The CEOs and executives of some of Canada’s largest oil and gas companies defended their industry Thursday, the same day a group of Canadians personally affected by climate change called on the federal government to implement its proposal to limit emissions from the oil and gas sector.
The CEOs and senior executives of Cenovus Energy Inc., Enbridge Inc., Imperial Oil Ltd., Shell Canada Ltd. and Suncor Energy Inc. appeared by video conference Thursday afternoon before the House of Commons standing committee on media environment and sustainable development.
The executives said that while they oppose an emissions cap in their sector, they support carbon pricing as a tool to reduce the environmental impact of their industry.
“My view is that the (proposed) emissions cap is unnecessary regulation,” said Suncor CEO Rich Kruger.
“I support a coordinated economy-wide carbon price, because I believe that will drive innovation and economic incentives for all of our parties to continue to improve our business.”
“A carbon tax can work to reduce emissions, but it has to be applied universally and ubiquitously, and cannot target a particular industry or segment of the economy,” said Cenovus CEO Jon McKenzie.
The CEOs’ appearance was the result of a motion in April introduced by NDP environmental critic Laurel Collins, who asked executives to explain what their companies are doing to address climate change.
One after another Thursday, executives talked about their goal of reducing emissions while increasing Canada’s oil production in the coming years.
“All credible studies show that we will continue to need all forms of energy, including oil, to help meet the world’s growing energy demand,” McKenzie said.
“That oil will be produced somewhere and it should be produced in Canada, where we have some of the strictest regulations and industry-leading ESG performance.”
Just hours before Thursday’s meeting, a group of Canadians personally affected by climate change called on the federal government to implement its proposal to limit emissions from the oil and gas sector. The small group of people spoke to reporters at a news conference on Parliament Hill hosted by the Climate Action Network.
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The group included a woman who lost her home in Kelowna, BC, in last year’s wildfires, a woman from Merritt, BC, who survived severe flooding in 2021, and a man from Tuktoyaktuk, NWT, who is worried about the threat posed by rising sea levels. to his arctic community.
“I came to Ottawa to share my story because I believe climate change is not an abstract concept,” said Meghan Fandrich, a resident of Lytton, British Columbia, which is slowly beginning to rebuild after more than 90 per cent of the village was destroyed in a forest fire in 2021. “It is not something that is going to affect us one day… it is ongoing.
“We need to do what we can, and one step we could take that would have a phenomenal effect is to put a really firm cap on carbon emissions.”
Scientists at Copernicus, the Earth monitoring arm of the European Union, reported this week that last month was the warmest May ever recorded globally, with an average temperature 1.52 C higher than the pre-industrial average.
The oil and gas sector is Canada’s largest source of greenhouse gas emissions, accounting for nearly a third of the country’s total emissions and continuing to rise, largely due to increased production from Alberta’s tar sands. .
The federal government has proposed a legislative cap on emissions from the oil and gas sector, something the industry opposes.
Under a proposed framework published last December, the government has suggested a cap that would require the sector to reduce greenhouse gas emissions by 35 to 38 percent from 2019 levels by 2030. The sector would also have the option of purchasing offset credits or contributing to a decarbonization fund that would reduce that requirement to just 20 to 23 percent.
The government has said the cap is aimed at limiting pollution, not oil and gas production, but the oil and gas sector has said the targets are too strict and would result in companies cutting production.
The province of Alberta and business groups like the Calgary Chamber of Commerce also strongly oppose the proposed emissions cap.
The oil and gas sector has said that instead of a legislated limit, it needs federal and provincial support to help it meet its own emissions reduction plans. A group of oil sands companies, including Imperial, Cenovus and Suncor, all of which will testify on Thursday, have jointly committed to reaching net-zero emissions by 2050.
The tar sands companies, calling themselves the Pathways Alliance, have proposed spending $16.5 billion on a massive carbon capture and storage network for northern Alberta. But the group has not yet made a final investment decision, saying more certainty is required over the level of government support and funding for the project.
Collins, the NDP MP, repeatedly asked executives at Thursday’s committee meeting to explain why their companies are not moving faster to decarbonize. He said Canadians are concerned about the increasing number of extreme weather events such as wildfires, droughts and “heat domes” as the climate warms.
Some Canadian oil and gas companies posted record profits in 2022 as commodity prices soared following Russia’s invasion of Ukraine, and the industry continues to generate healthy cash flows this year. Collins said companies can and should do more to mitigate the fossil fuel sector’s impact on the climate.
“We need a tax on excess profits (in the oil and gas sector) to invest in climate solutions,” Collins told reporters.
Clean energy think tank the Pembina Institute said federal and provincial measures to support emissions reduction investments, such as industrial carbon pricing and announced federal tax credits, are generous, even compared to some of the incentives that exist in the US.
In an email Thursday morning, Pembina oil and gas program director MC Bouchard said it is urgent for companies to take action.
“Today’s hearing is another reminder that additional regulation is needed to ensure that promised investments and projects finally begin to move forward,” he said.
