Going ‘Net-Zero’ Will Boost Oil Sands Production, Industry Tells Canadian Government

Mar 6, 2023

‘That would be a death knell for our climate targets,’ says climate advocate.

Oil sands producers plan to spend billions of dollars on emissions-reducing technologies so that they can boost production and sell more of their climate-warming products overseas, an industry lobby group explained to Canada’s federal government on multiple occasions. 

“As our sector decarbonizes, we believe that the oil sands can play an even bigger role in producing energy for Canada and the world,” said the Pathways Alliance, an organization representing the six largest oil sands producers, in a submission last fall during consultations over the federal government’s 2023 budget. 

The Pathways Alliance suggested it’s not concerned about the market for oil shrinking as governments around the world move more aggressively to fight climate change because it will outcompete other countries’ oil industries and keep on expanding.  

“If Canadian oil sands can reduce its carbon intensity below other global sources of oil, we believe Canada should seek to increase its market share for responsibly produced, lower emissions energy, even if global market demand, as a whole, begins to decline,” it said in the submission. 

The Pathways Alliance also made this point to the House of Commons Standing Committee on Environment and Sustainable Development — that its efforts to achieve “net-zero” emissions in the oil sands by 2050, whereby the climate impact of the industry’s operations is eliminated or neutralized, are part of an oil and gas growth strategy.

“We need to keep in mind that this is about reducing emissions and not reducing production,” said the organization last year in a separate submission. 

“Every time they’re talking about decarbonization, there’s a push behind that to increase the oil and gas supply,” said Sofia Basheer, an analyst with the London-based organization InfluenceMap, which included the above documents in a new report about Canadian oil and gas producers. “It’s incompatible with Canada’s climate goals.”

The Pathways Alliance, which didn’t respond to questions from DeSmog, is comprised of the companies Suncor, Imperial, MEG Energy, Canadian Natural, Cenovus and ConocoPhillips Canada, representing 95 percent of oil sands production. It is a registered lobby group that has met with Canadian government officials nearly 200 times since 2019, according to federal records.  

The Pathways Alliance is also a marketing organization for the industry, paying recently for a full-page advertisement on the cover of the Toronto Star claiming that “we’re making clear strides to net-zero.” 

It claims on its website that by deploying technologies that capture carbon and bury it underground the industry “will meaningfully reduce greenhouse gas emissions from oil sands operations by 22 million tonnes per year by 2030.” 

The bill for this first phase of the net-zero plan is expected to be $16.5 billion. And the Pathways Alliance wants taxpayer money to cover much of that. It’s pushing the Canadian and Alberta governments to contribute roughly $10.9 billion. So far the feds have announced a tax credit worth $2.6 billion.

Yet despite these expensive climate promises, oil sands production is forecast to rise by 500,000 barrels per day within the next decade, according to a report last year from S&P Global Commodity Insights. Another organization known as Enverus Intelligence Research estimates that production could actually grow by 1.2 million barrels per day during that time period. 

“That would be a death knell for our climate targets,” Tzeporah Berman, International Program Director at the organization Stand.Earth, told DeSmog. 

That’s because 80 percent of the greenhouse emissions associated with a barrel of oil sands crude come from actually burning it in a vehicle engine, and those climate impacts aren’t covered under the Pathways Alliance net-zero plan. Oil sands producers are only aiming to cut emissions from the operations that pull oil out of the ground. 

The difference between those emissions sources is substantial. Suncor estimated in its Climate Change 2022 submission to the Carbon Disclosure Project that burning the gasoline, diesel and other petroleum products it produces released 123 million tonnes of emissions into the atmosphere in 2020. Its operations meanwhile produced 21.5 million tonnes. 

That’s why organizations such as the International Energy Agency say that if we want to avoid the worst consequences of global temperature rise there must be “no new oil and gas fields approved for development.”  

“Every major international body that has looked at the science has explicitly said that any growth of oil production is inconsistent with net-zero,” Berman said. “Every day that we delay reducing production hurts more people.”

[Top photo: Senior executives from Suncor and other oil sands producers appear in a recent Pathways Alliance ad. Source: PathwaysAlliance.ca]