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Press Release: A Pathway to Net Zero Emissions for North America’s Largest Oil Resource

March 8, 2022

Unprecedented oil sands alliance offers sustainable solution for North American energy security

Houston: Canada’s major oil sands producers are working together on a first-of-its-kind net zero initiative that could help ensure long-term, secure supplies of affordable and responsible energy for North America.

Together, Canadian Natural, Cenovus Energy, ConocoPhillips Canada, Imperial, MEG Energy and Suncor Energy have formed the Oil Sands Pathways to Net Zero Alliance. The goal of the Alliance is to achieve a phased reduction in emissions from oil sands operations, reaching net zero by 2050, working in collaboration with Canadian federal and provincial governments.

As the single largest oil resource on the continent, and the third largest in the world, the Canadian oil sands offer unparalleled potential to help ensure long-term, secure supplies of affordable energy for Canada and the United States, and for North America to become the preferred supplier of sustainable oil to the world.

“The Pathways Alliance has a well-defined plan to reduce current oil sands emissions of 68 megatonnes per year in phases over the next three decades to ensure both near- and long-term progress,” said Alex Pourbaix, President & Chief Executive Officer, Cenovus Energy. “By tackling our emissions challenge head on, we’re working to ensure the oil sands can offer Canada, and the United States, a sustainable product and a higher degree of long-term energy stability and certainty.”

The alliance is pursuing multiple technology pathways to achieve its goal of net zero emissions from oil sands production. The initial focus of the group is a foundational carbon capture and storage (CCS) network to gather CO2 from more than 20 oil sands facilities in northern Alberta and transport it for safe storage in underground geological formations. While similar large-scale CCS projects are already being developed in other oil producing jurisdictions, including the United States, the United Kingdom, Norway and the Netherlands, the Pathways Alliance facility will be one of the largest of its kind in the world.

The Pathways Alliance vision recognizes that oil is a significant source of greenhouse gas emissions that must be addressed as the world transitions to a lower-carbon future. At the same time, many independent and credible forecasts conclude that, to meet the world’s growing energy demand, oil will continue to be needed for decades to come as part of a diversified energy mix – both as a transportation fuel and as a critical building block for products we use every day.

“There is no switch to turn off hydrocarbons and quickly ramp up renewables in a way that ensures a continued supply of reliable, affordable low-emissions energy,” said Mark Little, President and Chief Executive Officer, Suncor. “All forms of energy will be required and by driving down our GHG emissions to net zero, Canada’s oil sands are well positioned to help facilitate an orderly transition.”

Canada has long been the number one supplier of imported oil to the United States and is a significant and increasingly critical source of heavy oil feedstock for Gulf Coast and Midwest refineries. In 2020, Canada accounted for 52%[1] of the nearly 7.9 million barrels per day of petroleum products imported into the United States, far outpacing imports from other oil-producing nations.

Representing Pathways Alliance CEOs, Mark Little from Suncor and Alex Pourbaix from Cenovus will take part in a CERAWeek panel at 5 p.m. CST today, along with Hon. Sonya Savage, Alberta’s Minister of Energy and moderated by Daniel Yergin, Vice-Chair of IHS Markit. The panel will focus on the work being done by the Alliance and the opportunities for Canada and the United States.

Advisory

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 deployment  of technologies to reduce GHG emissions; the ability to create jobs, accelerate development of the clean tech sector, provide benefits for other sectors and help maintain Canadians’ quality of life; and making economic investments to ensure a successful transition to a net zero world and delivering long term value to shareholders. 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.

 

Pathways Alliance

The Oil Sands Pathways to Net Zero initiative consists of Canadian Natural, Cenovus Energy, ConocoPhillips Canada, Imperial, MEG Energy and Suncor Energy. The companies operate facilities accounting for about 95 per cent of Canada’s oil sands production.

