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Statement: CCUS tax credit key to oil sands GHG reduction goals

April 7, 2022

CalgaryKendall Dilling, Interim Director of the Oil Sands Pathways to Net Zero Alliance issued the following statement in response to the investment tax credit for carbon capture, utilization and storage (CCUS) projects announced in today’s federal budget:

“The Pathways Alliance welcomes today’s formal announcement of an investment tax credit for CCUS projects for industries across Canada. Based on our initial assessment, this is a positive step in our efforts to work collaboratively with governments to help Canada achieve its climate goals and ensure our country can be the world’s preferred supplier of responsibly-produced oil.

“Climate change is a critical challenge of our time, and our industry has an essential role to play in helping our country achieve a sustainable future, including through the use of CCUS technology.

“With this announcement, the federal government has recognized the importance of developing new technologies to help Canada fight climate change, as well as the importance of the oil sands to our country’s energy security. Our CCUS project alone could reduce carbon dioxide emissions by 10 megatonnes per year by 2030.

“We will be carefully reviewing the implementation details of the tax credit to learn how it can be applied to help us advance our unprecedented plan to achieve meaningful emissions reductions by 2030 and ultimately our goal of net zero emissions from oil sands operations by 2050.

“The tax credit is an essential part of a supportive and nimble fiscal and policy framework that is required for our industry to proceed with our foundational carbon capture, transportation and storage network.

“We look forward to next steps such as moving forward with our application to the Government of Alberta to secure underground space in the Cold Lake region to safely and permanently store CO2.

“If we want Canada to be a world leader in reducing emissions through carbon capture, we need to ensure our industry can remain competitive with other oil and gas producing jurisdictions around the world.

“Because of the amount of long-term capital investment required to build carbon capture and storage infrastructure, and the speed we need to move at to meet 2030 targets, the countries that are doing this successfully are all using a collaborative model where governments are co-investing alongside industry.

“As recent geopolitical tensions have shown, there is a vital need to ensure greater security and stability of the world’s oil supply, for as long as it is needed. And it’s important that the world transition to oil produced sustainably by stable, democratic countries that are committed to addressing climate change.

“By the end of the decade, the 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.

“A healthy, sustainable oil sands industry, that is able to make meaningful emissions reductions, could contribute an estimated $3 trillion to the Canadian economy over the next 30 years.” 

 

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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.