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Oil and gas CEOs testify before House of Commons environment committee

A truck passes the Enbridge Cheecham Terminal, an oil storage terminal, southeast of Fort McMurray, Alta. on Tuesday, April 23, 2024. (Amber Bracken / The Canadian Press) A truck passes the Enbridge Cheecham Terminal, an oil storage terminal, southeast of Fort McMurray, Alta. on Tuesday, April 23, 2024. (Amber Bracken / The Canadian Press)

CEOs and executives of some of Canada's largest oil and gas companies defended their industry Thursday, the same day a group of Canadians personally affected by climate change called on the federal government to implement its proposed cap on emissions from the oil and gas sector.

CEOs and senior executives from Cenovus Energy Inc., Enbridge Inc., Imperial Oil Ltd., Shell Canada Ltd. and Suncor Energy Inc. appeared by videoconference Thursday afternoon before the House of Commons standing committee on environment and sustainable development.

Their appearance was the result of an April motion by NDP environment critic Laurel Collins, who called on the executives to explain what their companies are doing to address climate change.

One after another Thursday, the executives spoke of their goal to reduce emissions while also increasing Canada's oil output in the years to come.

"Every credible study shows that we will continue to need all forms of energy, including oil, to help meet the world's growing energy demand," said Cenovus CEO Jon McKenzie.

"That oil will be produced somewhere, and it should be produced in Canada, where we have some of the strongest regulations and industry-leading ESG performance."

"The world will not consume one less barrel of oil, simply because Canada chooses not to provide it," said Suncor CEO Rich Kruger, adding he believes the oil and gas sector can help tackle climate change but that investing in emissions-reducing technology requires supportive government policy and regulations.

Just hours before, a small group of individuals spoke to reporters at a press conference on Parliament Hill organized by Climate Action Network.

The group included a woman who lost her Kelowna, B.C. home in last year's wildfires, a woman from Merritt, B.C. who lived through severe flooding in 2021, and a man from Tuktoyaktuk, N.W.T., who is concerned about the threat posed by rising sea levels to his Arctic community.

"I came to Ottawa to share my story because I think climate change is not an abstract concept," said Meghan Fandrich, a resident of Lytton, B.C., which is slowly starting to rebuild after more than 90 per cent of the village was destroyed in a 2021 wildfire. "It is not something that will affect us someday ... it is ongoing. 

"We need to do what we can, and one step we could take that would have a phenomenal effect is putting a really firm cap on carbon emissions."

The oil and gas sector is Canada’s largest source of greenhouse gas emissions, accounting for almost a third of the country's total emissions, and they continue to rise, largely because of increased production from Alberta's oilsands.

The federal government has proposed a legislated cap on emissions from the oil and gas sector, something the industry opposes. 

On Thursday, Collins said Canadians are concerned about the growing number of extreme weather events such as wildfire, drought and "heat domes" as the climate warms. 

Some Canadian oil and gas companies made record profits in 2022 as commodity prices soared in the wake of Russia's invasion of Ukraine, and the industry continues to generate healthy cash flows this year. Collins said companies can and should do more to mitigate the impact of the fossil fuel sector on the climate.

"We need an excess profit tax (on the oil and gas sector) to invest in climate solutions," she told reporters.

Collins also called on the Liberal government not to delay or weaken its promised cap on emissions from the oil and gas sector. 

Under a proposed framework released last December, the government has suggested a cap that would require the sector to cut greenhouse gas emissions by 35 to 38 per cent from 2019 levels by 2030. The sector would also have the option to buy offset credits or contribute to a decarbonization fund that would lower that requirement to cutting just 20 to 23 per cent.

The government has said the cap is intended to limit pollution, not oil and gas output, but the oil and gas sector has said the targets are too stringent and would result in companies cutting production.

The proposed emissions cap is also staunchly opposed by the province of Alberta, and business groups such as the Calgary Chamber of Commerce.

The oil and gas sector has said rather than a legislated cap, it needs federal and provincial support to help it accomplish its own emissions-reduction plans. A group of oilsands companies — including Imperial, Cenovus and Suncor, all of whom are slated to testify Thursday — have jointly committed to getting to net-zero emissions by 2050.

The oilsands companies, which call themselves the Pathways Alliance, have proposed spending $16.5-billion on a massive carbon capture and storage network for northern Alberta. But the group has not yet made a final investment decision, saying more certainty about the level of government support and funding for the project is required.

Clean energy think-tank the Pembina Institute said Thursday that federal and provincial measures to support emissions-reducing investments — such as industrial carbon pricing and announced federal tax credits — are generous, even compared with some of the incentives that exist in the U.S.

In an email Thursday morning, Pembina's oil and gas program director MC Bouchard said it's urgent that companies take action.

"Today's hearing is another reminder that additional regulation is needed to make sure those promised investments and projects finally start to move forward," she said.

This report by The Canadian Press was first published June 6, 2024.




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