Oil and gas industry update
Sign up for myFT Daily Digest and be the first to learn about oil and gas industry news.
A supporter of the proposal stated that the Canadian government should pay up to 70% of the cost of a proposed 75 billion Canadian dollar (60 billion U.S. dollars) project that aims to decarbonize and decarbonize the country’s controversial oil sands. Protect the key engine of the country’s economy.
Alex Pourbaix, CEO of Cenovus Energy, the country’s second-largest oil producer, said: “If we can solve the problem of significantly reducing the carbon intensity of Canadian oil,” this oil will be the “cleanest in the world” Financial Times .
But Justin Trudeau’s Liberal government promised last year that Canada will reduce emissions by 40% to 45% by 2030 from 2005 levels, and he believes that a price must be paid to achieve this goal.
“It will take tens of billions of dollars in 30 years to achieve decarbonization [our oil] Industry,” Pourbaix said. “But at the same time, this will protect things in the $3 trillion GDP range. “
Pourbaix and the industrial organization Canadian Petroleum Producers Association (Capp) also urged the federal government to provide tax credits to oil companies that will use the captured carbon to produce more oil.
Calls for federal funding will complicate Trudeau’s problems because some criticize Canada for not acting fast enough to meet its climate goals, while his government defends its high-emission petroleum industry, the largest oil exporter in the United States. .
Despite the aggressive carbon tax system, the federal government is still lobbying for the controversial Keystone XL pipeline from Alberta to Texas, which was cancelled by US President Joe Biden earlier this year – And is funding the development of another export pipeline from the oil sands to the west coast of Canada.
“Our prosperity and our economy are still highly dependent on” the oil sector, Seamus O’Regan, the country’s Minister of Freedom and Federal Resources, said in a recent report. Interview by the British “Financial Times”“This is what we did.”
Last month, Cenovus joined the other four largest producers in the Canadian oil and gas industry-the largest single contributor to the country’s greenhouse gas emissions, and proposed a huge carbon capture, utilization and storage (CCUS) project. They Said this is the “only realistic proposal” to curb pollution.
Critics of CCUS say that the technology that has been mentioned for many years as an emission solution is still too expensive to reach the required scale.
Pourbaix said this shows that operators are now “adapted to the direction of the world.”
This proposal This includes installing a trunk line to collect carbon from oil sands projects and other industries near Fort McMurray in northern Alberta and storing it further south near Cold Lake.
The proposal came at a time when the Canadian government raised an investment tax credit aimed at accelerating the development of the domestic CCUS industry. Credits will start next year.
Pourbaix urged the federal government to withdraw a decision to exclude enhanced oil recovery (a method of reinjecting captured carbon dioxide to help produce more oil) from the tax incentive program, and stated that EOR could enable the CCUS project economy to “go out” Dilemma”.
Capp’s CEO Tim McMillan welcomed the federal government’s attention to CCUS to help achieve its emissions targets, but said that “excluding EOR from the federal program will pose a major challenge for the government to achieve this goal” .
A spokesperson for the O’Regan office stated that CCUS is “one of many technologies that will enable us to achieve net zero emissions by 2050”, but did not say whether the federal government will help pay for the oil sands company’s proposed project. The government has allocated US$319 million for research on CCUS and is developing a new strategy to promote it.
The oil sands industry is recovering from last year’s crash. But operators continue to face opposition from climate activists and environmentally minded investors because of higher emissions associated with the production of heavy asphalt oils found in northern Alberta and Saskatchewan.
International oil giants such as Shell, TotalEnergies and Equinor have withdrawn investments from the region, which has the world’s third largest oil reserves.
The Alberta government actively strives to protect the sector, including the recently failed Legal challenge Stop levying federal carbon taxes.
Pourbaix stated that he supports the new carbon pricing plan and his company has “long-term ambitions” to achieve net zero emissions from its operations. But like other oil sands operators, Cenovus will not commit to its so-called Scope 3 emissions net-zero target-the pollution caused by the combustion of the products it sells.
“Scope 3 is primarily the responsibility of consumers,” Pourbaix said. “It doesn’t make sense to exempt consumers from responsibility for this.”