Oil CEO says too much government talking, not enough action, putting climate targets in jeopardy
Ottawa and Alberta disagree on what policies should be used to cut emissions
Derek Evans, the head of Calgary-based MEG Energy, told CBC Radio's The House the lack of concrete details on climate policies are interfering with the chronology for decarbonization.
"The whole 2030 timeline, what we said we thought we could do by 2030, that starts to get risked," he said, adding the dialogue has been productive but lacking action.
Ottawa is crafting policies that would put legislative pressure on the sector to decarbonize more quickly, including an impending emissions cap and killing "inefficient" fossil fuel subsidies. An announcement on the latter is expected next week, but specifics have been scarce for years.
Canada has committed to net-zero by 2050, with an interim goal that would require oil and gas to cut 42 per cent of its greenhouse gas emissions below 2019 levels by 2030.
Canada's
Minister of the Environment and Climate Change Steven Guilbeault
photographed speaking in Vancouver in 2022. Ottawa is crafting policies
that would put legislative pressure on the oil and gas sector to
decarbonize more quickly. (REUTERS/Jennifer Gauthier)
Both levels of government are feuding over 2030 targets, though they agree on the end date of 2050. Both are providing support to industry in the form of funding and tax credits, but disagree on the methods to reach a carbon-neutral economy.
"We are going to lose the next generation"
"We will lose not only the opportunity to decarbonize, we are going to lose the next generation in terms of their belief in are we actually doing what's right for the environment," Evans said.
His daughter often presses him about his work, he said, and whether oil companies are serious when it comes to climate change.
Industry titans, including MEG's partners in the Pathways Alliance that represents 95 per cent of oilsands production, have told the federal government getting to the 42-per-cent reduction goal is unrealistic by the end of the decade (In fact, they say it would take an extra five years to get there at the current pace).
The oilsands produce about 70 million tonnes of emissions annually, according to the Alberta government — about 11 per cent of Canada's total pollution output.
"At some point, if you are serious about decarbonizing the oilsands for a variety of reasons, we need to see some progress towards that," said Andrew Leach, a professor and energy and environment economist at the University of Alberta.
"But I think also … if the government is not going to recognize, for example, enhanced oil recovery as a means of carbon capture and sequestration, industry needs to know that before they can decide where to put their money."
Policies underway, but industry lacks details
The federal government has announced billions in clean energy incentives and tax credits for things like carbon capture and storage. That's what the industry wants clarity on. Alberta has also committed about $2 billion into carbon capture, utilization and storage (CCUS) and approved 25 proposals for carbon storage hubs.
CCUS technology traps and stores pollution from production underground. Despite political and industry buzz, it hasn't been proven at a massive scale yet and remains relatively expensive.
Canadian oil and gas companies are hoping to lead the world in its development, but that's becoming a steep task as U.S. measures like the Inflation Reduction Act provide historical investments for green tech.
Canada has been floating decarbonization and carbon capture for 30 years (early mentions appear in a 1994 report on climate to the United Nations).
An
oilsands plant in Fort McMurray, Alta. The federal government has
announced billions in clean energy incentives and tax credits for things
like carbon capture and storage. (Jason Franson/The Canadian Press)
"We are ready to go. We are waiting for the governments to collectively get at the table and join us and push this across the line. In my personal perspective, this is the single biggest imperative that we as people in the oil and gas business and as stewards of the land and the economy for the next generation, we absolutely need to make this happen as quickly as we can," Evans said.
Record profits prompt questions about investment
Oil companies are also coming off the most lucrative year they've ever seen.
At a time when there's money available, companies have been criticized for not investing more of their record profits into clean technology development or accelerating their commitments to existing options.
Advancing without government direction and support — and out of step with other countries like Norway — would kill the competitiveness of Canadian oil, Evans said.
"I think we would just ultimately say it's probably cheaper for us to pay the carbon tax and not abate the carbon. And then we have lost on two fronts: We have lost a global leadership opportunity … and we have not abated an iota of CO2."
A recent report commissioned by an environmental group concluded it would be significantly cheaper to meet reduction targets for greenhouse gases than it would be to pay carbon taxes on it.
Leach said the path forward depends on whether decisions are influenced more by politics or by global market and environmental factors.
That question rests largely with the industry.
"Is decarbonizing the oilsands something that has to happen for the future of the industry or is it something that has to happen so long as the current Liberal government makes it a priority," he said.
Evans remains optimistic the governments and companies can find a path forward.
"I have never heard a federal official tell me that they want to see production shut in and clearly the premier doesn't either. So with those basics, I feel we're going to be able to thread the needle here."
ABOUT THE AUTHOR
Paul Hendrick
time to build our own pipeline from Alberta to sarnia and cut Gretchen out of the loop before she cuts off the existing line under the Great Lakes.
