Cenovus CEO says oilsands dialogue ‘myopically focused on the climate agenda’

Andy Cepuch, senior field manager, at the plant—where steam is created, water is processed, and bitumen is diluted and prepared to go for further processing—at the Cenovus Christina Lake oilsands facility southeast of Fort McMurray, Alta., on Wednesday April, 24, 2024. THE CANADIAN PRESS/Amber Bracken

CALGARY — The chief executive at Cenovus Energy Inc. says the national dialogue around future oilsands development has been “myopically focused on the climate agenda” a day after a coalition of green groups lamented the “unhelpful feedback loop” that’s taken root around pipeline development and environmental regulations. 

“The result of this myopic dialogue... is that we have created a set of national policies and regulations that make resource development and investment in Canada uncompetitive with the rest of the world,” Jon McKenzie told analysts on a conference call Wednesday to discuss first-quarter results, which included an 83 per cent profit increase.

Recent geopolitical turmoil has underscored how important energy security is to national and economic security, presenting an opportunity to Canadians “if they choose to seize it,” he said. McKenzie said the debate has “ignored the multitude of benefits” oilsands development brings to Canada. 

A sweeping energy accord signed in November between Alberta and Ottawa outlines a path toward a new oilsands pipeline to the West Coast, which would enable greater exports of Canadian crude to Asia. That pipeline would be built in tandem with a multi-billion dollar carbon capture and storage project in Alberta being developed by the Oil Sands Alliance, formerly the Pathways Alliance. 

No private sector player has stepped forward to build the pipeline, but the Alberta government is preparing to file a regulatory application in the coming months. 

The memorandum of understanding also includes an increase in the industrial carbon price in Alberta from the current $95 a tonne level — though credits trade for far lower currently — to an effective price of $130 a tonne.

McKenzie and others in the industry have been arguing an increased carbon price on the sector would render it uncompetitive. The Oil Sands Alliance — a group of the five biggest oilsands producers, including Cenovus — said in a statement earlier this week that the levy would “limit our industry’s ability to attract investment and grow.”

An analysis from the Canadian Climate Institute has pegged the per-barrel hit from the increase at an average of 50 cents — about the cost of a Timbit.

Agreements on the implementation of the carbon price and funding for the carbon capture project have blown past the Alberta and federal governments’ self-imposed April 1 deadline.

The Globe and Mail, citing unidentified provincial and federal sources, reported Wednesday that the speed at which the price would be raised is the main sticking point, but that they’re making headway toward an agreement. 

Six climate advocacy groups wrote a letter to Prime Minister Mark Carney on Tuesday expressing concern that key planks of the MOU remain unresolved. 

They said Canada is stuck in “an unhelpful feedback loop of discourse” around the need for a new pipeline and the loosening of environmental regulations on the energy sector. They cited the increase in the effective carbon price as the most important element of the MOU and suggested the target be reached by 2030. They added that tens of billions of dollars in low-carbon investment hang in the balance. 

Meanwhile, on the Cenovus conference call, McKenzie said the MOU may have set out a path for a new pipeline to be built, but it fails to include policies that would incent greater oilsands production to fill it. 

The Alberta government has said the new pipeline could carry one million barrels of crude a day.

Cenovus has been able to grow its production through acquisitions — like its purchase of MEG Energy last year — and by squeezing more barrels out of existing operations. But in order to grow output enough to fill a new pipeline, the industry is going to have to take on all-new from-scratch projects, McKenzie said. 

“Greenfield development comes at a higher cost and a higher break-even than the growth that you’ve seen to date,” he said. 

While McKenzie and the Oil Sands Alliance blame the drying up in new greenfield investment over the past decade to government policy, clean-energy think tank Pembina Institute said oil sector investment worldwide has never returned to the levels it saw before the 2014 price collapse. 

Earlier Wednesday, Cenovus raised its base dividend by 10 per cent to 22 cents per share as it reported an 83 per cent jump in profits. 

The quarterly dividend of 22 cents per share is resilient at a US$45 West Texas Intermediate crude oil price, Cenovus said. The commodity is trading for more than double that currently. 

Net earnings were $1.57 billion, or 83 cents per share, up from $859 million, or 47 cents per share, a year earlier. 

Revenue totalled $12.36 billion, down from $13.30 billion a year earlier.

Total upstream production was 972,100 barrels of oil equivalent per day, up from 818,900 in the first quarter of 2025. 

Downstream crude throughput was 458,500 barrels per day, down from 665,400 a year earlier.

This report by The Canadian Press was first published May 6, 2026.

Lauren Krugel, The Canadian Press.

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