Canada’s oil and gas companies are betting on moonshots–it can't be with our money

The contrast couldn’t have been much more striking. On the same day the Intergovernmental Panel on Climate Change released a report showing both how far the world is from meeting its climate targets and the central role wind and solar energy have to play in getting it back on track, one of Canada’s biggest oil and gas companies decided it was time to get out of the renewable energy business entirely.

Suncor, which has developed eight wind projects across three provinces since 2002 and has a stake in the Forty Mile Solar installation in Alberta, announced Monday that it would exit that business to focus on things like hydrogen and carbon capture technology.

When Environment Minister Steven Guilbeault said recently that “business as usual” was over for Canada’s oil and gas industry, this surely wasn’t what he had in mind.

In fairness, Suncor isn’t turning its back on renewable power completely, since it can still procure wind and solar from other companies through power purchase agreements. But while European oil companies like BP, Shell, Eni and Equinor continue to add billions of dollars to their annual investments in renewable energy, which include massive new wind farms off the east coast of the United States, Suncor will follow the path laid out by American companies like ExxonMobil and Chevron.

That path is defined by two things: a renewed focus on fossil fuels, along with so-called “moonshot” technologies that might, in theory, eventually decarbonize them.

Whether this represents a prudent strategy or just blind faith in the status quo remains to be seen. But it should be clear by now that anyone expecting North America’s oil companies to fund or finance the energy transition are going to be sorely disappointed. Those companies are placing a bet on our collective unwillingness to move more quickly on climate policy and expecting us to miss the targets laid out in the IPCC report by a wide margin.

That bet is hardly a sure thing, mind you. As UN Secretary-General António Guterres said in a statement: “Investing in new fossil fuel infrastructure is moral and economic madness. Such investments will soon be stranded assets, a blot on the landscape, and a blight on investment portfolios.”

Governments and institutions that take climate change seriously, including our own federal government, can’t afford to wait around for these companies or their shareholders to figure that out.

Instead, those governments and institutions need to get far more serious about supporting and stewarding investments in renewable energy, both at home and abroad. And if they want to push back against Russian geopolitical aggression, which has been bankrolled by its fossil fuel resources, they can focus those investment dollars in western Europe.

As Dave Jones, the global program lead with the U.K.-based think tank Ember, told Forbes recently, “Ukraine should be the turning point to enable governments to go full throttle on renewable energy investments.”

Climate policy critics will surely suggest an aggressive push towards renewable energy will cost too much and do too little, although with natural gas and petrol prices in Europe soaring to record levels, it’s much harder for them to pretend fossil fuels are in any way affordable. But according to a recent report from Wärtsilä Energy, a Finnish company that specializes in industrial energy technology, a rapid transition could actually save Europeans money.

“Increasing energy independence does not need to cost more for power companies or energy consumers,” it says. “Accelerating the transition to a clean energy system could save European countries 323 billion EUR by 2030, compared to our modelled baseline scenario.”

So what’s standing in the way? Inertia and political resistance, mostly. We’ve seen that here in Canada, where Alberta’s environment minister has repeatedly described the federal Emissions Reduction Plan as “insane.” But as the IPCC’s latest report makes clear, continuing down the path we’re on right now is hardly rational, given the long-term ecological and economic consequences.

If Canada’s oil and gas companies want to bet on moonshots rather than proven solutions like wind and solar, we need to ensure they’re doing it with their own money, not ours.