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Climate disaster survivors urge emissions cap that energy CEOs call unnecessary

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The CEOs and executives of some of Canada’s largest oil and gas companies defended their industry Thursday, the same day a group of Canadians personally affected by climate change called on the federal government to implement its proposed cap on emissions from the oil and gas sector.

CEOs and senior executives from Cenovus Energy Inc., Enbridge Inc., Imperial Oil Ltd., Shell Canada Ltd. and Suncor Energy Inc. appeared by videoconference Thursday afternoon before the House of Commons standing committee on environment and sustainable development.

The executives said while they oppose an emissions cap on their sector, they do support carbon pricing as a tool to reduce their industry’s environmental impact.

“My view is the (proposed) emissions cap is unnecessary regulation,” said Suncor CEO Rich Kruger.

“I do support a coordinated price of carbon across the economy, because I believe that will drive the innovation and the economic incentives on all of our parts to continue to improve our business.”

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“A carbon tax can work to reduce emissions, but it has to be universally and ubiquitously applied, and it can’t target one particular industry or one particular segment of the economy,” said Cenovus CEO Jon McKenzie.

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Alberta chambers, energy industry pushes back on oil and gas emissions cap

The CEOs’ appearance was the result of an April motion by NDP environment critic Laurel Collins, who called on the executives to explain what their companies are doing to address climate change.

One after another Thursday, the executives spoke of their goal to reduce emissions while also increasing Canada’s oil output in the years to come.

“Every credible study shows that we will continue to need all forms of energy, including oil, to help meet the world’s growing energy demand,” said McKenzie.

“That oil will be produced somewhere, and it should be produced in Canada, where we have some of the strongest regulations and industry-leading ESG performance.”

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Just hours before Thursday’s meeting, a group of Canadians personally affected by climate change called on the federal government to implement its proposed cap on emissions from the oil and gas sector. The small group of individuals spoke to reporters at a press conference on Parliament Hill organized by Climate Action Network.

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The group included a woman who lost her Kelowna, B.C. home in last year’s wildfires, a woman from Merritt, B.C. who lived through severe flooding in 2021, and a man from Tuktoyaktuk, N.W.T., who is concerned about the threat posed by rising sea levels to his Arctic community.

“I came to Ottawa to share my story because I think climate change is not an abstract concept,” said Meghan Fandrich, a resident of Lytton, B.C., which is slowly starting to rebuild after more than 90 per cent of the village was destroyed in a 2021 wildfire. “It is not something that will affect us someday … it is ongoing.

“We need to do what we can, and one step we could take that would have a phenomenal effect is putting a really firm cap on carbon emissions.”

Scientists from the European Union’s earth monitoring arm Copernicus reported this week that last month was the warmest May ever recorded globally, with an average temperature 1.52 C higher than the pre-industrial average.

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The oil and gas sector is Canada’s largest source of greenhouse gas emissions, accounting for almost a third of the country’s total emissions, and they continue to rise, largely because of increased production from Alberta’s oilsands.

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The federal government has proposed a legislated cap on emissions from the oil and gas sector, something the industry opposes.

Under a proposed framework released last December, the government has suggested a cap that would require the sector to cut greenhouse gas emissions by 35 to 38 per cent from 2019 levels by 2030. The sector would also have the option to buy offset credits or contribute to a decarbonization fund that would lower that requirement to just 20 to 23 per cent.

The government has said the cap is intended to limit pollution, not oil and gas output, but the oil and gas sector has said the targets are too stringent and would result in companies cutting production.

The proposed emissions cap is also staunchly opposed by the province of Alberta, and business groups such as the Calgary Chamber of Commerce.

The oil and gas sector has said that rather than a legislated cap, it needs federal and provincial support to help it accomplish its own emissions-reduction plans. A group of oilsands companies — including Imperial, Cenovus and Suncor, all of whom are slated to testify Thursday — have jointly committed to getting to net-zero emissions by 2050.

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The oilsands companies, which call themselves the Pathways Alliance, have proposed spending $16.5-billion on a massive carbon capture and storage network for northern Alberta. But the group has not yet made a final investment decision, saying more certainty about the level of government support and funding for the project is required.

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Collins, the NDP MP, repeatedly asked the executives at Thursday’s committee meeting to explain why their companies aren’t moving faster to decarbonize. She said Canadians are concerned about the growing number of extreme weather events such as wildfire, drought and “heat domes” as the climate warms.

Some Canadian oil and gas companies made record profits in 2022 as commodity prices soared in the wake of Russia’s invasion of Ukraine, and the industry continues to generate healthy cash flows this year. Collins said companies can and should do more to mitigate the impact of the fossil fuel sector on the climate.

“We need an excess profit tax (on the oil and gas sector) to invest in climate solutions,” Collins told reporters.

Clean energy think-tank the Pembina Institute said federal and provincial measures to support emissions-reducing investments — such as industrial carbon pricing and announced federal tax credits — are generous, even compared with some of the incentives that exist in the U.S.

In an email Thursday morning, Pembina’s oil and gas program director MC Bouchard said it’s urgent that companies take action.

“Today’s hearing is another reminder that additional regulation is needed to make sure those promised investments and projects finally start to move forward,” she said.

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