With a target on its back, upbeat oil industry wants to help Canada reach its climate goals

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On the eve of the COP26United Nationsclimate conference, a level of unease across the Canadian oilpatchmight be expected. There are calls for countries around the world to wind down their oil and gas production as a critical step needed to slash emissions and address climate change.

The rapid wind-down of fossil fuels is needed, Environmental Defence's Julia Levin warnedlastweek, "in order to limit catastrophic levels of warming, save millions of livesand end harm to front-line communities."

But after several years of low commodity prices, many energy companies are enjoying a return to hefty profits. Oil and gasprices are at multi-year highs thoughthat's leading to calls for companies to earmark those funds to speed up their efforts to reduce emissions.

At the same time, the world is experiencing a shortage of fossil fuels as economies emerge from the pandemic a situation that'ssupporting the industry's argument that oil and natural gas, in particular, remain critical for everyday life.

In Canada, many in the oilpatch also see opportunity in using technology to drive down greenhouse gas emissions. They contend the sector can play a role in helping the country achieve its climate goals.

• Have questions aboutCOP26or climate science, policy or politics? Email us:ask@cbc.ca. Your input helps inform our coverage.

Considering that the oilsands represent about 11per cent of Canada's total emissions and the rest of the oilpatch produces about another 15per cent, the fossil fuel sector in Western Canada will likely play a critical role in determiningwhether the country reaches its 2030 climate goal.

Total CO2 emissions from the sector keep climbing as production is at a record high in Alberta.

The Conference of Parties (COP), as it's known, meets every year and is the global decision-making body set up to implement theUnited Nations Framework Convention on Climate Change, adopted in the early 1990s, and subsequent climate agreements.

To discuss the upcoming COP26 conference in Glasgow and the path ahead for the oilpatch, CBC News spoke withthreepeople who have worked with and in the industry:

• Martha Hall Findlay Suncor Energy's chief sustainability officer and a former Ontario Liberal MP
• Andy Mah CEO of Advantage Energy, an oil and gas producer in northern Alberta that owns a stake in Entropy, a carbon capture and sequestration firm.
• Gary Mar CEO of the Canada West Foundation, the former CEO of the Petroleum Services Association of Canadaand a former Alberta environment minister who attended COP5 as part of Canada's delegation.

The interview has been edited for length and clarity.

Q: COP26 is less thanone week away. Are you nervous?

Martha Hall Findlay: Nervous isn't it. I think, frankly, every opportunity that we collectively have to engage in discussions about how we're actually going to solve this big challenge of climate change is helpful. It isn't helpful if you just have the same people who have the same ideas all saying the same thing. It is really helpful when you get people who might actually be in a position to challenge. Sosome of the environmentalists challenging what we're doing in the oilsands; people from the oilsands challenging environmentalists by saying, 'Just wishing it were so isn't gonna make it happen.' So how can we be realistic? Let's actually try and work together collaboratively just as we've done in terms of pandemics and vaccines. I think we can use that as a real example. This is a huge global problem, too. So how do we take lessons from that collaboration and figure out the solution? So I'm hopeful, actually.

Andy Mah: I'd like to just add that as fossil fuel companies, we do acknowledge that we can be a significant contributor to a solution. The panic that we need to rid the world of fossil fuels immediatelyis not a simple answer. I truly believe the energy sector has the skill set that's needed to find the solutions here.

Gary Mar: It would be very difficult drafting the objectives of COP26 and what success looks like when we're butting up against a real energy crisis in Europe right now, as we speak. It'll be important to recognize that simply ridding the world of fossil fuels is not going to be the solution that gets us to where we want to be. And I would frame the question differently. There are some people who saythat the question should be: Should we have a hydrocarbon-free world?And that's the wrong question. I think that the better question is: What can we do to make this an emissions-free future?

WATCH|Should Canada get credit for reducing emissions elsewhere in the world?

Some energy advocates want Canada to export more natural gas to displace coal in foreign countries

3 years ago

Duration 5:40

The Canada West Foundation's Gary Mar, Suncor's Martha Hall Findlay, and Advantage Energy's Andy Mah discuss whether Canada should get credit for reducing emissions elsewhere in the world.

Q:How would you describe the interest in carbon capture and storage (CCS) right now in Alberta?

Mah:The larger firms are talking about these large mega-hubs, if you want to call them that. We would support that. But let's also allow smaller centres where we can, especially since the transport of CO2 can be costly. If we can have everybody pushing in the same direction, the more likely we're going to make traction here quickly. We just got to make sure that we have the support politically, the public, and then obviously I think the industries are there already.

