Pembina Institute Explains Need For Emissions Cap On Oil And Gas Sectors

Roy L Hales/Cortes Currents - According to Environment and Climate Change Canada, the oil and gas sector is a major contributor to Canada’s economy, employing 182,000 people and generating $209 billion in GDP during 2023, yet it is also the source of 31% of Canada’’s Greenhouse gas emissions.

 “Demand for oil and gas is not going to go to zero tomorrow.  It is a transition that takes decades  to undergo.  There will be a role for oil and gas as we move forward along that transition, but it is likely to be a  cleaner oil and gas sector as the rest of the world stops buying  the oil and gas products that Canada and other countries produce. Which , I think, really underlines the importance of investing in decarbonization now while we're still using oil and gas  to 2050 and a little bit beyond  if we get on a net zero trajectory,” explained Janetta McKenzie  from the Pembina Institute, a Canadian think tank and non-profit focused on energy. 

She was responding to a new report from the Federal Parliamentary Budget Office. 

Janetta McKenzie:  “They were assuming that very little action was taken by oil sands firms in particular, to reduce emissions on site, and therefore they would be choosing to stop producing. Across the sector, there's been a lot of commitments to slashing emissions by 2030. There's billions of dollars on offer through federal and provincial tax incentive and grant programs.  We think there is a path towards choosing to decarbonize, choosing to reduce emissions and not just choosing to shut in production. We think it's a pretty narrow analysis that's based on a very specific set of assumptions that doesn't necessarily reflect the suite of options available to the sector.”

The oil sector has been promoting the idea of carbon capture for years. A group of oil companies put forward a $16.5-billion plan for a massive carbon capture and storage (CCS) network in northern Alberta, but has not implemented it. 

Janetta McKenzie: “We have not seen a lot of movement from the oil sands Pathways Alliance carbon capture project. This was announced several years ago. We simply haven't seen it  move ahead. In the absence of news on that, it's difficult to make the call on whether those big emissions reduction projects  will be implemented anytime soon.”

According to Environment and Climate Change Canada, “New regulations to be finalized later this fall will ensure that the sector continues to cut methane emissions by at least 75% from 2012 levels by 2030. Carbon capture is also going to play an increasingly important role  in reducing the emissions from oil and gas production and Canada is well placed to cement its position as a global leader in this critical technology. According to both the IPCC and the International Energy Agency, there's no credible plan to carbon neutrality without carbon management technologies such as carbon capture and storage and their deployment must be rapid and immense, scaling up by nearly 200 times by 2050.”

Janetta McKenzie: “It's difficult to say what is on the docket  for these firms right now. I will say, with the combination of policy, like industrial carbon pricing,  incentives, tax incentives like the carbon capture incentive tax credit from the federal government and provincial grants in particular for carbon capture, but also other emissions reductions technologies plus the possibility of doing a deal with the Canada Growth Fund, the conditions for the last couple of years have been quite good to get a pretty package  to incentivize and encourage the industry  to move forward with these things.”