If oil and gas companies aren’t cutting emissions at peak profits, when will they get in the game?

This article was written by Laura Cameron and published by CBC on November 17, 20202.

Canadian oil and gas companies were in Egypt last week for the global climate summit COP27 — among some 636 fossil fuel lobbyists — to position themselves as leaders in industry emissions reductions at an event hosted by the Canadian government. 

What was not on the agenda was documented proof of success, because Canada’s top oilsands producers have invested very little of their money into decarbonization and have failed to reduce emissions. In fact, the sector’s emissions grew 20 per cent from 2005 to 2019. This despite their net-zero promises and record profits — expected to top $150 billion this year.

Instead, Canadian oil and gas companies continue to ask for government handouts, from seeking $50 billion in taxpayer dollars to reach net-zero production to lobbying for a 75 per cent investment tax credit for carbon capture and storage (CCS) projects. 

Meanwhile, industry is opposing regulations that would limit their emissions, including the forthcoming oil and gas emissions cap policy. 

Fossil fuel lobbyists met with federal government ministers and decision-makers over 100 times in September alone. Lobbyists for Pathways Alliance — comprising the country’s six biggest oilsands producers — were the busiest among them. In the same month, the group registered five new lobbyists to discuss priorities including “eligibility for Pathways Alliance projects” in the federal Net Zero Accelerator fund.

Read the fine print

Last month, Pathways Alliance made headlines with its plan to invest $24.1 billion in emissions reductions projects by 2030, but as usual, it pays to read the fine print. Spread out over eight years, this is only two per cent of the companies’ annual profits based on projected 2022 revenues, and the investment is conditional on even more government support. 

Moreover, nearly a third of this pledge — over $7 billion — will actually be borne by the Canadian public, through the federal CCS tax credit. That’s on top of the billions in government support the industry already receives annually

Reports out recently from the International Energy Agency and the UN Environment Program underscore that there should be no public money for new oil and gas production, that natural gas is not a transition fuel, and that oil and gas demand must decline on a path to limit global warming to 1.5°C. And the latest report on the remaining “budget” of burnable carbon shows that reaching zero emissions by mid-century will require cuts equal to what we saw during the pandemic in 2020 every year for the next three decades. 

This international evidence illustrates where the puck is going, and the Canadian economy has to catch up.

Rather than waiting on the bench, oil and gas companies need to get in the game and put their money where their mouth is. As Canadians grapple with the rising cost of living and the government tightens its purse strings, Canada’s oil and gas producers should be funnelling profits toward proven climate solutions, not lobbying and shareholders. 

Leadership equals action

While waiting for government to put more public money on the table, oil and gas companies continue to increase their emissions. The electricity sector has reduced emissions by 52 per cent since 2005, while emissions from heavy industry have dropped 18 per cent. Meanwhile, oil and gas sector emissions increased by 20 per cent. In today’s world, decarbonizing must be internalized as a cost of doing business. Government money, on the other hand, should go toward the most reliable, long-term economic and climate gains.

Real industry leadership would mean taking ambitious action in line with national targets, prioritizing near-term results. That means reducing emissions by at least 40 per cent below 2005 levels by 2030. But CCS — which accounts for two-thirds of the Pathways Alliance’s new investment budget — will not help meet that target. IPCC experts stress that this technology will not be a significant player in emissions reductions this decade, given the time needed to build the significant infrastructure required and unproven cost-effectiveness or scalability. 

What, then, should be in the industry’s starting lineup? Existing cost-effective and readily available solutions that can cut pollution right away: reducing methane leakage, electrifying industrial processes, retiring facilities at the end of their life, and increasing energy efficiency. Industry net-zero plans also must align with UN criteria and credible 1.5°C pathways — which require no further increases in fossil fuel production. 

As it stands, it looks like Canada’s oil and gas sector is trying to run out the clock on climate action. But that’s not a winning strategy when we’re losing the game.

Read the original article here: https://www.cbc.ca/news/opinion/opinion-cop27-oil-and-gas-emissions-cuts-1.6652662