Nia Williams

CALGARY (Reuters) – Canada’s first emission reduction plan relies heavily upon the oil and natural gas industry to assist Ottawa in reaching its 2030 climate goals. However, there are still significant gaps between what government and industry believe is possible cuts.

Canada’s most polluting sector is oil and gas, which accounts for 26% total emissions. Liberal Prime Minister Justin Trudeau must make significant cuts to the oil-and gas industry if he is going to reach his climate goal of cutting overall emissions by between 40 and 45% below 2005 levels by 2030.

Canada has not met any of its emissions reduction goals. Between 2005 and 2019, oil and gas polluting has increased 19%. Canada’s Emissions Reduction Plan was announced Tuesday. It aims to reduce oil and natural gas emissions by 42% compared with current levels by 2030.

Suncor Energy’s Chief Executive Mark Little stated that while ambition is one thing and action what is required is another. He spoke at a Vancouver sustainability conference on Tuesday.

Suncor is part of the Oil Sands Pathway Alliance which is a consortium of six Canadian oil-and gas companies. It aims to achieve a 32% reduction in emissions by 2030. Their alliance is responsible for 90 percent of Alberta’s oil-sands production and they aim to reduce emissions net zero by 2050.

“The Pathways Alliance made it clear that our interim goals must be flexible and realistic. They are achievable,” Kendall Dilling said, the interim director of the organization.

Liberal governments have had an uneasy relationship with oil and gas industries since 2015 when they came to power. The Liberal government is now developing an oil-sands emissions limit, just like the promise made in the last election.

Trudeau claimed that the oil and natural gas industry leaders recognized the importance of getting to net zero by 2050.

Trudeau said that the ERP releases were consistent with plans that he had outlined.

LIFE IS FINANCIALLY HEAVY

Ottawa will rely on just a few levers in order to cut oil and gas emissions. This includes cutting methane output, new technologies, and carbon capture-and-storage (CCS), according to Dave Sawyer principal economist at The Canadian Climate Institute.

CCS is a process of permanently trapping and sequestering underground emissions. This costly procedure has been demanded by the oil and natural gas industry. Ottawa will announce the CCS tax credit next week, after months of negotiation.

Sawyer stated that the job of industry is to reduce costs and shift risk to shareholders. Therefore, there are discussions about subsidizing emission reductions.

Even though cashflows have risen due to the rising oil price and Russia’s invasion in Ukraine, this is not a surprise.

Deborah Yedlin (chief executive of Calgary Chamber of Commerce), a lobbying group for businesses in the middle of the oil patches, stated that the high commodity prices would likely be temporary and that climate targets will need to be met faster.

Yedlin stated that “Industry will require government investment technology via public-private partnerships.”

Many environmental activists have criticised oil and gas for not doing their fair share. This sector will reduce emissions by 31% by 2030 from 2005 levels, which is less than 88% in the electricity sector, but more than 11% for transportation.

“We need an all-hands-on-deck-approach to climate action, but according to this plan, some sectors – most notably oil and gas – will not contribute their fair share, letting the burden fall on workers, consumers, and other industries,” said Caroline Brouillette, national policy manager for Climate Action Network.

($1 = 1.2498 Canadian dollars)