CALGARY — A new statement from the Oil Sands Alliance – formerly the Oil Sands Pathways to Net-Zero Alliance – misrepresents both the lack of new greenfield development in the last decade, and the oilsands industry’s record of increasing greenhouse gas emissions every year for the past two decades.
“It is simply false to claim that carbon pricing and the Canadian regulatory environment have prevented new greenfield development in the oilsands,” said Janetta McKenzie, director of the oil and gas program at the Pembina Institute. “There are greenfield oilsands projects that have long since received the necessary regulatory approvals, but that companies have chosen not to take forward.
“This has not, however, prevented companies from increasing their production and revenues. In the wake of the global 2014 oil price crash, oilsands producers – and the global oil industry as a whole – made a strategic choice to protect shareholders from future price disruptions by moving away from long-term projects and investments, and instead focusing on cost-cutting through layoffs, efficiency through automaton, and economies of scale through corporate mergers. As a result, Canadian oil and gas production increased by more than 47 per cent from 2012-2023, setting new records each year up to and including 2025. Worldwide, oil sector investment has never returned to its 2015 peak, despite rising production.”
“Oilsands executives have also given on-record statements in favour of carbon pricing as a fair market-based mechanism to drive innovation, including as recently as 2024.”
The Oil Sands Alliance statement also contains incomplete statements regarding its members’ emissions performance:
- The Alliance claims it has “a long track record of reducing its carbon emissions intensity.” Oilsands emissions intensity declined between 2011 and 2015, largely due to the transition to using gas instead of petroleum coke for steam generation, but producers have made little progress since then and virtually none over the past five years.
- Oilsands emissions have increased 177 per cent since 2005 and are projected to continue to rise even if the Pathways project is built in conjunction with the necessary increases in oilsands production to fill a hypothetical new one-million-barrel-per-day pipeline (a “Grand Bargain” scenario).
- The Alliance argues “the Canadian oil industry has a carbon emissions intensity that is already below the global average.” While Canadian oil emissions intensity is below other heavy oil competitors like Iraq or Venezuela, much of that difference is down to methane reductions, which have been regulated in Canada for years. However, methane regulations largely impact the conventional oil and gas sector, not the oilsands.
- Use of a nationwide figure therefore allows the oilsands producers to claim credit for progress made by conventional Canadian oil producers from reducing their methane emissions.
The Oil Sands Alliance statement also calls for a “supportive regulatory framework” for carbon capture projects. However, the combination of the federal Investment Tax Credit for Carbon Capture and Storage, as well as the Alberta Carbon Capture Incentive Program, means taxpayer dollars are already available for 62% of the Pathways project’s upfront cost. Live discussions about industrial carbon pricing – and crucially Alberta’s carbon credit market – are ongoing. If that market can be made to function effectively, it would provide the final piece of investment certainty, allowing the Pathways companies to defray the cost of their CCS investments by generating and selling credits. Far from industrial carbon pricing being an “uncompetitive tax”, rather, it is the thing that will ensure the Pathways project moves forward. In its absence, it is unclear how the project would become economic – increasing the likelihood that Canadian taxpayers would become liable for the entire cost of the Pathways project.
“Canadian and Albertan taxpayers have already offered to pay for two-thirds of the upfront costs to build the Pathways carbon capture project, which industry has been promising to build since 2021,” said McKenzie. “Its time for these extraordinarily profitable companies to stop pressing for ever-larger subsidies and accept the deal that has been presented through the MOU: no new pipeline can move forward unless the companies finally put their money on the table for the Pathways project.”
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Contact
Benjamin Alldritt
Senior Communications Lead, Oil & Gas, Pembina Institute
587-328-1955
