The oil sands sector remains under pressure despite silence after the greenwashing law: think tank Achi-News

Canada’s oil sands industry remains under pressure to reduce its greenhouse gas footprint, even as companies halt public communications in the wake of new anti-greening legislation.

The Pathways Alliance—a consortium of six companies jointly committed to achieving zero-net greenhouse gas emissions from oil sands production—has been largely silent since June, when the federal government passed an amendment to the Competition Act Canada which includes a new anti-greening provision. .

But clean energy think tank the Pembina Foundation said concerns about the new law shouldn’t stop Pathways from pulling the trigger on its proposed $16.5 billion carbon capture and storage project.

“(The greenwashing legislation) doesn’t prevent things like issuing final investment decisions on carbon capture projects or emissions reduction projects,” said Matt Dreis, the think tank’s senior oil and gas analyst.

“If we want to be leaders in that sector, we’re going to need to get projects like this across the finish line.”

It’s been three years since the Trails Alliance proposed building a massive carbon capture and storage network in northern Alberta to help reduce emissions from oil sands sites. Although it has submitted a number of regulatory applications, the consortium has yet to give the project an official green light in the form of a final investment decision.

The industry group has also removed almost all of its content from its website after passing new greenwashing rules, which require corporations to provide evidence to support their environmental claims.

The wording of the measure says that businesses must not make claims to the public about what they are doing to protect the environment or mitigate the effects of climate change unless those claims are based on “adequate confirmation and appropriate in accordance with an internationally recognized methodology.”

In an emailed statement this week, Pathways Alliance president Kendall Dilling said the group continues to pursue its major project and is working with federal and provincial governments “to determine the most appropriate way to enable major investments in large projects like ours.”

“The new law does not change the intent of Pathways Alliance or the work we do,” said Dilling.

“However, the changes to the Competition Act make it more difficult to discuss our work publicly, due to the ambiguity of the law.”

A newly released survey by ATB Capital Markets found that 53 percent of oil and gas producers surveyed said the new anti-greening rules in the Competition Act will have a “major impact” on their company’s environmental reporting practices.

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The survey — carried out between August 28 and September 9 — also found a significant reduction in the willingness of energy companies to invest in environmental technologies based on the ESG mandate over the next year. Only 17 percent of respondents reported intentions to invest, down from 34 percent in the spring 2024 survey.

Dreis said the lack of a final investment decision so far from the Pathways Alliance is concerning given that the oil sands industry is the heaviest leaking sector in Canada and that carbon capture and storage projects are already underway elsewhere.

In June, Shell approved two projects that will capture and store carbon emissions from its Scotford refinery near Edmonton. In July, Strathcona Resources announced a partnership with the Canadian Growth Fund that will see the federal entity contribute up to $2 billion in funding for the company’s carbon capture projects in Cold Lake and Lloydminster.

Shell and Strathcona’s announcements came after the federal government finalized an investment tax credit for carbon capture and storage projects, something that heavy emitters such as the Pathways group had lobbied heavily for. But Dreis said it’s clear now that the tax credit alone isn’t enough to force widespread industry action.

“We were hoping to see more announcements about carbon capture projects moving forward after that was announced,” said Dreis, adding that is why Pembina supports the federal government’s proposed legislative cap on emissions from the oil sector and gas.

“It seems that the key pieces are not yet in place, so hopefully we can find a solution and start to get a meaningful reduction in emissions from this sector.”

The Pathways Alliance has previously said its carbon capture and storage network could help its member companies achieve a 32 percent reduction from 2019 emissions levels by 2030. Dilling said last March that he was optimistic that a final investment decision will be done before the end of 2025, with construction starting in 2026.

& copy 2024 The Canadian Press