Canada’s oil sands have been criticized as being one of the most carbon-intensive assets in the world’s vast basket of crude plays. If a new plan comes together, however, they will become a carbon-negative source of hydrocarbons by 2050.
This is the goal of a group of operators that represent nearly 90% of oil sands production in Canada: Canadian Natural Resources, Cenovus Energy, Imperial Oil, MEG Energy, and Suncor Energy. The five-company alliance is calling its plan the “Oil Sands Pathways to Net Zero.”
In April, production from the region was nearly 3.2 million B/D. And, according to government figures, Alberta's oil sands developments generate about 70 megatonnes of emissions annually.
The Pathways vision calls for all of those emissions (i.e. scope 1 and scope 2 emissions) to be curtailed, offset, or otherwise fed into a carbon capture, utilization, and storage (CCUS) network. The proposal is to connect a trunkline to the region's oil fields and other industrial sites to a central hub for permanent storage or reuse.
The CCUS project would not only help the oil sands sector achieve net-zero greenhouse-gas (GHG) emissions by 2050, but the group says it would also help bring all of Canada in line with the climate commitments established by the Paris Agreement. That might also factor into the group's expectation that the provincial government in Alberta and the parliament in Ottawa will help share the burden of building out the infrastructure.
"The Pathways initiative is ambitious and will require significant investment on the part of both industry and government to advance the research and development of new and emerging technologies," the group said in its press release.
The joint statement continues: “As proud Canadian companies, members of the Pathways alliance share the aspiration of Canadians to find realistic and workable solutions to the challenge of climate change. The oil sands industry is a significant source of GHG emissions and the initiative will develop an actionable approach to address those emissions, while also preserving the more than $3 trillion in estimated oil sands contribution to Canada’s gross domestic product over the next 30 years."
While an estimated cost for the project was not shared, the Pathways group compared it to "the multibillion dollar" CCUS projects proposed or underway in Europe and in the US, "all of which involve significant collaboration between industry and government."
The Albertan government has already committed to spending $1.24 billion over the next 15 years on two separate carbon-capture projects, the Alberta Carbon Trunk Line, a 149-mi CO2 pipeline system that went on stream in 2020, and the Shell-operated Quest facility that last year pumped its 5-millionth tonne of CO2 into a sandstone reservoir.
The trunkline would link oil sands developments in the Fort McMurray and Cold Lake areas to a CCUS hub near Cold Lake. More CO2 could be brought in from other heavy industrial sites located across the region. The group is also considering the potential to connect the CO2 pipeline network to the Edmonton region in central Alberta that is home to more than 1.3 million people.
Additionally, the initiative would expand the use of GHG-reduction technologies at oil sands sites and along the CO2 network. Outside of this gathering system, other technologies are being considered for evaluation, including direct-air-capture CO2 systems and small modular nuclear reactors.
The Pathways members say that their broad vision for a net-zero sector will need new policies to create reliable access to sequestration rights, carbon credits, and tax credits. They also noted that Canada holds the world’s third-largest reserves and that outside of transportation fuels, those crude stores will be needed to provide feedstocks for carbon fibers, asphalt, and plastics.
“That’s why it’s critical to take action now to ensure Canada takes its place as a leading supplier of responsibly produced oil to meet the world’s demand for energy well into the future,” the group said in its statement.
In Their Own Words
Sonya Savage, Alberta’s Minister of Energy: “The Oil Sands Pathways to Net Zero initiative is an industry-driven, made-in-Alberta solution which will strengthen our position as global ESG leaders. Every credible energy forecast indicates that oil will be a major contributor to the energy mix in the decades ahead and even beyond 2050. Alberta is uniquely positioned and ready to meet that demand. This initiative will also pave the way for continued technological advancements, ultimately leading to the production of net-zero barrels of oil.”
Tim McKay, Canadian Natural Resources President: “Canadian ingenuity has enabled oil sands development and with continued innovation, positions Canada to be the ESG-leading barrel to meet global energy demand. We are committed to working together with industry partners and governments to help meet Canada’s climate objectives while providing sustainable long-term economic and social benefits for Canadians from the oil sands.”
Alex Pourbaix, Cenovus President and CEO: “We are doing more than just talking about the need to play a role—we are taking bold action to address our emissions challenge and earn our spot as the supplier of choice to meet the world’s growing demand for energy.”
Brad Corson, Imperial Chairman, President and CEO: “Canada’s long-term success in achieving its climate goals lies in a collective commitment to innovation, global competitiveness, supportive public policy, and open and ongoing dialogue on constructive solutions. Imperial is collaborating with others in industry and governments to develop and commercialize the breakthrough technologies that will reduce emissions and support society’s net-zero ambitions.”
Derek Evans, President and CEO of MEG Energy: “Bold action today demonstrates our commitment to tackling climate change and global climate leadership. This alliance working collectively with the federal and Alberta governments and all stakeholders will ensure that Canada continues to be a leading supplier to the world of responsibly produced oil.”
Mark Little, Suncor President and CEO: “Collaboration among companies, innovators, and governments is critical to achieving ambitious goals. That’s how we built a budding oil sands resource into one of the world’s most-reliable and ESG-leading oil basins in the world. Canada— as one of the few jurisdictions with industrial-scale commercial CCUS projects in operation, coupled with Alberta’s abundant natural gas resources, geology, and relevant technological expertise—is well positioned to lead in this area.”
