Minister of Environment and Climate Change Steven Guilbeault rises during Question Period in the House of Commons on Parliament Hill in Ottawa on Tuesday, Nov. 28, 2023. Guilbeault says two recent court decisions striking down some federal environment policies delayed plans to implement a cap on emissions from oil and gas production.THE CANADIAN PRESS/Justin Tang (The Canadian Press)
Canada’s oil sector could be on a collision course, with production forecast to rise as the federal government lays out a plan to clamp down on emissions, according to DBRS Morningstar.
The latest plan was unveiled by federal ministers via webcast from Ottawa and Dubai, where Canada is participating in the annual UN climate summit. The government says the regulations have yet to be finalized, and could go into effect in 2026.
On Tuesday, U.S.-based credit ratings agency DBRS Morningstar weighed in, calling the regulations “very ambitious, with only seven years left to meet the targets.”
Adding to the challenge, analysts predict Canada’s oil output will climb by 15 per cent over 2019 levels, once two major projects are operational.
“[It’s] more daunting given that oil production will likely grow over the next few years. The offshore Newfoundland Bay du Nord light crude oil project is projected to come onstream in the middle of this decade, targeting international crude markets. In addition, the completion of the Trans Mountain Expansion Project, expected in 2024, will provide another outlet for oil and gas companies in Western Canada to export more oil,” analysts led by Ravikanth Rai wrote in research published Tuesday.
Canadian oil production is set to climb to an all-time high next year of about 5.3 million bpd by the end of 2024, according to S&P Global Commodity Insights. The agency says that amounts to a roughly 10 per cent increase, or about half a million barrels.
Canadian Association of Petroleum Producers president and CEO Lisa Baiton says the industry has “proven it can increase production, and take the carbon out.”
“We’ve done that in the absence of having our feet held to the fire,” she added at an event in Toronto last month.
Mounting skepticism
DBRS says carbon capture and storage technology will have to play a major role if the industry is to come “even remotely close” to the new federal framework’s targets.
“However, CCUS projects are untested at the scale required to meet the targets, and none of the proposed projects are close to being finalized for development,” the analysts wrote, adding to recent skepticism about the technology.
DBRS adds that the announcement of the federal emissions cap framework has no immediate impact on the credit ratings of Canadian oil and gas producers.
“Investment-grade Canadian oil and gas companies rated by DBRS Morningstar have significantly strengthened their balance sheets over the last two years, and will be addressing the emission reduction challenge from a position of financial strength,” the analysts wrote.
“Smaller oil and gas companies, which lack the economies of scale to make large decarbonization initiatives feasible, may find it more challenging, and we could see additional consolidation in the industry as a consequence.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
ST. JOHN’S, N.L. – Suncor Energy has been fined $90,000 after pleading guilty to two charges stemming from a worker injury in 2019 aboard its production vessel in an oilfield off the coast of Newfoundland.
In a news release Thursday, the province’s offshore oil regular said the company must also give $20,000 to the College of the North Atlantic’s health and safety management program.
The Canada-Newfoundland and Labrador Offshore Petroleum Board says Calgary-based Suncor pleaded guilty on Sept. 5 for failing to ensure the safety of its employees and failing to ensure its employees wore a safety harness attached to a lifeline while inside a confined space.
The board says a worker fell 7.6 metres from a safety ladder while testing for hydrogen sulfide in a ballast tank on the floating production and storage vessel in the Terra Nova offshore oilfield.
An agreed statement of facts says two emergency response workers then went into the tank to tend to the fallen man, and they were not wearing gas masks.
Suncor Energy is the majority owner of the Terra Nova oilfield, and it reported net earnings of $1.57 billion in the second quarter of this year.
This report by The Canadian Press was first published Sept. 17, 2024.
Toronto-Dominion Bank has named new co-heads of its U.S. commercial banking business.
TD says Andy Bregenzer and Jill Gateman will jointly lead the operations.
The bank says the appointments follow the announcement earlier this year of Chris Giamo’s retirement.
Bregenzer will focus on leading all aspects of the regional commercial bank, including small business.
Gateman will lead TD’s national commercial banking effort in the U.S., including middle market, sponsor-backed finance and TD’s other specialty lending lines of business.
TD, which is working to resolve investigations into failures in its anti-money laundering program in the U.S., announced last week that chief executive Bharat Masrani would retire next year and be replaced by Raymond Chun.
This report by The Canadian Press was first published Sept. 26, 2024.
MONTREAL – Lightspeed Commerce Inc. says it is conducting a review of its business and operations including talks relating to a range of potential strategic alternatives.
The Montreal-based payments technology company made the comments after reports concerning a potential transaction involving the company.
Lightspeed says it periodically undertakes a review of its business and operations with a view of realizing its full potential.
A strategic review is often seen by investors as a prelude to a sale by a company.
Lightspeed says its board of directors is committed to acting in the best interests of the company and its stakeholders.
Company founder Dax Dasilva returned to the role of chief executive officer earlier this year and has been working to return the company to profitability.
This report by The Canadian Press was first published Sept. 26, 2024.