As proud Canadian companies, members of the Pathways alliance share the aspiration of Canadians to find realistic and workable solutions to the challenge of climate change. The initiative will develop an actionable approach to address those emissions, while also preserving the more than $3 trillion in estimated oil sands contribution to Canada’s gross domestic product (GDP) over the next 30 years. The initiative will create jobs, accelerate development of the clean tech sector, provide benefits for multiple other sectors and help maintain Canadians’ quality of life. The members of the Pathways alliance will do their part by making the economic investments needed to ensure that our companies successfully make the transition to a net zero world, and hence, deliver long-term value to shareholders. More information is available at oilsandspathways.ca.

 

Contacts

Mark Cameron
Senior Advisor, External Engagement
Pathways Alliance
613-327-4141

mark.cameron@pathwaysalliance.ca

Alain Moore
Pathways Alliance
825-409-7431

alamoore@suncor.com

 

BACKGROUND

The Oil Sands Pathways to Net Zero Alliance

Quick Facts

  • Canada’s oil sands have 162 billion barrels of proven reserves (3rd largest in the world)
  • The six Oil Sands Pathways Alliance members operate 95% of production from the oil sands
  • The Pathways Alliance has already begun work to eliminate 68 megatonnes (Mt) of annual oil sands production emissions in three phases*:
    • Phase 1 – 2020-2030 – 22 Mt/year
    • Phase 2 – 2030-2040 – 25 Mt/year
    • Phase 3 – 2040—2050 – 21 Mt/year
  • The Pathways Alliance is pursuing multiple technology solutions, including:
    • Continuous process improvements, such as the use of solvents
    • Fuel switching, including the potential use of hydrogen and small modular nuclear reactors
    • Other emerging technologies such as direct air capture
  • Feasibility, design and initial engineering studies for the CCS project are currently underway, and the initiative is working towards an application for pore space, the designated geological formations that can safely store captured CO2.

*Emissions reductions for each phase are estimates based on current assumptions and may be subject to adjustment.

 

About the Pathways Alliance

  • The Pathways Alliance is an unprecedented collaboration among Canada’s largest oil sands producers to help address one of the greatest challenges of our time – climate change. The Alliance is pursuing multiple technology pathways and approaches to achieve our goal of net zero emissions from production by 2050.
  • To help Canada meet its climate goals, we have a three-phased plan, with short-term steps, to ensure immediate progress to reduce carbon emissions so we can achieve our goal of net zero emissions by 2050.
  • Many independent and credible forecasts conclude that oil will continue to be needed through 2050 and beyond as part of a diverse and stable energy mix to meet the demands of a growing global population. By achieving net zero emissions in the oil sands, Canada has a unique opportunity to help ensure long-term, secure supplies of affordable and sustainable energy for itself, and the United States, and to help North America become the global supplier of choice for responsibly produced oil.
  • By the end of the decade, the Pathways Alliance has the potential to generate approximately 35,000 jobs in construction and clean tech, protect 25,000 to 35,000 existing jobs, and add another 1,000 permanent jobs to support our low-emissions facilities compared to a do-nothing scenario.
  • Our Pathways Alliance foundational project includes the design and construction of a world-leading carbon capture network in the province of Alberta. The project will leverage Canada’s existing expertise in carbon capture technology. We’re also taking lessons from the United Kingdom, the United States, Norway and the Netherlands, which are also developing large carbon capture projects through a collaborative model with government.
  • The goal is to reduce our current total greenhouse gas emissions of 68 megatonnes annually over the next 30 years – that is the equivalent of removing almost 15 million cars from the road (equivalent to half the cars in Canada).
  • Our industry cannot meet this challenge alone; we are working closely with all levels of government in Canada to ensure this initiative succeeds, including working together on an effective Canadian fiscal and policy framework.
    • Fiscal Framework: Investing in carbon-reducing technologies together. For example, the amount of capital investment required to build carbon capture and storage infrastructure is significant. Countries successfully deploying this technology are using a collaborative model, including government investment.
    • Policy: Continuing to support effective, efficient, and timely policies and regulatory processes to meet our timeframe that includes significant reductions by 2030.

[1] U.S. Energy Information Administration fact sheet – Frequently Asked Questions (FAQs) – U.S. Energy Information Administration (EIA)

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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.