Vol. 26, No.18 Week of May 02, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

Canadian prime minister sets 3rd goal for GHG emission reductions

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Gary Park

for Petroleum News

Canadian Prime Minister Justin Trudeau has opted for hasty and staggering measures to ensure a place on President Joe Biden’s bandwagon to slash greenhouse gas emissions.

Without any warning, Trudeau told leaders at Biden’s virtual Earth Summit on April 22 that Canada would reduce its emissions by 40% to 45% below 2005 levels by 2030, only three days after the federal budget set a goal of 36% and four months after he targeted 30%.

Despite this succession of new pledges, Canada still lags far behind Biden’s pledge to cut U.S. emissions by more than 50%, the European Union’s 55% target and the United Kingdom’s whopping 68%.

The fact Canada has failed to lower its carbon output by any measurable amount since signing on to the Paris Agreement in 2005 doesn’t bother cabinet ministers, who believe the new objective is “attainable.”


Caught off guard by Trudeau’s apparent desire to play ball with Biden, the economic sectors that will be forced to carry the load are oozing skepticism and unease about how they are expected to lead the transition to a cleaner world.

All they can see so far is a series of pledged measures, such as raising the price of carbon from C$50 per metric ton to an upper limit of C$170 in 2030, developing a regulatory framework for lowering carbon intensity in fossil fuels and a bundle of multibillion-dollar programs to advance solar and wind power and electrification of vehicles, while retrofitting homes and office towers.

There is no easy route to Trudeau’s new summit, given that Canada relies heavily on hydro power.

While the United States relies on fossil fuels to support 60% of its power generation, with coal accounting for 20%, Canada generates 18% of its power from fossil fuels, with coal’s share down to 8%.

Where the answers will come from is spreading disquiet within the Canadian petroleum industry, notably Jim Carter, the retired president of the Syncrude Canada oil sands consortium and chair of the Alberta Carbon Capture and Storage Development Council.

“I’m more than a bit concerned that governments, in their zeal to beat their chests ... are stretching out and (setting) targets they don’t have any idea how they are going to meet,” he told the Calgary Herald.

“We are moving far too fast … without understanding the broader implications for our Canadian economy (or the role) science and technology will play. There are limits.”

Cleanup underway in oil sands

In 2019, Canada’s oil and gas sector accounted for 26% of the national emissions, just a shade ahead of transportation, but oil sands producers have been making solid progress in cleaning up their own backyard, spending billions to make it happen.

The Canadian Association of Petroleum Producers estimates that per barrel emissions in the oil sands have been reduced by 21% since 2009 and could be lowered by another 20% to 27% before 2030.

But forecasts that total oil sands production will continue to grow means overall emissions will offset some of the per barrel gains.

Kevin Birn, with the energy consulting firm IHS Markit, said the petroleum industry is capable of “making material large-scale reductions” if it is given firm directions and deadlines and time to develop plans. Otherwise the sector will be incapable of meeting demands for the commodities it produces.

Keith Stewart, Greenpeace Canada’s senior energy strategist, has set the stage for what lies ahead.

If Canada has any hope of attaining its 45% goal, that means freezing oil production at its current levels, which translates into a “big political battle,” he said.

Robert Fitzmartyn, an analyst at Stifel First Energy, said he expects exploration and production companies will have to accelerate the pace of carbon sequestration initiatives, credible proposals for hydrogen-based projects and success in attracting capital investment.

TC Energy, the major Calgary-based company that operates a vast network of pipelines in Canada and the U.S., said it “sees tremendous opportunities in energy transition. Billions of dollars in new investments will be required in the world’s shift to lower GHG emissions. As part of our contribution, we are investing in several renewable energy and GHG reduction projects.”

But the mood in much of the oil patch was captured by University of Calgary economist Jennifer Winter, who expressed surprise that the Trudeau administration keeps moving its own goalposts so often.

“Anything is possible if governments are willing to throw enough money at it. But this is more a question of whether this aggressive pathway is worth the cost of going on it.”

Instead of concentrating on targets, Winter said countries should try to match policies in order to ensure a level playing field.

Alberta Environment Minister Jason Nixon said that, despite sharing its climate priorities with the Trudeau government before the Biden summit, his government was not consulted, or made aware of the new target.

He said goals don’t mean much without a realistic plan to achieve them, noting that the programs announced and proposed by Trudeau fall far short of supporting clean hydrogen, carbon capture and storage and other technology investments.


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