Fossils Must Pull Their Weight, Cut Emissions 45% This Decade, Analysts Say

Canada’s long-awaited 2030 Emissions Reduction Plan (ERP) must set legally-binding limits for the oil and gas industry that are “coherent with national targets”, since “other sectors would be required to do even more for Canada to achieve its target” if fossils failed to pull their weight, the country’s Net-Zero Advisory Body said in its official advice to the government earlier this week.

With the ERP due for release next week, the NZAB report was part of a flurry of public feedback that included an expert panel Thursday convened by Climate Action Network-Canada, as well as a Pembina Institute backgrounder that showed how fossils could achieve a 45% emissions reduction from 2005 levels—even though their output of carbon and other greenhouse gas has steadily increased since then.

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In its submission [pdf], the Net-Zero Advisory Body laid out 40 recommendations covering buildings, transportation, oil and gas, and governance, with 13 of them devoted to the fossil sector. It noted that the International Energy Agency and even the Canada Energy Regulator are predicting lower demand for Canadian oil and gas to 2050, even if the world fails to hit a 1.5°C target for average global warming—although the CER projects rising oil output through 2032, prompting serious doubts about the Calgary-based regulator’s ability to embrace any kind of net-zero target.

“A common theme across all credible forecasts is that both domestic and global demand for oil and gas will decrease markedly over the next three decades,” the NZAB wrote. “The trend over time is for demand scenarios to be revised downward, particularly as policy and regulatory signals around the world increase in stringency.”

With that in mind, the NZAB called on Ottawa to:

• Use a “whole-of-economy lens” for the emissions reduction targets it sets for oil and gas to ensure fossils do their share;

• Set “clear boundary conditions” for the industry, with carbon removals and offsets used only as a last resort;

• Establish flexible targets across the industry to recognize differences between the 63% of fossil firms with fewer than five staff and the 1.2% that employ more than 500, with priority on the biggest sources of emissions;

• Set the targets quickly, announce them publicly, and implement them as soon as possible to deliver the “policy and regulatory certainty requested by the oil and gas sector and the investment community”;

• Make people and communities a priority, with work force planning and economic opportunity for communities that rely on fossil fuel employment.

The report called for early and urgent action, “shifting from the incremental approaches currently in place to a transformational approach,” to drive buildings sector emissions toward net-zero by 2050. In transportation, the NZAB looked to Ottawa to reduce internal combustion-driven trips, especially for personal transportation, while shifting to “zero-emission and more communal and active modes” and improving vehicle performance.

The Pembina Institute backgrounder put a minimum 45% emissions reduction in oil and gas by 2030 at the centre of the effort to bring the country as a whole to net-zero by 2050.

“As Canada’s single largest source of emissions, the oil and gas sector has the potential to make or break the country’s climate commitments,” wrote analysts Jan Gorski and Janetta McKenzie, in a summary of the eight-page report. “Despite successful efforts to reduce emissions intensity per barrel in the last decade, Canadian crude oil remains some of the most carbon intensive in the world, and the industry’s emissions have continued to increase at a time when greenhouse gases from other sectors have declined.”

To hit the 2030 target, Pembina estimated Canadian fossils would have to reduce their annual emissions by 103 million tonnes, from a threshold of 191 Mt in 2019. That’s because:

• Canada’s 2030 target calls for a 40 to 45% reduction from 2005 level.

• The country’s fossil sector emitted 160 million tonnes in that year, so a 45% reduction would bring the total down to 88 Mt.

• But even as they bragged about their emission reductions per barrel of oil produced, while furiously lobbying governments to delay climate action, fossils increased extraction enough to drive their emissions up to 191 megatonnes in 2019.

• That means they’ll have a steeper hill to climb to fulfill their responsibilities in a crucial decade for climate action.

The Pembina backgrounder showed how they can get it done, with methane reductions delivering the equivalent of 33 megatonnes of carbon savings per year. Other lead options included electrification of fossil facilities, at 18 Mt, carbon capture and storage at 15 Mt, and a collection of other tar sands/oil sands measures at 14 Mt.

Beyond the need to hit national and global climate targets, Pembina said the industry’s own economic interests are tied to its climate performance.

“These emissions reductions are now crucial for the sector to remain competitive in an evolving global marketplace in which investors are placing increasing value on climate credentials,” the Calgary-based institute stated. “The war in Ukraine has added to this pressure, as it is reasonable to expect countries will respond to the crisis by expediting their moves away from fossil fuels.”

But “even prior to the war, credible agencies—including from within the oil and gas industry—were suggesting that global demand for oil and gas will start to decline before 2030.”

At yesterday’s media briefing, CAN-Rac noted that Canada has never met an emissions reduction target, but cast the Emissions Reduction Plan as a chance to improve its record. The country is in an “unprecedented and ambitious moment”, said Ecojustice staff lawyer Julia Croome, with the Canadian Net-Zero Emissions Accountability Act enshrining national targets in law and requiring the government “to set about meeting those targets with immediate ambition, transparency, and accountability.”

Croome said it will be essential for the ERP to show how the country is on a 2030 pathway and lend itself to independent analysis and accountability, with targets and measures designed so that “anyone can pick apart the plan” and assess the government’s progress.

It must also set an interim emissions reduction target for 2026 that puts the country on track for 2030, and at least acknowledge serious data gaps that make it difficult or impossible to track progress.

Unifor National Representative Ken Bondy said workers in fossil fuels, transportation, auto manufacturing, and forestry would be watching next week’s announcement closely, knowing that their industries will be affected by an emissions reduction plan done wrong.

“The important thing is to remember as we look to reduce our carbon footprint is that we can’t simply reduce workers,” Bondy said. “Workers matter, and workers deserve to maintain safe jobs.”

So “if workers are not involved in these discussions you are not doing this properly, because you’re not going to get the support of the Canadian people.”

He pointed to the commitment to a Clean Jobs Training Centre in the new Supply and Confidence Agreement between the federal Liberals and NDP as an initiative that will support skilled trades and academic development for low-carbon jobs.