Irshadgul News report,
Canadian oil and gas companies are not using their record profits to invest in decarbonization and are instead pursuing share repurchases and dividend payments, according to a new analysis by the Pembina Institute, a renewable energy think tank.
In June last year, Canada’s five largest oil producers – Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy and Suncor Energy – announced that they were creating the Oil Sands Pathway for the Net Zero Alliance, which aims to be net-zero. To get a greenhouse. Gas emissions from Oilsands operations by 2050.
The organization was later rebranded as the Pathway Alliance, and ConocoPhillips Canada was added to its ranks. It has set a target of achieving an annual reduction of 22 million tonnes by 2030 for the oil sector.
Jan Gorsky, program director for oil and gas at the Pembina Institute, said the goal of the report, which was released Friday, since its formation was to “examine the differences between the words and functions of the pathway.”
“We’re at a place right now where the industry is seeing record profits. There are steps they can take right now to reduce emissions,” Gorsky said.
Despite this, the Pembina Institute stated that most of the details of the Pathways Alliance members’ decarbonization plans remain unknown. Since the group was formed, the institute stated that no significant decarbonization investment decisions have been taken by its members.
Pathway Alliance president Kendall Dilling wrote in a statement that the group is making progress as quickly as possible with its emissions reduction plans while pursuing economic and regulatory certainty from governments.
Such certainty would prepare companies to invest billions of dollars in capital between now and 2030 and beyond, he said.
“It is unrealistic to expect the Pembina Institute that Pathway Alliance companies make final investment decisions on these multibillion-dollar projects before governments have finalized the regulatory framework to support them,” Dilling wrote.
Gorsky said he believes carbon capture and utilization projects take a long time. But other projects, such as energy efficiency projects, can be pursued faster.
According to the Pembina Institute, in 2022, Canadian oil and gas companies’ free cashflow is projected to reach $152 billion – the highest level ever.
The report, released Friday, examines the Pathway Alliance’s public decarbonization pledges and compares them with the actions each company is currently taking on decarbonization.
For example, the report cites Cenovus’ announcement that it will invest $1 billion in emissions reduction over the next five years, but it has not announced any related project details to date. This year, Cenovus spent the same amount repurchasing shares over a 90-day period. A Cenovas spokesperson declined comment on the Pathways Alliance report.
Dilling cited various works currently underway with the Pathway Alliance, including an application submitted to the Government of Alberta for underground storage space for a proposal to build one of the “world’s largest” CCS projects. The results of that competition are expected in October.
“We are confident that continued collaboration with governments will enable a financial and policy framework that is essential for our industry to make the final investment decisions,” Dilling said.
“However, doing so prematurely without that framework would put climate goals, jobs, investments and energy security at significant risk.”
carbon capture progress
The report also suggests that jurisdictions that no longer sharply reduce emissions could be left out in the cold, should the long-term outlook be accurate, that oil demand will decline by 2030.
“The market for oil production will become a lot more competitive,” Gorsky said. “And that competition will be determined not only by cost, but also by carbon intensity. So by acting fast, these companies can better position themselves to compete in that future.”
Richard Mason, an executive fellow at the University of Calgary School of Public Policy and president of the World Petroleum Council, argued that companies are still returning profits to shareholders because they have nothing concrete to invest in yet.
“I think companies in Canada, driven by shareholders, investors, other stakeholders, are really serious about trying to reduce their carbon footprint, and the technologies available to do that through carbon capture,” he said. Told.
“So I expect we’re going to see a lot of progress here over the next few years, once we get some momentum.”