80% of the growth in its outlook coming from Energy set its own net-zero target for 2050.
the ramp-up, optimisation and completion of This was followed by the formation of an alli-
projects where some capital has already been ance in early June among the five leading oil
invested. It said that nearly two-thirds was sands producers – including Suncor – aimed
expected to come from the ramp-up of existing at achieving net-zero emissions from the oil
operations. sands by 2050. Despite ongoing
This task is considerable, however. Reuters
What next? reported this week that the three main hopes decarbonisation
Another major disincentive for making new for the region are carbon capture and stor- efforts, the oil
investments in the oil sands is the ever-accel- age (CCS), steam-reduction technology and
erating push to embrace the energy transition. the deployment of renewables to power the sands continue
A number of international majors has already oil sands. But – especially in the case of CCS
exited the oil sands over the past few years, which – there will be considerable costs involved. to grapple with
has been attributed both to the region’s econom- Producers are pushing for federal financial
ics and a desire to appear more environmentally support to help CCS take off in the region, and public image
friendly. And despite ongoing decarbonisation while Ottawa has unveiled a tax credit for the issues.
efforts, the oil sands continue to grapple with technology, to be launched in 2022, oil sands
public image issues. players have expressed dissatisfaction with its
Oil sands producers have already succeeded structure.
in reducing their emissions intensity per bar- The provincial government of Alberta, mean-
rel by 21% from 2009 to 2019, according to while, is calling on Ottawa to invest CAD30bn
IHS Markit, but absolute emissions have risen ($24bn) in CCS over the next decade. Any plans
alongside output. Another consultancy, Rystad for new CCS investments are likely to attract
Energy, estimates that the oil sands yield 3-5 criticism from those arguing that fossil fuels
times the global average of emissions per barrel should be abandoned altogether. But a full-scale
of oil equivalent (boe), because of the energy-in- exit from fossil fuels would be even more costly
tensive production processes involved. and complicated.™

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