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Opinion Leader: Climate plans will include innovation and technology in Canada’s oil sands

October 26, 2022
Kendall Dilling is President of the Pathways Alliance.

 When this year’s United Nations climate change conference (COP27) kicks off in Egypt in early November, Canadian delegates should take pride that they are coming with real solutions to meet Canada’s climate commitments —and the world’s energy security needs.

It may come as a surprise to some conference delegates and observers that Canada’s oil sands industry is playing an essential part in the country’s 2050 net-zero plans.

Our industry recognizes its significant share (10 percent) of Canada’s greenhouse gas (GHG) emissions. We are showing up to COP27 with the resolve to achieve our own net-zero goal for 2050, and an actionable plan in progress to be a major part of Canada’s decarbonization solution.

Some will no doubt argue the only way for the oil sands to contribute to net zero is to cease production. But the technological prowess our industry possesses means that Canada’s oil sands can continue to meet the world’s needs for energy security and affordability, even as we implement one of the world’s most ambitious GHG emissions reduction plans.

Russia’s invasion of Ukraine, and the resulting European energy crisis, show there has never been a more important time for the world to get the oil and gas it needs from stable, peaceful countries, while remaining committed to real emissions reductions.

Canada’s six largest oil sands companies — which together operate approximately 95 percent of Canada’s oil sands production — have come together to form the Pathways Alliance.

The Alliance was born out of the mutual recognition that climate change is one of the world’s most significant challenges, and that we need to reduce absolute GHG emissions from our operations.

Strong industry partnerships and significant technological breakthroughs have resulted in reduction of per barrel carbon dioxide (CO2) emissions by 22 percent in the last decade alone.

However, for the industry to assure its long-term future — and meet the demands of its customers, Canadians and the investment community — we know we need to reduce absolute emissions and eventually get to net zero.

World’s largest carbon capture and storage networks

Working with governments, the Pathways Alliance brought forward a multi-phased plan, aimed at reducing CO2 emissions by 22 million tonnes by 2030 in its first phase. A steady course of action will implement operational improvements, and deploy new technologies to achieve our 2050 net-zero goal.

Key to those efforts is one of the world’s largest proposed carbon capture and storage (CCS) networks. Located in northeastern Alberta, it will start by sequestering 10-12 million tonnes of CO2 by 2030, reducing emissions from 14 oil sands facilities. Eventually, our proposed carbon storage hub could see another 30 to 40 million tonnes captured in later parts of our plan.

Pathways Alliance plans to invest approximately $16.5 billion before 2030 in its CCS network, which, when built, will be 10 times larger than any current project in the world. An additional $7.6-billion investment is planned on other emissions reduction projects before the end of the decade, for a total of $24.1 billion.

Engineering, environmental, and regulatory work is well underway on the CO2 capture and storage facilities, as well as a proposed 400-kilometre pipeline.

The Pathways Alliance was recently given the green light by the Government of Alberta to further evaluate its proposed carbon storage hub in the Cold Lake, Alberta region, which could eventually see more than 1.1 billion tonnes of CO2 safely stored deep underground in a saline aquifer.

Pathways’ six member companies have assigned some 200 of their brightest minds to work on the Alliance’s net zero plan. Technical working groups have been formed to study and advance more than 70 technologies that could potentially be deployed, to help further reduce emissions in later phases of its plan.

Realistic and achievable targets required

We continue to work with the federal and Alberta governments to ensure Canada’s co-funding programs and CCS regulations are globally competitive, so that our industry emissions reduction targets are realistic and achievable. We remain confident we will get there, and look forward to demonstrating our efforts to align with government plans as we share our intentions with COP27 delegates.

When most people speak of energy transition, they are thinking of transition away from oil and gas. However, transition really means transitioning away from GHG emissions while continuing to provide the energy that the world needs.

We must focus on continued development of renewables and other non-GHG emitting sources of energy. But we also must focus on decarbonizing oil and gas at the same time. So as long as oil and gas are required, reducing their GHG emissions will also play an important role in achieving global climate objectives.

The oil sands industry is working together with an unprecedented level of collaboration between companies and government, Indigenous communities and stakeholders.

We have line of sight to decarbonizing the Canadian oil sands and making Canadian oil the most responsibly developed barrel on the planet. And working together, we will get it done.

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Cautionary Statement: Statements of future events or conditions in this press release, including projections, targets, expectations, estimates, and business plans are forward-looking statements. Forward-looking statements can be identified by words such as achieve, aspiration, believe, anticipate, intend, propose, plan, goal, seek, project, predict, target, estimate, expect, forecast, vision, strategy, outlook, schedule, future, continue, likely, may, should, will and/or similar references to outcomes in future periods. Forward-looking statements in this press release include, but are not limited to, references to the viability, timing and impact of the Oil Sands Pathways to Net Zero initiative collaboration and the development of pathways in support of a net-zero future; support for the pathways from the Government of Alberta and the Government of Canada; the ability to enable net zero emissions from oil production and preserve economic contribution from the industry; the continued role of fossil fuels as part of a diversified energy mix; and the deployment of technologies to reduce GHG emissions, such as CCUS, process improvements, energy efficiency, fuel switching, electrification, infrastructure corridors and new emissions-reducing technologies. All net-zero references in this announcement apply to emissions from oil sands operations (defined as scope 1 and scope 2 emissions).

Forward-looking statements are based on current expectations, estimates, projections and assumptions at the time the statements are made. Actual future results, including expectations and assumptions concerning: demand growth and energy source, supply and mix; amount and timing of emissions reductions; the adoption and impact of new facilities or technologies, including on reductions to GHG emissions; project plans, timing, costs, technical evaluations and capacities, and the ability to effectively execute on these plans and operate assets; that any required support for the pathways from the Government of Alberta and the Government of Canada will be provided; applicable laws and government policies, including climate change and restrictions in response to COVID-19; production rates, growth and mix; general market conditions; and capital and environmental expenditures, could differ materially depending on a number of factors. These factors include global, regional or local changes in supply and demand for oil, natural gas, and petroleum and petrochemical products and the resulting price, differential and margin impacts; political or regulatory events, including changes in law or government policy and actions in response to COVID-19; the receipt, in a timely manner, of regulatory and third-party approvals including for new technologies; lack of required support from the Government of Alberta and the Government of Canada; environmental risks inherent in oil and gas exploration and production activities; environmental regulation, including climate change and GHG regulation and changes to such regulation; availability and allocation of capital; availability and performance of third-party service providers; unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; reservoir analysis and performance; unexpected technological developments; the results of research programs and new technologies, and ability to bring new technologies to commercial scale on a cost-competitive basis; operational hazards and risks; general economic conditions, including the occurrence and duration of economic recessions; and other factors referenced by the companies’ in their most recent respective annual reports and management’s discussion and analysis, as applicable.

Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to the companies. Actual results may differ materially from those expressed or implied by its forward-looking statements and readers are cautioned not to place undue reliance on them. The companies undertake no obligation to update any forward-looking statements contained in this press release, except as required by applicable law.