Canada’s five big tar sands/oil sands companies are raising eyebrows with their plan to form an Oil Sands Pathways to Net Zero alliance aimed at cutting their greenhouse gas emissions by 2050 without reducing their actual oil production.

The five companies—Canadian Natural Resources, Cenovus Energy, Imperial Oil, MEG Energy, and Suncor Energy—”said they will work with the Canadian government and the provincial government of Alberta to roll out technologies that will enable them to cut emissions from their extraction and production process,” writes Climate Home News. “But they made no mention of phasing out production,” and “the ‘net-zero’ strategy does not extend to emissions from consumers burning the oil, which are many times larger than those from the extraction process.”

The Scope 3 emissions that occur when a shipment of oil reaches its final destination and is used as directed account for about 80% of the product’s life cycle carbon pollution. Earlier this year, when fossil giant ExxonMobil had to disclose its Scope 3 emissions, they added up to 730 million tonnes of carbon dioxide or equivalent in 2019.

Exxon subsidiary Imperial Oil is one of the five companies joining the new alliance. Together, they account for about 90% of Canada’s bitumen production, Climate Home states.

While Thomson Reuters says the companies are “generating billions more in free cash flow in a faster-than-expected pandemic rebound,” the expectation is that they’ll be hunting for federal and provincial subsidies to fund the transition they have in mind. Their release says they want to “develop an actionable approach” to reduce their emissions while “preserving the more than C$3 trillion” they claim their industry will contribute to the Canadian economy through 2050.

In March, Alberta Premier Jason Kenney issued an apparently serious call for a 10-year, $30-billion carbon capture, utilization and storage (CCUS) subsidy in this year’s federal budget.

With last week’s announcement, “a large part of their strategy includes building a carbon sequestration facility in Cold Lake, AB,” The Canadian Press reports. “The group says the facility would be available for other industries to use as well, and could possibly connect to Edmonton for use by businesses there in the future.”

Reuters says the companies “will also tap into emerging emissions-reducing technologies including direct air capture and small modular nuclear reactors, among others.”

“This collaborative effort amongst oilsands peers shows our serious commitment to global climate leadership,” said Cenovus CEO Alex Pourbaix. “We are doing more than just talking about the need to play a role—we are taking bold action to address our emissions challenge and earn our spot as the supplier of choice to meet the world’s growing demand for energy.”

“This better positions our country to attract financial capital to fuel growth, meet the growing demand for sustainable energy sources around the world and here at home, as well as play a lead role in advancing carbon capture, utilization, and storage (CCUS) technology,” added CIBC CEO Victor Dodig.

“Every credible energy forecast indicates that oil will be a major contributor to the energy mix in the decades ahead and even beyond 2050,” added Alberta Energy Minister and former pipeline executive Sonya Savage, conveniently sidestepping last month’s International Energy Agency projection that showed the precise opposite. 

“Alberta is uniquely positioned and ready to meet that demand,” Savage said. “This initiative will also pave the way for continued technological advancements, ultimately leading to the production of net-zero barrels of oil.”

Climate campaigners with their hands on the actual data on emissions and carbon budgets were decidedly more realistic in their assessments of the plan.

“This kind of greenwash is worse than meaningless—it’s dangerous,” Alex Doukas, senior consultant at the Denmark-based KR Foundation, told Climate Home. “It fails to cover emissions associated with the tar sands products themselves. Nobody should cheer this nonsense.”

“These plans lack the one and only action that is most vital to cutting emissions: cutting dirty oil and gas production,” agreed Oil Change International campaigner Laurie van der Burg. “If the Canadian tar sands net-zero alliance cared about climate action it would have committed to cut production by 2030.”

The Pembina Institute’s Alberta regional director, Chris Severson-Baker, said the alliance announcement was short on details but still marked the first time all five companies had committed to absolute emission reductions, rather than shifts in emissions intensity that would be offset as their production increased. “Given where we’re coming from just a few years ago, with all the oilsands producers talking about expansion plans and needing more pipelines, that’s a big change,” he told The Energy Mix.

Severson-Baker said the companies’ action reflected the Alberta government’s failure to “make climate policy more stable and predictable” by committing to emission reduction targets for 2030 and 2050.

“The companies are doing what they’re doing because they need to attract a lot of investment for industrial decarbonization,” he explained. “They’re already facing a decline in demand in the future as a result of climate policy, but they’re also not going to be carbon-competitive in short order if they don’t take measures to address their carbon intensity.” So one of the things they need to attract investment “is clear corporate messages that they aren’t out of step with where the world is going with climate change.” 

Even so, Severson-Baker said a carbon reduction plan for 2030 or 2050 will necessarily include phasing out some existing production.

“The way you’re going to get some of these reductions by the middle and certainly the end of this time period is that the high-cost, high-carbon sources of oil will simply stop producing,” he said. “The graph will be like a staircase, just like it was with electricity when units would come off the grid and there’d be a step down. There will be some reductions from the sources that somehow it makes sense economically to operate for the next 20 or 30 years, and other sources that just step down at some point from an emissions perspective because they go offline.”

In the wake of the fossils’ announcement last week, “the thing we’re going to have to wait for now is the tough discussion that needs to happen about what it makes sense to invest in decarbonizing, and what should we just simply wind down, what does that step-down graph look like, and whether it gets us where we need to be by 2030, by 2040, by 2050.”

Steven Bryant, a professor of chemical and petroleum engineering at the University of Calgary, told CP the new coalition is in a good position to tap into carbon sequestration as a proven option. “This does not require some exotic technology, what it requires is getting together and building stuff fast,” he said. “We know what to do, we just need to go out and do it.”

That rosy assessment stands in stark contrast to analysis last month that pointed to carbon capture as an expensive option that consistently misses its production targets. That was after the federal budget set aside $319 million over seven years for CCUS research, development, and demonstration.

“My view is that it’s good to do a couple of these projects on gas and ‘blue’ hydrogen to test the technology, to see whether it works. to see whether it makes financial sense,” David Schlissel, director of resource planning at the Institute for Energy Economics and Financial Analysis (IEEFA), told The Energy Mix at the time. “And if it doesn’t, then don’t do it.”

In recent years, analysis by IEEFA and others has raised serious questions about CCUS projects’ poor potential and failure to thrive in Italy, Texas, Mississippi, and elsewhere, leading to serious questions about whether it makes sense to add the cost of CCS to fossil projects when renewable energy and battery storage costs are falling fast—and energy efficiency is still the cheapest option of all.

While “I’m in favour of doing a couple of prototypes,” Schlissel said last month, “it’s crazy to give money to a lot of projects when you don’t have a tested technology, and when you’ve got alternatives like wind, solar, increasingly battery storage, and energy efficiency that can do a large part, if not all of the job.”