Canada’s National Observer columnist Max Fawcett’s recent piece on the Trudeau Liberals’ discussion paper for a proposed oil and gas emissions cap drew some interesting comments from industry on the difficulty of meeting the government’s targets. Fawcett summarizes, “They can’t afford to reduce their emissions as quickly as the federal government would like — and might not be able to do it at all.”
Of course, that was clear right from the start when the federal government’s recent much-ballyhooed 2030 Emissions Reduction Plan assumed a 31 per cent reduction from 2005 levels for the oil and gas sector by 2030. That required a reduction of almost 45 per cent in just eight years from today (in pre-pandemic 2019, we were 19 per cent above the 2005 level).
Who would think that was possible? I’d suggest nobody, including the government. But to meet our PM’s latest COP26 promises, that’s the kind of number that was necessary for the arithmetic to work.
A close reading of the discussion paper on the oil and gas emissions cap also raises a fundamental question about the future of Canada’s refining industry, a subsector of oil and gas that doesn’t get much attention. Refining makes up 10 per cent of our national oil and gas sector’s GHG emissions, the paper points out. And it raises questions about whether the cap on emissions will apply to refining as well as actual oil and gas production.
If refineries are included, this could spark some companies to shut down a refinery to avoid dealing with the difficulties of having to reduce greenhouse gas emissions from oilsands production. So a refinery in Ontario or Quebec could be sacrificed to avoid dealing with oilsands emissions, a much harder venture. Suncor and Imperial Oil would be perfectly poised to do just that because they have large bitumen mining operations and also own refineries in Eastern Canada.