Skip to main content
opinion

Thirty years ago, oil and gas accounted for 17 per cent of Canada’s greenhouse gas emissions. The industry was emerging from a tough period at the time, the low commodity prices of the 1980s.

Then came a multidecade boom. Canada transformed into a major global producer. Oil output – led by Alberta’s oil sands – tripled. Greenhouse gas emissions also surged and, as of the last official count in 2019, the oil and gas sector was responsible for more climate-heating gases than any other sector, at 26 per cent of Canada’s total.

As Canada and the world work toward large emissions cuts by 2030, as agreed to in the Paris Agreement, as well as toward the finish line of net zero-emissions in 2050, domestic oil and gas emissions obviously cannot continue to climb.

Many in the oil industry agree. In June, the five biggest oil sands companies announced their goal to reach net zero by 2050. Two weeks ago, the group outlined plans on how they could do it, including carbon capture and cleaner operations. This is the direction their investors are pushing for.

But while oil sands production gets lot of attention, it represents less than half of industry emissions. The majority comes from an array of sources: natural gas, conventional oil, pipelines, refineries. A broader plan is necessary.

How much we cut carbon emissions is less important than how we do so

Is carbon pricing Liberal policy? For the most part, it’s anything but

The federal Liberals, on the campaign trail during the late summer election, put one forward: Cap all oil and gas emissions at “current levels,” with reductions targets for 2025 and 2030, and net zero in 2050.

At the United Nations climate summit in Glasgow this week, Prime Minister Justin Trudeau re-announced the plan: “We’ll cap oil and gas sector emissions today and ensure they decrease tomorrow at a pace and scale needed to reach net zero by 2050.”

This was met with consternation in Alberta, as though it was a surprise and opposed by the oil industry. But that’s clearly not the case. A cap on emissions – rather than production – is in fact endorsed by industry.

A cap at current levels is also achievable, since it’s the industry’s recent reality. From 2014 to 2019, Canada’s oil and gas production jumped 17 per cent, while emissions inched up only 0.5 per cent.

There are moving parts in this equation – upstream emissions from producing oil and gas rose 2.2 per cent, while fugitive methane emissions (such as leaks from wells and pipes) fell 20 per cent – but the overall picture is promising.

The declining cap needs to be ambitious, however, in order to propel innovation. The oil sands producers aim to cut their emissions by one-third in the next nine years. For the industry as a whole, there is a big opportunity to further slash fugitive methane emissions – which still account for 19 per cent of the sector’s total, despite recent reductions.

There are also big challenges ahead, starting in British Columbia, where a liquefied natural gas export plant set to open in 2025 would itself push up the sector’s emissions by 1.8 per cent.

And there are still a lot of questions about how the cap will work, such as whether the limits will apply broadly to the sector, or specifically to a company or individual site. Mr. Trudeau acknowledged in Glasgow that imposing limits will be “no small task for an oil and gas producing country.”

Beyond the cap, the long-term picture for Canada, and the world, is of declining oil and gas production, thanks to lower demand.

In the United States – buyer of 80 per cent of Canada’s oil – transportation accounts for two-thirds of oil usage. As electric vehicles become standard, demand for oil will fall considerably. And natural gas faces competition from renewable power, such as wind and solar.

Oil and natural gas, however, remain very much in demand, as clearly evidenced by recent price spikes. So capping emissions from the sector, as planned by Ottawa and supported by industry, is a reasonable strategy – a balance between the energy needs of today and the necessity to turn the corner on greenhouse gas emissions.

The urgent need to combat climate heating was never more apparent than this year, with its forest fires, floods, drought and extreme temperatures.

Canada, for all its promises over decades, has not yet made a dent in its emissions. A big reason is oil and gas. But the sector is innovative and up to the challenge. Its emissions cannot rise further. A cap is the first step to change course.

Keep your Opinions sharp and informed. Get the Opinion newsletter. Sign up today.