WASHINGTON — Alberta Premier Jason Kenney and oil sands industry executives are in the U.S. capital as part of a new initiative to rehabilitate Canada’s fossil fuel public image.
At the heart of their efforts is the Pathways Alliance, a coalition of oil sands producers – originally dubbed the Oil Sands Pathway to Net Zero Alliance – with an ambitious and costly plan to capture and store all of the world’s greenhouse gas emissions. industry by 2050.
So-called “in situ” producers, who today represent the bulk of oil sands production, inject steam into the ground to liquefy the bitumen, which facilitates its extraction. Emissions are a byproduct of burning natural gas to generate steam.
The alliance is proposing a multi-billion dollar carbon capture and storage system that would collect these emissions from more than 20 oil sands facilities, transporting and storing them deep in the porous soil and rock of the Canadian prairies.
That’s the long-term goal, with the goal of capturing 20 million tons of emissions per year by 2030. The immediate goal is to convince the world, starting with lawmakers on Capitol Hill, that the tar sands can be part of the solution to climate change. instead of part of the problem.
“Right now we have a label that says Canada has dirty oil,” said Rhona DelFrari, director of sustainability at Cenovus Energy, one of six Canadian producers that make up the alliance, representing 95% of all oil sands production.
“We want to completely erase that label and have people around the world say, ‘Canada produces oil like the rest of the world should produce oil.'”
It won’t come cheap: DelFrari said the industry expects a final tab of about $2.5 billion a year by 2050, including about $20 billion to meet that initial storage goal or eliminating 20 million tonnes of emissions by 2030.
And the companies have already indicated that they will not foot the bill alone.
Cenovus CEO Alex Pourbaix told analysts in April that the federal government’s new round of tax credits for carbon capture projects simply won’t be enough to provide the kind of long-term stability needed to appease nervous investors.
The oil and gas industry is cyclical enough as is, not to mention the added political and social uncertainty that now seems to be part and parcel of fossil fuel infrastructure projects like pipelines and refineries, proponents say.
“Our companies will not be able to move forward with these types of multi-billion dollar projects unless there is a partnership with governments,” DelFrari said.
“Canadians have said they want Canada to tackle climate change and they want a strong economy. To achieve these two things, the Pathways Alliance and the partnerships between the private sector and the government must come to fruition.
This is despite an earnings season filled with eye-popping earnings.
Suncor reported quarterly profits of $2.95 billion, down from $821 million in the first quarter of 2021. Cenovus earned $1.6 billion in the same period, up from $220 million last year . And a 68% increase in revenue helped MEG Energy Inc. post cash flow and $362 million in quarterly profit.
But federal and provincial governments are also beneficiaries of a healthy oil field and stand to gain from a field that can reduce emissions while still producing energy, said Mark Cameron, vice president and Senior Alliance Advisor.
“The two alternatives are really, you can invest in technology to reduce emissions, or you can impose production cuts. But that means less royalties, less jobs, less taxes, less of all those things,” he said.
“If all is sticks and no carrots, eventually there will be less and less industry in the long run.”
Kenney, just six weeks away from his rare in-person appearance before the US Senate Energy and Natural Resources Committee, is back in town to participate in some of the meetings, including a roundtable hosted by the Wilson Center on Thursday. .
This event will also include Pourbaix, ConocoPhillips Canada President Bijan Agarwal and Imperial Oil President and CEO Brad Corson, among a host of other senior oil sands executives.
For too long, Cameron said, the industry has allowed outsiders and critics to provide a one-sided perspective on the Canadian oil sands industry without contradicting its own narrative, including in the United States.
“It’s a long game. I think not having a presence in Washington, New York, California and other places in the United States has been detrimental to our industry, because we have not told our own story ” , Cameron said.
“The story was told to us by people who present a one-sided view, or an inaccurate view, or a 10-year-old view, not what is actually happening.”
This report from The Canadian Press was first published on June 22, 2022.
JOIN THE CONVERSATION