Gas drillers in Canada face big shift in Trudeau’s climate plan

Canada’s natural gas producers will face the greatest burden among energy companies under Prime Minister Justin Trudeau’s new emissions-reduction plan, just as the industry faces renewed pressure to increase output.

Canada’s natural gas producers will face the greatest burden among energy companies under Prime Minister Justin Trudeau’s new emissions-reduction plan, just as the industry faces renewed pressure to increase output.

Gas drillers and processors are projected to cut emissions by 45 per cent by 2030 versus 2019 levels. That compares with a 35 per cent reduction that’s expected from larger-emitting oil sands producers, according to government documents. Dozens of companies operate gas wells, pipelines and processing plants scattered across the country, often in remote regions, making it challenging to deploy technologies that control carbon. 

Trudeau’s climate plan comes as Canada faces demands to increase its gas output. Russia’s invasion of Ukraine has focused attention on finding alternative supplies for Europe, giving impetus to long-delayed projects to ship Canadian liquefied natural gas abroad.

“I think we are kind of on a tightrope,” said Mark Oberstoetter, lead analyst for upstream research at Wood Mackenzie Ltd. in Calgary. “We want to be ambitious with these targets but also fill LNG Canada,” a huge LNG facility backed by Shell Plc that’s being built on the west coast. 

The multitude of gas producers don’t have a single goal. For example, the government plan calls for a 42 per cent total reduction in emissions from the oil and gas sector. Oil sands companies have set a 32 per cent target through a plan called Oil Sands Pathways to Net Zero.