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Unfortunately, some Ottawa politicians think they can score points by denigrating the oil and natural gas industry. The industry is essential to our daily lives and too valuable to our economic well-being to be the target of these irresponsible stunts. It’s improved its ESG performance for many years.
Last Thursday, the latest example occurred in Ottawa at the House of Commons Committee on Environment and Sustainable Development. NDP MPs Charlie Angus and Laurel Collins were particularly unhinged in their remarks, saying, “Burn our children’s future.” They claimed the industry is “not attempting to reduce emissions,” when the opposite is true. Both MPs support a rapid energy transition without articulating a realistic plan for achieving this goal.
The energy transition is vital to address climate change. However, there’s no benefit to Canada or the world by pursuing this goal at the expense of the well-being of all Canadians.
Here are some essential facts that some MPs and Canadians don’t seem to know or blissfully ignore when pursuing fantasy energy transition goals.
Who produces GHG emissions from fossil fuels?
Oil and natural gas production produces about 20% of total GHG emissions from fossil fuel production, distribution and consumption. Consumers create 80%, primarily from combustion.
If politicians truly want to accelerate the energy transition, they should quit blaming producers and urge consumers to reduce their consumption. Please explain how you’re encouraging conservation.
How important is the industry to Canada?
The Canadian oil and natural gas industry employs hundreds of thousands and contributes billions in crown royalties and taxes. The industry represents about $70 billion, or 3% of the Canadian economy.
Some politicians want to inflict economic collapse on Canada by stopping the industry. This statement is not an exaggeration. Too many forget that every Canadian household, business and government department consumes fossil fuels daily. Please explain how economic collapse is helpful to Canadians.
How important is the industry to world markets?
If Canadian oil and natural gas were to disappear from world markets, other producers would gleefully step in to meet the demand. Canada’s share of total global production is about 5%. The OPEC+ producers have enough spare capacity to fulfill this additional demand immediately.
Federal politicians have already chased $ billions in oil and gas investment out of Canada. Stopping Canadian oil and natural gas production is counterproductive to addressing climate change and only hurts Canadians. Please explain how stopping production is helpful to your claim that you want to accelerate the energy transition when alternative energy sources cannot meet the demand.
How good is the industry’s ESG performance?
The ESG performance of Canadian oil and natural gas producers compares favourably to producers in other countries. For example, Canada exhibits:
- Low emission intensity for oil and natural gas production among the top 10 producers.
- Lowest energy subsidies among the G20 nations.
- Second best ESG governance score among major producing countries.
- High transparency in financial reporting due to IFRS and C-SOX.
- High regulatory and safety standards compared to other producing countries.
- The lowest projected emission intensity for LNG exporters.
Politicians fail to appreciate that stopping Canadian production would mean no consumer would experience better ESG performance. Please explain how that outcome aligns with your climate change goals.
How profitable is the industry?
Canadian oil and natural gas producers have reported record profits in the last two years. These profits have:
- Reduced debt.
- Increased employment.
- Increased economic activity as Canada has emerged from a post-COVID downturn.
- Contributed to increased crown royalty and tax payments to governments.
- Increased dividends paid to investors that include the pension funds of most Canadians.
Politicians have chosen to ignore the fact that the industry endured a near-death experience and some bankruptcies during the previous five years due to low prices. Please explain how industry profits are somehow excessive and how that’s undesirable for Canadians.
Who should pay to reduce GHG emissions?
Canadian oil and natural gas producers have reduced their GHG emissions every year for many years and have plans to continue. Oilsands producers formed the Pathways Alliance to develop a massive $16.5-billion carbon capture and underground storage (CCUS) network. Like other industries, the oil and gas industry seeks government incentives to move forward with CCUS. Consumers should understand that they will indirectly pay for CCUS through taxes or product prices.
Politicians criticize the Canadian oil and gas industry for not wanting to pay for the CCUS network. Please explain why they should when no other country asks the industry to absorb these significant costs.
How can we better address climate change?
The energy transition is vital to address climate change in Canada and elsewhere. Denigrating the oil and natural gas industry is not a step forward. We need reliable energy from fossil fuels during the energy transition and hydrocarbons indefinitely after that.
Canada and other countries can only achieve close to net-zero GHG emissions with:
- A robust oil and natural gas industry that ensures an affordable energy supply and continuity.
- A significant investment in nuclear electricity generation.
- Increased investment in other electricity generation technologies.
- Ending the permitting gridlock on resource development project approvals required for critical minerals, electricity production, and grid interconnections.
- Collaborating on grid interconnections that make renewable electricity generation more effective and ensure high availability of electricity.
- Shifting people to drive fewer kilometres in smaller cars and taking transit more.
- Encouraging households and businesses to reduce their energy consumption.
- Shifting high-GHG emission industries to new technologies.
- Increasing the densities of our cities.
I invite our politicians to spend more time promoting these steps and less time misleading Canadians with inaccurate grandstanding about the oil and natural gas industry.
About Yogi Schulz
Yogi Schulz is an information technology consultant who works extensively in the petroleum industry to select and implement administrative, operations, and geotechnical systems. He writes regular articles about developments in the energy industry and technology.
You can contact Yogi Schulz through his LinkedIn profile at this link.
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