Canadian oilsands companies yet to follow-up climate pledges despite record profits: analysis
CBC
Canadian oil and gas companies are not using their record profits to invest in decarbonization and are instead pursuing share re-purchases and dividend payments, according to a new analysis from the Pembina Institute, a renewable energy think tank.
In June of last year, five of Canada's largest oil producers — Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy and Suncor Energy — announced they were forming the Oil Sands Pathway to Net Zero Alliance, with a goal to achieve net-zero greenhouse gas emissions from oilsands operations by 2050.
The organization was later rebranded the Pathways Alliance, and added ConocoPhillips Canada to its ranks. It has set a target for the oilsands sector to achieve a 22 million tonne annual reduction by 2030.
Jan Gorski, program director for oil and gas at the Pembina Institute, said the goal of the report, which was released Friday, was to "examine the difference between the words and the actions of Pathways" since its formation.
"We're in a place right now where the industry is seeing record profits. There are steps that they can take right now to reduce emissions," Gorski said.
Despite that, the Pembina Institute said most details of decarbonization plans from Pathways Alliance members remain undisclosed. Since the group was established, the institute said there have been no significant decarbonization investment decisions made by its members.
Kendall Dilling, the president of the Pathways Alliance, wrote in a statement that the group is progressing with its emissions reductions plans as quickly as possible while pursuing economic and regulatory certainty from governments.
He said such certainty would equip companies to deploy billions of dollars in capital between now and 2030 and beyond.
"The expectation by the Pembina Institute that Pathways Alliance companies make final investment decisions on these multi billion-dollar projects before governments have finalized regulatory frameworks to support them is unrealistic," Dilling wrote.
Gorski said he recognizes that carbon capture and utilization projects have a longer lead time. But other projects, such as energy efficiency projects, can be moved on faster.
In 2022, Canadian oil and gas companies' free cashflow is estimated to reach $152 billion, according to the Pembina Institute — the highest level of profits ever.
The report released Friday examines the Pathways Alliance's public decarbonization pledges and compares them with actions that each company is currently taking on decarbonization.
For example, the report cites a Cenovus announcement that it would invest $1 billion over the next five years in emissions reductions, but it has not announced any project details related to this to date. This year, Cenovus spent the same amount of money re-purchasing shares in one 90-day period. A spokesperson with Cenovus deferred comment on the report to Pathways Alliance.
Dilling with the Pathways Alliance cited various work underway at present, including an application submitted to the government of Alberta for underground storage space for its proposal to construct "one of the world's largest" CCS projects. Results from that competition are expected in October.
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