It’s a 4,000-kilometre drive from Calgary, which hosted the World Petroleum Congress this week, to New York, where the United Nations held a Climate Ambition Summit. The metaphorical distance between the two gatherings seems closer to infinite.
At the oil congress, while the theme was the path to net zero, the emphasis was on oil. The CEO of Exxon said it was “wishful thinking that we’re going to flip the switch” to clean energy. At the climate summit, the focus was lack of progress. “Climate action is dwarfed by the scale of the challenge,” said UN Secretary-General António Guterres. He pointed blame at oil producers.
Both views are true. It’s a fact that the world will not instantly end its long dependence on the fossil fuels responsible for alarming and increasing levels of climate change. No serious person suggests such. It’s also a fact that oil producers have long sought to slow the shift away from fossil fuels.
The most important fact is this: while the world remains dependent on fossil fuels, rapid change is possible and necessary. That was the conclusion of a UN report in early September. Ambition and actions “must be accelerated.”
The International Energy Agency, which for decades focused on oil, has mapped out a road to net zero: cutting oil usage by three-quarters by 2050 and natural gas by half. This month, the IEA predicted the “cusp of a historic turning point,” with the burning of fossil fuels set to peak within the next few years.
Tension between oil and climate action is felt everywhere but especially so in a country like Canada, one of the leading producers of fossil fuels but also one where climate policies are escalating. There may also be a bridge in Canada – illustrated by the ambitions of the federal government and the pledges of Canadian Natural Resources, the largest oil and gas producer.
In 2022, Ottawa detailed its plan to cut at least 40 per cent of greenhouse gas emissions by 2030, including from fossil fuel production, as part of the Paris Agreement. Ottawa is expected to soon release details of a proposed emissions cap on the fossil fuel industry. No numbers have been offered but Alberta – both the United Conservative Party and the Opposition NDP – has rejected the feasibility of a 40-per-cent cut from fossil fuels emissions by 2030.
Yet take a look at Canadian Natural Resources. Last November, citing support from the federal and Alberta governments (both are readying billions of dollars in subsidies for carbon capture technology), the company announced its target to cut emissions by 40 per cent, by 2035.
That’s close to what Ottawa is talking about. The bluster of public debate often makes the divide sound like an unbridgeable canyon. The reality is there is a lot of common ground. Public policy to reduce methane has spurred Canadian Natural to nearly halve such emissions from 2018 to 2022. It has helped reduce the company’s total emissions by 3 per cent, from a peak in 2020.
Much more has to happen, soon. Natural Resources Minister Jonathan Wilkinson, in a recent meeting with The Globe’s editorial board, said Ottawa is working to ensure its rules are realistic – things that “can actually be done” – and are meant to “ensure the work is done.”
Oil companies have to be pushed. The industrial carbon tax, for one example, should be stricter. Suncor estimates its carbon costs at just $1.70 a barrel from now through the early 2030s. And ambitions in the oil business vary. Suncor aims to cut its emissions by about 20 per cent by 2030. Cenovus aims for 35 per cent by 2035. Imperial Oil doesn’t publish a near-term goal for its total emissions. Meanwhile, the companies are booking near-record profits, while major investments in emissions are still pending.
There is one last big fact. What the oil companies do matters and they deserve attention. But what everyone else does matters just as much. About 80 per cent of the emissions from oil comes from burning the product, whether driving, flying or otherwise. It can’t be free to pollute from the tailpipe of one’s own car, while railing against oil companies. The UN warning this month of lack of progress on climate called for “an all-of-society approach.”
The gulf between oil and climate appears vast but the divide is less than it seems. As Ottawa and Canadian Natural are showing, there is common ground. It is there major progress can be made.