Despite their loud promises to bring their greenhouse gas emissions to net-zero by 2050, eight of Canada’s biggest fossil producers cannot be trusted to manage their operations consistent with a 1.5°C limit on average global warming, says a report issued today by Oil Change International and Environmental Defence Canada alongside 15 other Canadian climate groups
The report includes a chart that shows the eight companies—Cenovus Energy, Suncor Enegy, Canadian Natural Resources Ltd (CNRL), Tourmaline Oil, ExxonMobil and its Canadian affiliate Imperial Oil, ARC Resources, Shell Canada, and Ovintiv—failing on virtually every measure of climate ambition, integrity, and transition planning. It finds that none of them are on track for emissions reductions aligned with the 1.5°C limit.
- The climate news you need. Subscribe now to our engaging new weekly digest.
- You’ll receive exclusive, never-before-seen-content, distilled and delivered to your inbox every weekend.
- The Weekender: Succinct, solutions-focused, and designed with the discerning reader in mind.
Instead, they plan to maintain or expand production, resulting in a 25% increase in associated annual carbon emissions from 2020 to 2030. That’s the time span in which Ottawa is promising to reduce greenhouse gas emissions across the economy by 40 to 45% from 2005 levels.
Fossil fuels currently account for about 26% of Canada’s emissions.
“This research shows that all eight major Canadian companies studied are amongst the worst worldwide, despite all their rhetoric about net-zero,” said David Tong, global industrial campaign manager at Oil Change. The groups concludes that Canadian governments should stop hailing big oil and gas corporations as partners in climate action and instead use the levers available to them to ensure a phaseout of oil and gas production by 2050.
Further at odds with Big Oil’s claims of climate leadership was its negative reaction to Prime Minister Justin Trudeau’s pledge at COP 26 Monday to cap fossil fuel emissions at 2020 levels, as promised in the federal Liberals’ election campaign over the summer.
Industry pushback—including calling the commitment to cap emissions “reckless” and “dangerous”—comes at a moment when there is no time for dawdling. The report cites the UN’s 2020 Production Gap Report (find a summary of the 2021 edition here), which concluded that annual oil and gas production should decline by four and three per cent respectively during this decade.
The report uses a ten-point framework drawn from the 2020 Big Oil Reality Check for assessing industry claims about their climate commitments and action. Criteria include an end to exploration and new extraction projects, production declines by 2030, inclusion of downstream emissions by end users, an end to obstructionist lobbying and public campaigns, and a financial commitment to a just transition for employees and hard hit communities.
To be credible, corporations must commit to an “explicit end date for oil and gas production.”
The report systematically addresses weaknesses in the industry’s net-zero claims, with a once around the kitchen examination of half-truths, distractions, irrelevancies, outright misrepresentations, and hypocrisy.
It warns that corporate climate action claims focus narrowly on upstream emissions during extraction, while neglecting emissions from end use consumption, which account for 85% of the carbon pollution in a barrel of oil. Only Suncor and Shell acknowledge downstream emissions, and they don’t address them sufficiently, the report says.
Industry climate claims rely heavily on carbon sequestration. However, carbon dioxide removal technology is unproven at scale, the International Panel on Climate Change has concluded, and efforts to scale it up are likely to encounter serious barriers. That means a credible commitment to emissions reduction cannot be based on technologies that may not meet standards of technical and economic feasibility, and environmental and social acceptability, including respect for Indigenous rights. Currently, the report notes, most captured carbon is used to facilitate enhanced oil recovery, which boosts production from depleted oil fields.
Offsets involve the purchase of carbon credits from emissions reduction outside the corporation. However, the supply of affordable offsets globally will be limited, and they cannot be relied upon to meet targets.
“On a finite planet, the math clearly does not work when most fossil fuel companies are looking to buy emission reductions elsewhere rather than undertake an energy transition away from fossil fuels to virtually eliminate the full scope of their emissions,” the report states.
Fossil gas (natural gas) is “not low-carbon or clean,” and is not expected to be cost-competitive with renewable power sources, the report adds. Fossil-based hydrogen (blue hydrogen) uses fossil gas feedstock, and is not expected to be cost-competitive with green hydrogen from renewables-powered electrolysis beyond 2030. (Or sooner, if natural gas prices remain high.)
Corporate investments in renewables are positive, but they’re no substitute for emissions reductions at source, Oil Change and Environmental Defence say. And carbon intensity reductions do not necessarily lower what really matters: the absolute levels of emissions.
A “net-zero by 2050” pledge is credible if developed with integrity and transparency. Otherwise, the report warns that it is “meaningless greenwash.” It says Canada’s big oil and gas corporations all fail to meet standards of integrity and transparency with plans that include downstream emissions, interim targets, tracking and reporting, and a reliance on credible solutions.
And while corporations make claims of climate leadership, their industry association, the Canadian Association of Petroleum Producers, continues to engage in extensive lobbying and public relations campaigns designed to weaken rather than strengthen climate action. The industry continues to advocate for growth rather than a reduction in fossil extraction.
Meanwhile, industry players expect Canadian taxpayers to fund their inadequate climate solutions. Referring to a plan focused on the tar sands/oil sands, “the CEOs of Suncor and Cenovus told the media that up to two-thirds of the C$75 billion price tag for the net-zero strategy would come from taxpayers. What happens if governments or citizens that elect them balk at the expectation of $50 billion in public money to address one fraction of the oil sands emission problem?”
[Energy Mix readers came up with some great ideas when we asked them how much decarbonization a $50-billion federal investment could buy—Ed.]
Despite industry outrage at Prime Minister Justin Trudeau commitment to an emissions cap, climate groups are concerned the government’s focus on emissions rather than production provides wiggle room for the industry to put forward “false solutions” like carbon capture and fossil-based hydrogen.
Alberta Premier Jason Kenney endorsed carbon capture and blue hydrogen as alternatives to cuts in production: “‘Yes’ to investments in carbon capture technologies: ‘no’ to any policy aimed at keeping Alberta oil ‘in the ground’,” Kenney said this week. The embattled Alberta premier also reiterated the calls for federal subsidies for carbon capture and storage, The Canadian Press reports.
With the irony no doubt unintended, Whitecap Resources CEO Grant Fagerheim criticized the federal government for setting climate targets it doesn’t know how to achieve. “Setting out virtue signalling commitments with no real firm targets is dangerous, and it’s reckless,” he said.
