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During the pandemic’s first wave, the price of oil cratered. Barrels of crude were worth so little that, on one strange day, traders paid to give them away.

The tumult rocked Canada’s oil industry, already years into a long bust, and it rocked Alberta’s finances. At the worst of it, the government forecast a deficit of $24.2-billion.

Times change, and quickly. Bust has once again become boom in Alberta. The price of a barrel has steadily climbed and now trades around a heady US$90. Natural gas prices are also strong. For the oil and gas business, it means a sudden windfall. Likewise for the Alberta treasury: The province’s most recent deficit forecast was $5.8-billion. There’s even talk of a balanced budget coming soon.

It’s the magic of oil. Easy go, easy come. Remember the old bumper sticker pledge? “Please God, let there be another oil boom. I promise not to piss it all away next time.” The chance to live up to that has returned. Billions of dollars in royalties and taxes will help Alberta get out of a financial bind, and ARC Energy Research Institute in Calgary forecasts potential record levels of revenue and cash flow for the industry.

The money needs to be put to good use, and where to spend it is obvious. Canada’s oil business faces a challenge that is both immediate and long-term: climate heating, and the urgent need to reduce emissions.

As part of Canada’s international pledge to cut the country’s emissions by 40 per cent within eight years, Ottawa has promised to cap oil and gas industry emissions, a policy under development. It will be a declining cap in the years ahead. The companies in the oil sands – which have always been built on technological innovations – need to be ready to respond.

Last year, they set out a goal of net-zero emissions by 2050, and outlined a general strategy of how to get there.

An alliance of six companies, led by Canadian Natural Resources and Suncor, represents almost all oil sands output, which they say combines for 68 megatonnes of annual climate heating emissions. (Canada’s official tally of annual oil sands emissions is 83 MT.)

The oil sands companies want to cut 22 MT by 2030. Roughly a third of that would be through carbon capture, while the rest includes such things as more efficient operations, more electrical power and fuel substitution.

The group also promises “significant R&D investments,” and it has a $1.5-billion plan to build a carbon-dioxide pipeline to link oil sands operations around Fort McMurray with Cold Lake further south, where the gas could be pumped into the ground and stored.

The longer-term costs would be bigger: The group has estimated $75-billion over three decades – $2.5-billion a year. Analysts at Scotia Capita said in a recent report that Canadian Natural and Suncor would have the biggest annual bill, of about $760-million each. That’s a lot of money – yet it’s only a fraction of the boom’s expected record revenues and cash flow. And it would be only a smaller part of what the companies will invest this year on general capital spending: $4.7-billion at Suncor and $4.3-billion at Canadian Natural. Scotia Capital concluded that, while emissions reductions won’t be cheap, the companies can afford it.

There will be a role for government; how big is the question.

Ottawa is working on a carbon-capture tax credit, similar to one in the United States. It’s expected in this spring’s federal budget. Industry is asking for a lot: they want taxpayers to foot 75 per cent of their bill.

This seems extreme. Canadians have already invested $17-billion in the Trans Mountain oil pipeline purchase and expansion. Paying the bulk of the carbon-capture bill would be yet more public money going to an industry that is doing really well right now, and likely will be for several years to come.

And while there is a role for Ottawa, the companies profiting from the oil sands have responsibilities. They are currently rewarding their shareholders with dividends and the like. That’s fine. But cutting emissions has to be an equal priority. This cannot be a case of private profits and socialized costs.

This latest oil boom is the moment to get started – and not just get started, but get ahead of the game. In the oil business, the money suddenly appears, then vanishes just as quickly. With good times rolling again, the industry has to invest for the future – and that means slashing climate-heating emissions.

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