Brian Zinchuk is editor and owner of Pipeline Online
At the COP26 climate change conference in Glasgow last fall, Prime Minister Justin Trudeau promised to “cap oil and gas sector emissions today, and ensure they decrease tomorrow, at a pace and scale needed to reach net zero by 2050.”
The House of Commons Standing Committee on Natural Resources heard from several witnesses on Feb. 9 regarding the Liberal government’s intention to cap those greenhouse gas emissions from the oil and gas sector.
Mark Scholtz, president and CEO of the Canadian Association of Energy Contractors was one of the witnesses.
Here was his testimony:
The issue of emissions cap on the oil and gas sector is very important one for our country. Our association represents Canadian energy service companies operating close to the wellhead. Our member companies employ 10s of 1000s of energy workers in the oil and gas industry and in emerging sectors such as hydrogen helium, geothermal, LNG, lithium and carbon capture, utilization and storage.
Canada’s energy contractors recognize that governments and industry leaders from across the country and around the world have issued a challenge and that’s to make energy development cleaner and even more sustainable to meet ambitious climate targets. It is our belief that true partnership and collaboration with the Canadian oil and gas industry, that meeting Canada’s climate goals are achievable. Industry supports the Government of Canada’s goal to significantly reduce the GHG emission profile of our sector. But we strongly assert that the drive for net-zero must not effectively become a cap on oil and natural gas production in Canada.
Canada’s energy industry is a willing partner in helping Canada reduce GHGs and ultimately achieve net zero emissions in our sector. We believe this energy transition is a technical challenge but also a great economic opportunity. The production of cleaner oil and gas development of alternative energy sources such as hydrogen and geothermal, and support for CCUS form a viable pathway to net-zero and it is one that supports Canadian energy workers and resource communities and our entire economy through the energy transition.
As we as a country discuss how to lower emissions in our oil and gas sector. We must have this conversation realistically practically and acknowledge some fundamental facts. The International Energy Agency continues to project a growing demand for oil and natural gas in the coming decades. In fact, during the IEA’s recent launch of its Canada 2022 report, the executive director emphasized Canada as being a cornerstone of global energy markets and should continue to be, so he stated, “We still need oil and gas for years to come. I prefer that oil and oil and gas is produced by countries like Canada who wants to reduce emissions from oil and gas.”
This, with a record of over $3.5 billion invested since 2018 in technologies to reduce greenhouse gas emissions, Canada’s energy industry continues to be the largest investor in low carbon innovations, clean technologies and environmental protection in the country. That’s fact number one, that demand for oil and gas will continue through the energy transition and Canada’s oil and gas industry is the largest investor in emission-reducing technology.
Fact number two is that access to reliable, affordable and secure sources of energy is essential to Canadian families and our economy. Without prudent and realistic planning, regulatory actions to reach net zero by 2050 may produce unintended consequences that could ultimately undermine Canada’s climate commit commitments. The ongoing and escalating energy crisis in Europe demonstrates the need for energy, affordability, reliability and security as we tackle emission reductions.
Fact number three is that the production of Canadian oil and gas employs hundreds of thousands of Canadians and are worth trillions of dollars to our economy in the coming decades. Within the context of continued global demand for oil and gas resources, Canada’s net-zero commitment should not result in unnecessary job loss, drastic increases to energy bills or displaced economic activity to jurisdictions who do not share our commitment to climate action, environmental sustainability or human rights.
The fundamental point is that Canadian economic prosperity and energy security must be the foremost consideration as we move forward.
In closing, Mr. Chair, we recommend that the Government of Canada leverage the innovation and expertise of Canada’s oil and gas industry as it moves forward with this discussion, that it supports energy resource workers and that it recognizes that Canada’s energy sector can play a major role in producing needed net-zero energy for global markets. We believe the entire upstream oil and gas industry can develop a unique competitive advantage moving forward. But to do that, we need the Government of Canada to support Canadian energy.
It can also be viewed at the link below.
Asked by Pipeline Online on Feb. 10 why he addressed the committee, Scholz said, “First of all, we were asked.
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“This is a committee of the House of Commons that reaches out in consultation with industry and so it is important for us to be at the table and talking to policymakers about our industry, so that they have as much of the best information as possible to make good decisions. And, of course, in a minority Parliament as you would well know, committees are a very important element of the ultimate decision making process.”
He noted that the government is in a minority position in the House as well as on the committee, meaning that committees do have a very important role.
“We’re there because we want to make sure that the government’s getting the best information as possible and the facts about our industry,” he said.
Asked if, capping emissions from oil and gas is realistic, Scholz replied, “It’s complicated.
“The one thing that I would say that we are absolutely opposed to is capping production.
“The issue of emission reduction is this is a technical problem. It’s not something that’s impossible to do, but it does require a great deal of collaboration with government, but it also involves government support. And so, there are many different technologies that are being introduced in the industry today. Some of them are commercial. Some of them aren’t. Some of them are just kind of right in kind of that R&D stage. And so if the government is directing industry to move in this direction, I mean, that’s their prerogative, and they’re the government of the day and they can do we’re really, whatever their they believe their mandate is. But in order for us to be able to accomplish, what they’re looking for, they it needs to be a partnership. And it’s going involve you know, not just accolades, it’s going involve significant investment from both the private and public sector.”
Has any indication been given as to what capping emissions even means?
Scholz said, “We don’t know. It’s very, it’s like very early, early days at this point. So we don’t have a lot of information. I think, at this stage, we’re kind of at the conceptual level of what this ultimately could mean. Some of my colleagues in the operating community made some really good points about what should be included in kind of the principles of these regulations.
“So it’s early days. We don’t have a lot of information, but it is something that’s going to be something we’re going have to monitor and make sure that our voices at the table. It could be very consequential to the industry.”
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