Environmental groups urge federal government not to 'water down' oil and gas emissions cap

As environmental groups urge the federal government to move quickly with an aggressive cap on emissions from the country's oil and gas sector, the industry itself says such a move could actually slow down the sector's own decarbonization efforts.

With world leaders preparing to head to Egypt next month for the 27th United Nations climate conference, environmentalists say now is the time for the Trudeau government to announce the specific targets it plans to impose on the oil and gas sector in order to ensure Canada meets its climate commitments.

"We know that time is of the essence with this policy," said Aly Hyder Ali of Environmental Defence, during a virtual news conference Thursday organized by Climate Action Network.

"We are seeing the oil and gas industry and its lobbyists hard at work to weaken and delay this policy before it is even implemented."

The federal government indicated earlier this year that it would impose a cap on greenhouse gas emissions from the oil and gas sector in order to enable Canada to meet its 2030 emissions reduction target.

While the government has not yet indicated what the allowable level of emissions will be, Environment Minister Steven Guilbeault said recently the cap will be announced in "a matter of months."

Some environmentalists say the oil and gas sector — which is the country's largest producer of greenhouse gases, producing 26 per cent of total emissions — should be pushed to reduce its emissions by a whopping 60 per cent by 2030, in order to keep global temperatures from rising more than 1.5 degrees Celsius and ensure the burden of decarbonization is spread equally among different sectors.

For its own part, the federal government has previously stated it believes Canada's oilpatch is capable of reducing emissions by 31 per cent below 2005 levels by 2030, or 42 per cent below 2019 levels.

That would bring total emissions from the sector — including production, refining and transportation via pipelines — to 110 million tonnes per year by 2030, down from 191 million tonnes in 2019. They haven't been that low in more than three decades.

Oilsands industry leaders have suggested meeting such an ambitious target in a relatively short time frame is likely unachievable. Instead, they have set their own targets through the Pathways Alliance, pledging to reduce oilsands production emissions by 22 million tonnes by 2030. That would represent an approximate 30 per cent reduction from current levels.

Pathways companies have proposed spending $16.5 billion before 2030 on the first stage of a massive proposed carbon capture and storage facility near Cold Lake, Alta., a project which would be the centrepiece of their net-zero ambitions.

However, a final investment decision has not yet been made, and the facility would not begin injecting carbon until 2026, at the earliest.

In an interview this week, Martha Hall Findlay — outgoing chief climate officer for Suncor Energy Inc. and one of the founders of the Pathways Alliance — said it is technically impossible to reduce oilsands emissions by 40 per cent or more by 2030.

She said industry needs support from government to get costly carbon capture solutions up and running, not a punitive cap that could ultimately make the implementation of emissions reduction technology more difficult.

"We’ve been saying all along we will get to net-zero by 2050, but it is simply not physically possible to get it done by 2030," Hall Findlay said

"We need to invest – all this stuff takes investment. So to put financial penalties on something that’s already challenging from a financial perspective, you’re one step forward, two steps back.”

In its own submission to the federal government last month, the Canadian Association of Petroleum Producers said an emissions reduction cap would ultimately require producers to cut production to achieve compliance, something CAPP said will limit Canada’s ability to help its allies through the global energy crisis as well as make it more difficult for companies to invest in decarbonization.

"Targets must reflect what can be realistically achieved," the CAPP submission stated. "Industry will work with governments to develop a trajectory supporting the goals of climate, energy security and affordability."

Some climate advocates say the oil and gas industry is relying too heavily on carbon capture and storage as the main lever for reducing industry emissions. They say the industry needs to be moving quickly on shorter-term solutions, such as methane reduction.

A report released earlier this year by the Pembina Institute argued addressing methane is low-cost and much can be done using existing technologies already required in other jurisdictions. The report said rapidly tackling methane will be crucial if the oil and gas sector is to achieve meaningful emission reductions during this decade.

This report by The Canadian Press was first published Oct. 20, 2022.