Garry Horsnell
If reducing carbon emissions is so important, maybe PM Trudeau and his Liberals should stop subsidizing oil companies in the Alberta oil sands and stop backing the new Bay du Nord oil project off the coast of Newfoundland and stop letting companies in Canada sell and transport oil, natural gas and coal from Canada to China, the U.S.A. and other countries so people in those other countries can't keep burning the fossil fuels from Canada to keep generating millions of tons of carbon and greenhouse gas emissions per year to keep polluting the planet's air.
Dean Hobermann
If Toronto, Ottawa and Quebec were oil producers and all those liberal seats were at stake I guarantee that Trudeau wouldn't be so quick to sign anti oil agreements in Paris.
Doug Saunders
Get used to it... Photo ops, lip service and finger pointing are this Trudeau government's trademark.
Inga Petras
There is no proposal in his critique, just the negativity. It is understandable that we need to see what the US is planning to do before we put our plans in place, our economy is rather small.
Angie Cassidy
Ahhh
85 percent on people in planet earth will never see a carbon tax because
80 percent of oil companies are owned by countries like opec.
So the carbon tax is going to actually accomplish what ?
Dean Hobermann
Nothing about climate. The carbon tax is just another revenue generator for a federal government deeply in debt and cash strapped.
Denis Van Humbeck
Its all about money and nothing else.
Ian Davies
Queen DS is going to rescue O&G. She will put her media personality and lobbyist job skills to work and save the day?
Ian Davies
At the moment she is saving education by privatizing it?
Dallas Smith
It’s too bad everyone forgot about trees and the important work they do.
Bill Gardiner
They include them in climate models.
Ian Davies
Let's get to basics: the O&G industry or business sector is the one that produces emissions or pollutants and we (society) must adhere to the solutions set by industry.
In that case we should trust this industry to self-regulate.
Only the CEO forgot one small thing - IT IS CALLED TRUST.
Rembrandt Garland
Carbon tax sure won't help!
Any reason to think why not.......
Rembrandt Garland
Reply to Lynette Browne
That'll have to happen on a personal level, which doesn't seem likely either given our creature comforts addiction.
What kind of car do you drive. Lyn? And how often?
Ian Davies
Ian Davies
Rembrandt Garland
Reply to Ian Davies
Reply to Rembrandt Garland
Okay , can you suggest what is a more credible , balanced view news organization?
Rembrandt Garland
Reply to Taseko Tom
Globe & Mail is the most balanced.
Neil Kelly
Take your pick, Global, CTV, National Post, Sun, Globe and Mail.
Don Corey
It’s disgraceful that we have a federal Energy Minister who lacks the intestinal fortitude to meet and dialogue with the oil industry CEO’s. The industry appears to have a much more realistic vision on how to reach our carbon reduction targets, and when, than the minority federal government.
Vera Kovacova
"The intestinal fortitude" should be not a valid reason not to meet. Regardless of the difference in opinion they should meet and review the arguments.
Don Corey
Please take the time to read my post. Those lacking intestinal fortitude are incapable of meeting for the very reason that you state.
Steve Brockhouse
Nonsense. The request was a set up planned to produce failure. He was right to ignore the request.
Don Corey
That’s the standard response from those who know better. Thanks for confirming my assessment of the meeting avoidance.
Steve Brockhouse
I confirmed nothing except that you have no idea what you are talking about.
Pat Tewey
On the other hand, Steve, the polarization is getting so severe that it is probably better to meet all of them just not to let them use it as an argument for yet more polarization, as you can see.
Don Corey
Liberal avoidance is prevalent on all is they want to avoid, from foreign election interference to a dialogue with oil industry CEO’s (not lobbyists). Keep up with the standard MO lol.
Reply to Pat Tewey
Cool story Pat. Thanks for sharing.
Pat Tewey
Don Corey
I know that the minister refused to meet oil industry CEO’s. You have no excuse for his avoidance. Try harder next time.
Steve Brockhouse
I will even go so far as to agree with the comment made bu the quoted oil exec.
There has been far too much talk and too little action for far too long.
But it is real difficult to make progress when there are at least two provincial Premiers and one Federal party who do not believe any real action to combat Climate Change is necessary. How can the people understand the need for action if there is no proper guidance provided by the leaders.
Don Corey
Speculation and excuses…..the Liberal MO’s are on full display lol.
Steve Brockhouse
There was nothing be gained by that meeting with that group at that time. Had they suggested one on one meetings or nominated a spokesman to talk for all of them then it might have been worthwhile setting some time aside. As it was, he made the right decision.
Reply to Pat Tewey
Your new name is kinda cool.
Bill Lindsay
I think the word you were looking for is arrogance! I think he has been hanging around JT too long!
Don Corey
Sounds like the PM, always refusing to meet with the premiers when they request such. Yet another Liberal MO!
When will this government wake up and realize that dialogue, listening, understanding and reasoning is the only “right” and effective way to properly resolve issues, avoid delays and misunderstandings and minimize yet more divisiveness?
Don Corey
False and accusing; another typical MO.
They’re getting used up here.
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