A new analysis has concluded that Canada’s oil sands will have to cut production by up to 1.3 million barrels per day to meet the federal government’s 2030 emission targets, just as the International Energy Agency (IEA) reports a surge in clean energy investment and a faster-than-expected rise in key low-carbon technologies.
The study by U.S. data firm S&P Global says the production cut would reduce fossil industry employment by 5,400 to 9,500 jobs, the Globe and Mail reports. Those numbers echo a Clean Energy Canada study earlier this year that showed Canada losing 1.5 million fossil industry jobs but gaining 2.2 million clean energy positions by 2050, including a net gain of 95,000 in Alberta.
The S&P study finds that the Alberta oil sands can feasibly reduce its climate pollution by 15 million tonnes per year by the end of this decade, the Globe says, leaving a gap of 29 megatonnes to hit the federal target of reducing oil and gas sector emissions 42% below 2019 levels by 2030. “Plugging that gap would put at risk 800,000 to 1.3 million barrels of forecast production a day,” the Globe says.
Left to its own devices, S&P forecasts the industry would increase oil sands production by 34%, or a million barrels per day, between 2019 and 2040.
The report echoes the industry’s pitch to approach the 2030 federal target by 2035 using as-yet unproven carbon capture and storage technology, and by 2040 by relying on modular nuclear reactor technologies that have been described as “PowerPoint reactors”, since they’ve never been built, deployed, or proven in real life.
The oil sands industry and its allies in the Alberta government have long argued that Ottawa’s 2030 target “will threaten the province’s most important economic driver—and one of Canada’s,” the Globe writes. “Proponents counter that a failure to significantly hasten emissions reductions in the oil and gas sector puts at risk Canada’s ability to meet its climate commitments and limit the effects of climate change.”
The Pathways Alliance, whose six members account for 95% of the country’s oil sands production, maintains there’s no prospect of hitting the 2030 goal. The target “is simply not realistic given current technology, construction, and regulatory requirements,” Pathways President Kendall Dilling told the Globe. He warned that “impractical time frames for emissions reduction targets could drive investment away from our industry and our country, reducing production in Canada while increasing output and emissions in other countries.”
But it seems more likely that those investments are already on track to evaporate, independent of the regulations Canada’s government enacts or the messaging its fossil industry churns out. In its World Energy Investment 2023 report in late May, the Paris-based IEA reported a dramatic drop in investment in oil production, from US$636 to $371 billion, between 2013 and 2023. Although fossil fuel investment was expected to grow 6% this year, the $1.7 trillion going into clean energy amounted to $1.70 for every dollar spent on fossil fuels of any kind.
“Five years ago,” the agency wrote, “this ratio was 1:1.”
Those numbers put countries “in a significantly better place than we were a few years ago,” IEA Chief Energy Economist Tim Gould said at the time. “There’s still a very long way to go, but there are finally some encouraging signs for us all to welcome.”
In a new report issued last week, the IEA called for faster adoption of solar, electric vehicles, and heat pumps across more countries and more parts of the energy system to move the world closer to net-zero emissions by 2050. So far, the agency’s Tracking Clean Energy Progress report shows renewable energy accounting for 30% of global electricity supply, electric vehicle sales growing tenfold over five years to reach 10 million in 2022, and solar and EV battery manufacturing now on track to meet 2030 targets in the IEA’s net-zero scenario.
“The clean energy economy is rapidly taking shape,” said IEA Executive Director Fatih Birol. “Even faster progress is needed in most areas to meet international energy and climate goals,” but “the extraordinary growth of key technologies like solar and electric cars shows what is possible.”