MEG Energy yanks climate targets, blaming greenwashing law. Will other oilsands companies follow?

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An oil worker holds raw sand bitumen near Fort McMurray, on July 9, 2008. Oilsands producer MEG Energy says it bought credits from other producers to increase its production to near capacity in the second quarter despite the ongoing Alberta government oil curtailment program. THE CANADIAN PRESS/Jeff McIntosh
An oil worker holds raw sand bitumen near Fort McMurray, on July 9, 2008. (THE CANADIAN PRESS/Jeff McIntosh) · The Canadian Press

MEG Energy (MEG.TO) has temporarily suspended its 2030 and 2050 greenhouse gas emissions targets, blaming recent federal legislation aimed at cracking down on misleading environmental claims.

The move, announced last week when the oilsands company reported financial results, raises questions about larger industry peers following suit in the coming days.

Calgary-based MEG is among six oilsands companies behind the Pathways Alliance, a group working to advance a massive $16.5 billion carbon capture and storage network in northern Alberta. Last month, Pathways and its members scrubbed information on environmental and climate actions from their websites and social media accounts in response to an anti-greenwashing provision in Bill C-59.

Last Friday, MEG announced a temporary suspension of its 2030 and 2050 greenhouse gas emissions targets until the Competition Bureau of Canada interprets the changes to the Competition Act, which received royal assent on June 20.

“MEG remains fully committed to environmental and climate performance, and the work it is doing to reduce GHG emissions, and will continue to advance its initiatives notwithstanding the cautionary steps it has taken with respect to its environmental disclosure and climate-related targets,” the company stated in a July 26 news release.

The executives behind Pathways called the disclosure standards in Bill C-59 “so vague as to lack meaning,” and reliant on internationally recognized standards which “may or may not exist,” in a June 20 joint statement. They say this opens the door to frivolous litigation against oil and gas companies.

In addition to MEG, Pathways member companies include Canadian Natural Resources (CNQ.TO)(CNQ), Imperial Oil (IMO.TO)(IMO), Cenovus Energy (CVE.TO)(CVE), ConocoPhillips Canada, and Suncor Energy (SU.TO)(SU). All of the member companies have committed to some manner of climate target.

“No lawyer is going to approve making statements on undefined legislation,” Kevin Krausert, a former oil field services executive who now runs a clean technology venture capital firm and startup accelerator, told Yahoo Finance Canada on Wednesday. “This legislation has thrown a wet blanket on clean tech innovation across the country.”

Canadian Natural Resources and Cenovus are scheduled to report financial results on Thursday. Imperial is due to release its quarterly financials on Friday. Suncor is scheduled for Aug. 7.

“The implications are profound for any company making statements,” said Krausert, who declined to comment specifically on potential actions by individual oilsands companies. “The Competition Bureau needs to offer immediate clarification on what it defines as internationally recognized standards.”