Canadian oil sands companies plan to spend more than $24-billion on emissions-reduction projects by 2030, as they accelerate their bid to get production to net zero by 2050.
The investment by members of the Pathways Alliance – a group that covers about 95 per cent of oil sands production – includes $16.5-billion for a massive carbon capture and storage (CCS) network in northern Alberta.
Another $7.6-billion will be spent on advancing other emissions-reduction technologies, such as pilot projects that use injections of solvents to reduce the amount of steam needed to extract oil, and studies on direct air capture, the viability of small modular nuclear reactors and geothermal energy.
Companies in the Pathways Alliance have already started early consultations and engineering work on the CCS project, at the heart of which is a proposed transportation line to gather captured CO2 from more than 20 oil sands facilities and move it to a proposed underground storage hub near Cold Lake, Alta. Environmental field work is also under way to support regulatory application submissions for the project, with formal consultations set to begin in the fall.
Pathways president Kendall Dilling told The Globe and Mail in an interview “there’s an urgency and a focus” on getting to net zero “that is unparalleled in my 30 years in this industry.”
“Five years ago, three years ago, I wouldn’t have predicted we could achieve this. The CEOs [of oil sands companies] understand that we don’t have a long-term future in this business if we don’t address our greenhouse gas emissions.”
The six companies in the alliance are Canadian Natural Resources Ltd., Cenovus Energy Inc., Imperial Oil Ltd., MEG Energy Corp., Suncor Energy Inc. and ConocoPhillips Canada.
A recent analysis by the Pembina Institute, a think tank, found the companies have done little to follow through on their public pledges to reduce their greenhouse gas emissions, despite raking in historic profits in 2022. And it criticized a lack of transparency around those companies’ plans to get to net zero.
Mr. Dilling countered that the companies have collectively spent billions of dollars over the years through a group called Canada’s Oil Sands Innovation Alliance, which has now been incorporated into Pathways. But he acknowledged “there’s a certain element of truth there that we probably haven’t done a good enough job of communicating what we’re doing.”
“It’s a valid perspective they bring, but I think our perspective is, ‘Watch us now,’” he said.
“We have made that fundamental mindset shift that our future is a carbon-free production of our product. We are hoping to get meaningfully there by 2030, and then all the way there by 2050.”
He said an important part of the effort has been showing vulnerability, and acknowledging the sector is a large source of greenhouse gas emissions, but is committed to being part of the solution.
Mr. Dilling, a former wildlife biologist, was first seconded to Pathways in June, 2021, from his position as vice-president of health, safety, environment and regulatory affairs at Cenovus. At first, he led the group’s regulatory work, then he was named president this past summer.
He said Pathways is now “kind of sick of talking” about its plans, and is trying to demonstrate it’s serious about its goals.
“We want to shift from policy to projects. We want to put steel in the ground,” he said.
And although “it’s been a bit of a disaster” to get large, new, multimillion-dollar infrastructure projects built in Canada over the past decade, he said, the world is now watching what’s happening in the oil sands.
“This energy transition globally is going to be an industrial revolution all over again. Trillions and trillions of dollars are going to have to be invested to decarbonize our global energy systems,” he said. “Canada has a bona fide opportunity to be a legit player in that transition and we’re hugely benefited by the fact we are a world leader right now in CCS.”
Alberta’s new Premier, Danielle Smith, has spoken favourably about Pathways’s net-zero goals. But during her United Conservative leadership campaign, Ms. Smith also promised a controversial sovereignty act as a means for the Alberta legislature to refuse to enforce specific federal laws or policies – something Mr. Dilling worries could create uncertainty for projects such as Pathways’s major CCS plans.
Given uncertainty is “the enemy of major project development,” he said he’d like to see different levels of government give contractual certainty to large emissions-reduction projects to ensure they can endure political swings.
That said, he emphasized that Pathways doesn’t exist because of government regulations or requirements, it “exists because we don’t have a long-term future if we don’t figure this out. And so we’re almost saying, ‘Just get out of our way and support us, and we’ll make this happen.’”
“Let’s accept that for some period of time, there’s going to be a transition. And let’s decarbonize the use of fossil fuels as aggressively as we can, rather than just assuming we can pinch them off in a five-year period, which isn’t realistic. Because that’s the fastest path to reducing absolute greenhouse gas emissions.”