Who Benefits: An investigation of Foreign Ownership in the Oil Sands – Summary of Report

This post was written by Oil Sands Divestment and published on July 1, 2021.

On May 11, 2020, environmental organizations; Environmental Defence, Stand.earth, and Équiterre published an investigative report analyzing the foreign ownership of the Canadian oil sands.

The COVID-19 pandemic greatly disrupted the global economy, including the oil and gas industry. However, prior to the pandemic oil sands operators in Canada have been cutting jobs, paying fewer royalties, and relying more and more on government subsidies to keep their operations alive. Despite all this, the report points to the Canadian government’s unwavering support to the oil sands industry through increasing subsidies, bailout packages, the purchasing of the Trans Mountain pipeline, and more.

For decades, lobbyists have argued the importance of government subsidies to oil sands operations to sustain and benefit the Canadian economy. However, this report identifies this is not the case. In fact, of the fourteen publicly traded companies invested in the oil sands only two, Athabasca Oil Cooperation and Pengrowth Energy are owned in the majority by Canadians.  On the contrary, Americans own more than 52% of oil sands production in Canada, and Chinese national oil companies control 5.2% of all production. Ultimately, this results in 44% of the $645 billion in oil sands assist being foreign-owned.

Moreover, technological advancements in the industry, construction modularization, and decreasing profitability have led to 53,000 jobs being lost in the industry from 2014 to 2019.

Citing finical experts, the report warns that job losses in the oil sands industry will only increase. The mounting pressure to tackle climate change, paired with the affordability of renewable energy will “turn once profitable energy projects into stranded assets that could leave behind billions of dollars in environmental liabilities”.

Energy analysts increasingly acknowledge the damages of COVID-19 on Alberta’s economy, but also recognized an opportunity to rebuild in a way that allows “Canada to compete and prosper in the twenty-first century economy”. This involves moving away from oil sands to reinvesting in renewable energy and a sustainable economy that supports both Canadians and the environment.

Download the full report here: https://www.stand.earth/publication/who-benefits-investigation-foreign-ownership-oil-sands