In an effort to adapt to Trudeau’s recent green policies and owing to pressure from the International Energy Agency (IEA), Canadian oil sand producers have formed an alliance to achieve net-zero emissions by 2050. This would see a huge shift from current practices as, at present, oil sands producers extract some of the most carbon-intense crude oil. However, as the cost of carbon increases to meet environmental objectives in Canada, oil companies face increasing pressure to shift practices towards achieving net-zero.
The alliance will include Canadian Natural Resources (-1.77%), Cenovus Energy (-0.10%), Imperial Oil (-1.91%), MEG Energy, and Suncor Energy (-2.58%), which together operate around 90 percent of the country’s oil sands production. They will be working alongside both the federal and Alberta governments to make operations less carbon-intensive.
The companies are expected to invest in several areas in order to reduce their carbon emissions including, carbon capture and storage (CCS) technology, repurposing waste into hydrogen energy, fuel switching, as well as innovative technologies such as direct air capture and small modular nuclear reactors.
The alliance aims to maintain its oil production, which will contribute an estimated $3 trillion to Canada’s GDP over the next 30 years while creating jobs and advancing clean energy practices.
Significant actions towards achieving net-zero have been taken across the oil and gas sector over the last month, as companies have felt the mounting pressure from governments, regulators, and stakeholder activists.
Last month, an activist investor managed to oust two Exxon (-2.56%) directors from its board in a push for a greater response to climate change. The small hedge fund, Engine No. 1, demonstrated its dissatisfaction with the poor financial performance of Exxon during the pandemic, as well as its limited effort to introduce climate change initiatives.
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