Oil CEO says too much government talking, not enough action, putting climate targets in jeopardy

An oil company CEO says federal and provincial governments are stuck on "academic discussions" about greenhouse gasemissions targets, putting timelines for their own goals in jeopardy.

Derek Evans, the head of Calgary-based MEG Energy, told CBC Radio's The House the lack of concrete details on climate policies are interfering with the chronology for decarbonization.

"The whole 2030 timeline, what we said we thought we could do by 2030, that starts to get risked," he said, adding the dialogue has been productive but lacking action.

Ottawa is crafting policies that would put legislative pressure on the sector to decarbonize more quickly, including an impending emissions cap and killing "inefficient" fossil fuel subsidies. An announcement on the latter is expected next week, but specifics have been scarce for years.

Canada has committed to net-zero by 2050, with an interim goal that would require oil and gas to cut 42 per cent of its greenhouse gas emissions below 2019 levels by 2030.

Both levels of government are feuding over 2030 targets, though they agree on the end date of 2050. Both are providing support to industry in the form of funding and tax credits, but disagree on the methods to reach a carbon-neutral economy.

"We are going to lose the next generation"

"We will lose not only the opportunity to decarbonize, we are going to lose the next generation in terms of their belief in are we actually doing what's right for the environment," Evans said.

His daughter often presses him about his work, he said, and whether oil companies are serious when it comes to climate change.

Industry titans, including MEG's partners in the Pathways Alliance that represents 95 per cent of oilsands production, have told the federal government getting to the 42-per-cent reduction goal is unrealistic by the end of the decade (In fact, they say it would take an extra five years to get there at the current pace).

The oilsands produce about 70 million tonnes of emissions annually, according to the Alberta government about 11 per cent of Canada's total pollution output.

"At some point, if you are serious about decarbonizing the oilsands for a variety of reasons, we need to see some progress towards that," said Andrew Leach, a professor and energy and environment economist at the University of Alberta.

"But I think also if the government is not going to recognize, for example, enhanced oil recovery as a means of carbon capture and sequestration, industry needs to know that before they can decide where to put their money."

Policies underway, but industry lacks details

The federal government has announced billions in clean energy incentives and tax credits for things like carbon capture and storage. That's what the industry wants clarity on. Alberta has also committed about $2 billion into carbon capture, utilization and storage (CCUS) and approved 25 proposals for carbon storage hubs.

CCUS technology traps and stores pollution from production underground. Despite political and industry buzz, it hasn't been proven at a massive scale yet and remains relatively expensive.

Canadian oil and gas companies are hoping to lead the world in its development, but that's becoming a steep task as U.S. measures like the Inflation Reduction Act provide historical investments for green tech.

Canada has been floating decarbonization and carbon capture for 30 years (early mentions appear in a 1994 report on climate to the United Nations).

"We are ready to go. We are waiting for the governments to collectively get at the table and join us and push this across the line. In my personal perspective, this is the single biggest imperative that we as people in the oil and gas business and as stewards of the land and the economy for the next generation, we absolutely need to make this happen as quickly as we can," Evans said.

Record profits prompt questions about investment

Oil companies are also coming off the most lucrative year they've ever seen.

At a timewhen there's money available, companies have been criticized for not investing more of their record profits into clean technology development or accelerating their commitments to existing options.

Advancing without government direction and support and out of step with other countries like Norway would kill the competitiveness of Canadian oil, Evans said.

"I think we would just ultimately say it's probably cheaper for us to pay the carbon tax and not abate the carbon. And then we have lost on two fronts: We have lost a global leadership opportunity and we have not abated an iota of CO2."

A recent report commissioned by an environmental group concluded it would be significantly cheaper to meet reduction targets for greenhouse gases than it would be to pay carbon taxes on it.

Leach said the path forward depends on whether decisions are influenced more by politics or by global market and environmental factors.

That question rests largely with the industry.

"Is decarbonizing the oilsands something that has to happen for the future of the industry or is it something that has to happen so long as the current Liberal government makes it a priority," he said.

Evans remains optimistic the governments and companies can find a path forward.

"I have never heard a federal official tell me that they want to see production shut in and clearly the premier doesn't either. So with those basics, I feel we're going to be able to thread the needle here."