Canadian Oil Executives Slam Proposed Emissions Cap on Oil and Gas Production

• Canadian oil executives have spoken out against a proposed cap on carbon dioxide emissions from oil and gas production.
• They argue that the cap is unnecessary and could lead to a reduction in production.
• The oil and gas sector is the source of 28% of Canada’s emissions and the federal government aims to reduce emissions from the sector by 38% by 2030.

The chief executives of Canadian oil sands producers have spoken against plans by the federal government to impose a cap on carbon dioxide emissions from oil and gas production.

Speaking at a House of Commons committee hearing, the CEOs of Suncor, Imperial Oil, Cenovus Energy, Shell, and Enbridge, said the cap was unnecessary legislation, according to a Reuters report.

“I do support a price on carbon across the economy because I believe that will drive the innovation, the economic incentives on all of our part to continue to improve our business,” said Suncor chief executive Rich Kruger. “I fundamentally worry that a cap on emissions, the way it's constructed, will be a cap on production,” he also said.

The oil and gas sector is the source of the biggest chunk of Canada’s emissions, accounting for 28% of the total based on 2021 numbers. The federal government’s plan, first released at the end of last year, calls for a reduction in emissions from 171 million tons in 2019 to between 106 and 112 million tons by 2030.

“The world will not consume one less barrel of oil simply because Canada chooses not to provide it. That barrel will come from somewhere else,” Suncor’s Kruger also said at the hearing, echoing remarks by Shell’s former CEO Ben van Beurden in response to a court ruling that ordered the company to cut its production in order to cut emissions. 

“Canadian companies are among the world's most committed and proactive in reducing greenhouse gas emissions,” Kruger also said, as quoted by CBC.

Meanwhile, the CEO of Imperial Oil also expressed the view that a cap law would be essentially redundant.

“There's plenty of other vehicles and requirements in place,” Brad Corson said. “I've worked all over the world and Canada has one of the most stringent regulations of the places that I worked in.”

By Irina Slav for Oilprice.com

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