Canadian oil and gas companies must do more to reduce emissions, says minister

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Delegates walk past an image of oil workers at the World Petroleum Congress in Calgary on September 18. Oil sands companies that are part of the Pathways Alliance aim to spend more than $24 billion on emissions reduction projects by 2030.Jeff McIntosh/The Canadian Press

Oil and gas companies must do more to reduce their emissions as the world prepares to significantly reduce its consumption of fossil fuels, Canada’s natural resources minister said.

Jonathan Wilkinson made the remarks as part of a broader “call to action” to Canada’s fossil fuel industry on the eve of the 24th World Petroleum Congress in Calgary on Sunday evening. He later told the Globe and Mail that the majority of oilsands producers are committed to going carbon neutral, but that “substantial action” is crucial to meeting 2050 climate goals.

“We need to receive purchase orders for equipment that will actually be put into the ground,” he said Sunday evening.

While demand for oil and gas is expected to peak for use in vehicles and combustion over the next decade, Wilkinson said, “countries that focus on producing very low carbon fossil fuels carbon” will likely be the last producers standing.

Indeed, the June oil forecast from the International Energy Agency indicates that peak demand for oil is in sight, and that the use of this fuel for transportation is expected to decline after 2026. However, noted the IEA, overall consumption will be supported by strong demand for petrochemical products.

But Mr. Wilkinson’s remarks on the future of fossil fuels sparked something of a political brawl with Alberta Premier Danielle Smith, who at the gala on Sunday countered that the province owns its reserves. of oil and gas and that it would increase flows while reducing emissions. producers are moving towards carbon neutrality by 2050.

Asked by media on Monday about her cross-arc shot at Mr Wilkinson during his speech, Ms Smith called the federal minister’s comments “tone deaf” and a “slap in the face” to those attending the one of the largest gatherings on fossil fuels in the world. .

“It’s not a declining industry. It’s an industry that’s moving away from emissions,” she said.

“I don’t like fighting with our federal counterparts, but I’m not going to allow them to attack our industry.”

Ms. Smith highlighted comments from Saudi Aramco Chief Executive Amin Nasser, who told Congress Monday morning that the “premature” phase-out of fossil fuels was endangering global energy security.

The head of the world’s largest oil producer said there were many shortcomings in the world’s approach to energy transition, including targets that were far removed from the needs of energy markets and the realities of balance between supply and demand.

Mr Nasser also criticized the IEA’s recent forecasts, saying they were mainly driven by “politics rather than markets”.

Reducing emissions, however, will depend on huge investments from oil companies.

And a report released last week by the Pembina Institute, an environmental think tank, found that these companies are making no new investments, even though they are on track to record their second-highest profits in a decade.

Oil sands companies that are part of the Pathways Alliance, which has committed to reaching net zero emissions by 2050, aim to spend more than $24 billion on emissions reduction projects by 2030 .

Pathways President Kendall Dilling doesn’t dispute the lack of large-scale investment, but he told the Globe on Monday that the group is doing “everything we humanly can to keep this project on track through 2030 “.

“We’re as eager as anyone to turn the earth, put steel in the ground and demonstrate that yes, these projects are going to happen,” he said. “But you can’t wave a magic wand and speed up this process by three years. You have to go through this initial process and we do it as quickly as possible.

Mr. Wilkinson acknowledged that reducing emissions will also depend on the federal and provincial governments establishing all the necessary rules and regulations to accelerate activities – particularly in the area of ​​carbon capture and sequestration.

Ottawa and Alberta agree that Canadian fossil fuel production should reach net zero emissions by 2050. They also agree that technologies such as carbon capture will be key to getting there and that both levels of government must work together .

Yet there remains a yawning chasm between the two when it comes to global demand for fossil fuels in the future and what that means for Canadian production.

Mr Wilkinson told the Globe he was not opposed to any energy source, as long as emissions issues were resolved. That includes natural gas, he said, which may play a role in the future “as long as you can capture the carbon and sequester it.”

Ms Smith is adamant about the continued role of combustion vehicles, but Mr Wilkinson countered that “from a scientific and environmental point of view, that simply cannot be true, otherwise we are going to find ourselves in a position where l The environment is deteriorating. very, very quickly.

“If Premier Smith is right, the environmental consequences are very serious indeed. »

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