Oil Sands Players Align for 'Net-Zero' Push

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Canadian companies that provide around 90% of the country’s carbon-intensive oil sands production have formed an alliance to work together to eliminate net greenhouse gas (GHG) emissions from their facilities by 2050. The five firms -- Canadian Natural Resources, Cenovus Energy, Imperial Oil, Meg Energy and Suncor Energy -- say they aim to work with the federal and Alberta governments to get their GHG emissions down and in line with Canada’s larger climate goals, including "net-zero" emissions by midcentury. Wednesday’s announcement represents a strong message from Canada’s largest oil companies that they are on board with the country’s commitment to go carbon-neutral and have at least thought through scenarios that will enable them to achieve that goal. While specific details were scarce -- particularly around project costs and financing strategies -- the alliance shows these companies are willing to throw their political and economic weight behind the push to decarbonize. "These plans reflect a reality that they are now coming to accept," says Chris Severson-Baker, the Alberta director for the Pembina Institute think tank. Carbon Capture and More The centerpiece of the companies’ plan is building a CO2 trunkline that would link several oil sands facilities and connect them to a carbon sequestration hub near Cold Lake. The trunkline would also be made available to other industries in the region interested in capturing and sequestering carbon emissions. The companies plan to deploy other emissions-reducing technologies as well, including clean hydrogen, fuel switching and electrification. They will also evaluate and potentially pilot emerging technologies such as direct air capture and small modular nuclear reactors. However, the companies were clear that they will need the support of the provincial and federal governments if they are to fully decarbonize. "It is essential for governments to develop enabling policies, fiscal programs and regulations to provide certainty for this type of long-term, large-scale investment," they said. "This includes dependable access to carbon sequestration rights, emissions reduction credits and ongoing investment tax credits." Pressure on the Province Severson-Baker told Energy Intelligence that the new alliance could put more pressure on the Alberta government to fall in line with federal efforts to slow climate change. Alberta’s current right-leaning government has found itself at odds with Ottawa’s efforts under Liberal Prime Minister Justin Trudeau to reduce emissions through carbon pricing and other measures (OD Apr.19'21). The Alberta government is "hearing it from all sides right now, obviously from the federal government and environmental groups, but they’re hearing about it from the companies themselves, investors, and the finance community in general," said Severson-Baker. "But they haven’t sold their base on this idea [that] the path to prosperity for Alberta depends on proactively addressing climate change." Regulatory certainty is a key requirement for these companies to move ahead with these sizable investments, he added. Such investments won’t be viable if there is a risk that federal or provincial policies could abruptly change course after the next election, scheduled for May 2023. "By all coming together and committing to go down this track, they are partly contributing to reducing policy uncertainty going forward in their own right," Severson-Baker said. "It signals that they’re not going to be resisting as much as they have done in the past, which has helped to increase policy uncertainty." Luke Johnson, Houston

Carbon Capture (CCS), Low-Carbon Policy, Corporate Strategy
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