Canadian oil industry clashes with Trudeau over new climate plans for 2030. By Reuters

Canadian oil industry clashes with Trudeau over new climate plans for 2030. By Reuters

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© Reuters. FILE PHOTO: Suncor Tar Sand Factory Near the Athabasca River at Their Mining Operations Near Fort McMurray, Alberta, September 17, 2014. REUTERS / Todd Korol / File Photo

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Author: Nia Williams

CALGARY, Alberta (Reuters) – Canada’s first emission reduction roadmap relies heavily on the oil and gas sector to help Ottawa meet its 2030 climate target, but there is still a big gap between what industry and government say are achievable reductions.

Oil and gas are the most polluting sectors in Canada, accounting for 26% of total emissions. If the liberal government of Prime Minister Justin Trudeau wants to meet its climate goal of reducing total emissions by 40% -45% below 2005 levels by 2030, the oil and gas industry will have to make drastic cuts.

Canada has so far missed every emission reduction target it has set, with oil and gas pollution increasing by 19% between 2005 and 2019. Canada’s new emission reduction plan, announced on Tuesday, aims to reduce oil and gas emissions by 42% compared to current levels by 2030.

“Ambition is one thing, action is what is needed,” Suncor Energy CEO Mark Little said at a sustainability conference in Vancouver on Tuesday, adding that the industry needs to work with the government to align climate goals. .

The Alliance of Oil Sands to Net Zero Alliance, a group of six Canadian oil and gas companies, including Suncor, aims to reduce by 32% by 2030. The alliance, which accounts for 90% of northern Alberta’s oil sands production, is aiming for net emissions by 2050.

“The Pathways Alliance is clear that the interim targets set for our industry need to be flexible, realistic and achievable,” Kendall Dilling, the group’s interim director, said in a statement.

The Trudeau government, which has had strained relations with the oil and gas industry since coming to power in 2015, is also developing a limit on emissions from oil sands as promised in the last election campaign.

Natural Resources Minister Jonathan Wilkinson said he had talked to members of the alliance about the goal of reducing emissions.

“What we’ve done is we’ve set some ambitious goals, and we’re going to sit down with the sector and work with them to make sure we really have a plan and a path to achieve them,” Wilkinson said in a phone interview.

HEAVY LIFT

Ottawa relies on several levers to reduce oil and gas emissions, such as reducing methane production and adopting new technologies including carbon capture and storage (CCS), said Dave Sawyer, chief economist at the Canadian Climate Institute.

CCS involves capturing and sustaining emissions underground, an expensive process for which the oil and gas sector wants to fund public money. Ottawa is expected to announce a tax credit for CCS in the 2022 budget next week after months of negotiations.

“The job of the industry is to cut costs and transfer risk from its shareholders to someone else, so subsidizing emission reductions is being discussed here,” Sawyer said.

This is despite the increase in cash flows due to rising crude oil prices, while the Russian invasion of Ukraine disrupts global oil supplies.

Deborah Yedlin, executive director of the Calgary Chamber of Commerce, a business lobby group at the heart of the oil slick, said high commodity prices are likely to be short-lived and accelerated climate targets will require more costs on commercial demonstration projects.

“The industry will therefore require government investment in technology through public-private partnerships,” Yedlin said.

Many environmental activists have accused the oil and gas industry of not doing their fair share. The sector is expected to reduce emissions by 31% compared to 2005 to 2030 levels, far less than the 88% reduction in the electricity sector, but still more than the 11% reduction in the transport sector.

“We need a comprehensive approach to climate action, but under this plan, some sectors – primarily oil and gas – will not give their fair share, allowing the burden to fall on workers, consumers and other industries,” said Caroline Brouillette, national policy manager. for Climate Action Network Canada.

(1 dollar = 1,2498 Canadian dollars)



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