Hall Findlay: One thing that we really need to keep clear is that capturing carbon and sequestering it isn't a money-making venture. It's not like pulling oil out of the ground or gas out of the ground and selling it. This is a cost.

Carbon pricing is something that Suncor has supported for over 20 years and helps the economics of this kind of effort. If you look at the oilsands' Pathways to Net Zero project, we have a foundational project, which is carbon capture use and storage. Alberta and under the North Sea happen to be the two areas in the world that have the best geology for carbon sequestration. There is the Quest project[in Alberta] and Boundary Dam in Saskatchewan, so in Canada, we know this stuff. We're very excited about Pathways, but I need to go back to the point about cost. CO2 is not for us a revenue-generating thing. And this is why when you look at the two other major CCUS[carbon capture, utilization and storage] projects globally in Europe, both are huge collaborations between the private sector and the government.

Can you imagine the Canadian oilsands going from being the bad boy of emissions to being net zero in our production and therefore being the world's preferred source of oil? I think that's an amazing story for Canada.

Q: Energy research firmWood Mackenzie is calling the oil price windfalla 'golden opportunity' to speed up decarbonization. Will the oilpatch be putting its sizable profits this year toward faster and deeper emission cuts?

Hall Findlay:Suncor has for decades been working at reducing emissions. Our emissions intensity per barrel, as an industry, has gone down 20 or 30 per cent. That's a lot. That didn't come for free. We understand the challenge. Also recall that during COVID, at one point we were at minus $26 US a barrelWTI. Our industry ended up racking up major debts, so now we're very busy paying down debt, which is hugely important. But we have investors who are not counting on multi-year high prices and are saying you need to be able to have economics support infrastructure. Are we looking at sustainable finance options? Yes, but we're a business. Our investors expect us to continue to be a successful financial business. Prices are high now, but we simply can't count on them. Are we looking at every alternative that we can to make this happen? Absolutely. Are we going to need massive collaboration, the way we see in Europe? Yes.

Mar: Back in 2005 through 2011, when I was at the Canadian Embassy in Washington, D.C., we would bring congressional delegations up to see the oilsands, but we always stopped at Boundary Dam [Power Station in Estevan, Sask.]so that they could see what CCS looked like. At the time, I think it was viewed as being a bit of a science experiment, but I think it's increasingly gotten credibility as this process has worked. I view this as a huge opportunity for developing, as I say, future-fit hydrocarbons in a way that we can keep the carbon in the ground and use the energy that is generated from it.

Mah:We do see now a few years of stronger pricing. What I see on the ground is a paradigm shift among a lot of the leadership teams in this town. Despite the fact that we may see some really strong profits in the companies, the dialogue around producing and reducing emissions is just as strong at the board tables. I've been in the business over 40 years, but when I started this would have been a conversation about 'let's go exploit and produce more.' Now the conversation is profitability and the second one is ESG-related [environmental, social and governance]matters, relative to environment and how can we do this better and cleaner.

Those conversations are not well understood by the public or the politicians that think we're a bunch of oil and gas people who just are greed, greed, greed. That's not the case. This COP26 could be very interesting if some of that conversation could come to the limelight.

Q: Pull out your crystal ball. It's 2030. Has Canada reached its climate goal? Are emissions down? What about production?

Mar: I'm optimistic. Whether we make targets depends a lot what the policies are that are agreed to and actually acted upon. What you don't want is a situation where when all is said and done, more is said than done. There actually has to be actions taken between now and 2030, but I believe that our production will be up. I believe our exports will be up in 2030 coming from Canada. And I believe that the emissions curve will be bent in a positive direction.

Mah: I agree with Gary in terms of the outputs from Canada. I believe our oil outputs will be higher. I believe our gas output will be higher, but I believe our emissions will be lower. And I think the industries themselves or companies will move toward that regardless of political support. Can we move towardtargets? It's ambitious by 2030. But if we come out of COP26 with just more extreme views oneither end of the climate debate, we're not going to get there.

Hall Findlay: My crystal ball says that Canadian oil and gas is the preferred oil and gas around the world, and that's because we will have addressed our emissions problem, so we will be net zero in our production of oil and gas. When we get there is interesting. Frankly, Canada as a government has not reduced our emissions, period. We have a reputation globally of saying we're going to do this and then we really haven't been able to do much. The oilsands are a really big part of that challenge. So if at this point now, we can actually achieve the collaboration that we are talking about with our Pathways to Net Zero projects and vision, this is an opportunity to actually get that done.

I have very high expectations and a lot of confidence, but it's going to take like vaccines, war, and famine, this is a global challenge, and it requires similar engagement by everybody in a really collaborative way.