Cleaner Canadian energy
Companies in Canada’s oil sands are working harder than other major global oil producers to reduce emissions in the fight against climate change, according to research by BMO Capital Markets.
The evidence is their track record reducing emissions per barrel, and their joint commitment to absolute emissions reductions in the future.
“Canada, at least among the major oil and gas producing countries in the world, is doing more than most to actually abate their emissions,” says Jared Dziuba, analyst with BMO Capital Markets.
In Canada’s oil sands, where two-thirds of the country’s oil is produced, average emissions per barrel decreased by 27 per cent since 2013, BMO reports. At the same time, other major oil producers around the world reduced intensity by just 13 per cent.
Put another way, BMO estimates that since 2013 the average oil sands barrel has shaved off more than 22 kilograms of emissions, compared to just five kilograms per barrel for other major global oil producers.
Several oil sands projects now have emissions per barrel lower than the global average, analysts report.
The Government of Canada acknowledges the success in its latest submission to the United Nations Framework Convention on Climate Change.
Oil sands emissions intensity “declined steadily” from 91 kilograms of CO2 equivalent per barrel in 2005 to 80 kilograms of CO2 equivalent per barrel in 2019, Canada reports.
Analysts with IHS Markit tracking a wider set of emissions also report the trend of decreasing intensity. Average oil sands emissions per barrel fell by 20 per cent between 2009 and 2018, IHS said in August 2020.
BMO analysts expect a further emissions intensity reduction of up to 30 per cent over the next decade just from technologies that exist and are ready to deploy.
Looking at the longer term, oil sands companies representing 90 per cent of the industry’s production have jointly committed to reach net zero emissions by 2050, meaning that any emissions from production will be balanced by emissions removed from the atmosphere.
IHS Markit vice-president Kevin Birn says the challenge now will be for oil sands producers to accelerate work to reduce greenhouse gas emissions as other major producers around the world put more focus in this area.
“I think the space around decarbonization in oil and gas is only starting, and it’s going to get red hot in terms of competition,” he says.
Photo courtesy Cenovus Energy