Why you should take oilsands giants' net-zero pledge with a barrel of skepticism

It has been a tough few weeks for the global oil industry. Exxon and Chevron’s shareholders are demanding stronger climate action. Royal Dutch Shell was ordered by a Dutch court to reduce its emissions by 45 per cent by 2030. And the International Energy Agency (IEA) concluded that the Paris Agreement goal to limit global warming to 1.5 C demands a 75 per cent reduction in oil consumption by 2050, with no investments in new fossil fuel supply starting today.

Within days, oilsands heavyweight Suncor announced new targets to reduce its greenhouse gas emissions to 30 per cent below its 2019 level by 2030 and to achieve net-zero by 2050. This week, five Canadian oil companies joined forces in a new Pathways to Net Zero initiative, the goal of which is to achieve net-zero in oilsands operations by 2050.

While we applaud emissions reductions by any sector, we weigh oil and gas industry climate commitments with considerable skepticism. The industry has a history of rhetorical strategies that understate its contribution to climate change and overstate its progress. Let’s consider four of those strategies.

The first is to conflate oil and gas with “energy.” The euphemism has been spectacularly successful (as was an earlier shift from “tar sands” to “oilsands”). Media and politicians today routinely refer to the oil and gas industry as the energy sector.

“Energy” highlights the benefit of fossil fuels while downplaying that this particular energy source accounts for 75 per cent of global greenhouse gas emissions. In so doing, it sidesteps a critical conversation about which forms of energy Canada will rely on and which products we will export in years to come.

A second rhetorical strategy is to select metrics and baselines that present the industry’s performance in the most positive light. A familiar example is to emphasize declining emissions intensity per barrel, even as absolute emissions are increasing.

Suncor employed the favourable reference point strategy in committing to reductions relative to 2019, rather than Canada’s Paris Agreement baseline of 2005. It’s understandable for any company to track an improvement from the date of an operational change. However, there’s no ignoring the 19 per cent emissions increase in oil and gas emissions from 2005 to 2019.

Even if the entire industry matched Suncor’s new target — which it has not — that would amount to a 16 per cent reduction from that sector between 2005 and 2030, far short of Canada’s target to cut emissions by 40 per cent to 45 per cent. The implication is that other industries and households would need to pick up the slack by making cuts more than three times greater than the oil industry’s.

A third rhetorical strategy is to emphasize distant goals rather than current performance. We’ve heard a lot about Canadian producers’ goal to match the least carbon-intensive crudes globally. Many, including a Globe and Mail columnist, apparently have concluded that we are already there or close to meeting that goal. In fact, peer-reviewed research published in leading journals in 2018 and 2020 concluded that Canada’s heavy oil ranks among the most carbon-intensive in the world. A followup study found variation depending on specific producer-refinery combinations, but did not challenge the greater carbon intensity of Canada’s unconventional oil.

There’s certainly ample room for improvement, but our competitors have similar incentives — and a big head start.

The latest aspirational target is “net-zero” by 2050. We’re struck that the oilsands initiative announced this week makes no mention of any target before 2050, even though Canada has a looming 2030 Paris Agreement target.

Net-zero is an appropriate goal for wealthy countries like Canada. It’s more problematic, however, for individual companies, whose promises often rest on highly optimistic assumptions about abundance of carbon sequestration and/or innovations to dramatically reduce the costs of negative emissions technologies. It is telling that the IEA’s 1.5 C report reserved negative emissions primarily for industries for which reductions are especially costly and to buy humanity time to stabilize the climate, while anticipating a deep and lower-cost shift from fossil fuels to renewables.

Bold industry commitments also often rest on government funding. The new Pathways initiative emphasizes the need for “collaboration” with the federal and provincial governments, a thinly veiled call for taxpayers to subsidize the oil industry’s reduction of its own pollution.

A final rhetorical strategy is to consider only the emissions associated with production, rather than the full life cycle, which also includes refining and fuel combustion. This is the approach taken both by Suncor and the new Pathways initiative partners.

There is a rationale for this, since under the Paris Agreement, Canada is only accountable for emissions within its borders. Refining and combustion, which account for the majority of emissions per barrel of Canadian oil, occur in the countries where we export three-quarters of our production.

There are, however, problems with ignoring Canada’s contribution to global emissions. There is widespread misunderstanding that industry’s net-zero commitments refer to all emissions, not just the fraction released during extraction.

Moreover, in ignoring downstream emissions, we also ignore the economic risk Canada faces when destination countries act to reduce their own emissions. Canada’s oil is especially vulnerable to contraction of global markets by virtue of its high cost and high carbon intensity. Investing tens of billions of industry’s and taxpayers’ dollars in carbon capture and sequestration only makes sense if we assume the rest of the world will keep consuming lots of oil, despite availability of lower-cost energy alternatives.

Used as intended, fossil fuels cause global warming. It’s time for Canada to move beyond the rhetoric and plan for a carbon-constrained world.

Kathryn Harrison is a professor of political science at the University of British Columbia.

Martin Olszynski is an associate professor at the University of Calgary's Faculty of Law.

Patrick McCurdy (PhD, LSE) is an associate professor in the department of communication at the University of Ottawa.