Yahoo Finance Oil sands emissions could start falling by 2027: report
Total greenhouse gas (GHG) emissions from Canada's oil sands could begin to drop in the next five years, according to new research examining long-term trends in the energy-rich region where producers have vowed to hit net-zero by 2050.
IHS Markit says GHG intensity from the oil patch, the ratio of emissions divided by production, has dropped by 20 per cent between 2009 and 2020. The London-based research firm says the decline continued during the COVID-led market disruptions, when weaker production was expected to increase emissions per barrel.
"Such a disruption would be expected to put upward pressure on GHG intensity by driving down facility utilization, using similar levels of energy but with fewer units produced," Kevin Birn, chief Canadian oil market analyst for IHS Markit, said in the report. "Yet GHG intensity still declined, and indications are that greater levels of reduction should be anticipated in the future."
Absolute emission could begin to decline within the next half decadeKevin Birn, chief Canadian oil market analyst for IHS Markit
Birn calls the trend "an important signal," adding that "GHG intensity reductions are poised to overtake a slowing oil sands growth profile, and absolute emission could begin to decline within the next half decade."
On an annualized basis, IHS says GHG intensity has fallen by a yearly average of 1.5 kilograms of carbon dioxide equivalent per barrel since 2009.
The findings come as companies in Canada's oil patch face mounting pressure to reduce their environmental impact. Major institutional investors like the Caisse de dépôt et placement du Québec, Canada's second-biggest pension fund, and Norway's massive sovereign wealth fund, have divested from the oil patch due to climate concerns.
The Oil Sands Pathways to Net Zero initiative has committed to using carbon capture and other technologies to cut GHG emissions from operations to net-zero by 2050. Members include Suncor (SU.TO)(SU), Canadian Natural Resources (CNQ.TO)(CNQ), Cenovus (CVE.TO)(CVE), Imperial Oil (IMO.TO)(IMO), MEG Energy (MEG.TO), and ConocoPhillips (COP).
The companies collectively account for 95 per cent of oil sands production. They estimate it will cost $75 billion over 30 years, or roughly $2.5 billion per year, to eliminate the 68 megatonnes of greenhouse gases they emit annually today.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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