The federal environment minister has accused Canadian oil companies of failing to cash in on promises to tackle climate change.
Steven Guilbeau says the country’s major oil companies have pledged to do something about greenhouse gas emissions, but instead pour most of their record-breaking profits into shareholders.
It’s the third time in at least six months that Guilbeau’s frustration has spilled out as oil company profits soar. His criticism this time came in the form of a video posted on Twitter as the major oil producers began releasing their third-quarter earnings.
Guilbeau said in an interview, “We’re already paying lip service. ‘I don’t know if they are.'”
The first earnings report from the sector came out Friday from Imperial Oil, which reported earnings of $2 billion in the third quarter and $6.2 billion in the first nine months of 2022. That was $1.7 billion in the first nine months of 2021.
The company said it plans to spend $1.5 billion on share buybacks and will increase its quarterly dividend by 30%.
Cenovus, Suncor and Canadian Natural Resources are due to report results next week.
These four companies, along with MEG Energy and ConocoPhillips Canada, make up what is called the Pathways Alliance.
Oil prices soar after Russia invades Ukraine
Canadian companies benefited from a sharp rise in global oil prices earlier this year, largely due to Russia’s invasion of Ukraine.
In the first six months of 2022, Pathways companies posted over $22 billion in profits. This compares to he was under $6 billion in the first six months of 2021.
A spokesman for the Alliance did not respond to Guilbeau’s call on Friday, saying the consortium would not comment on its members’ financial decisions.
Two weeks ago, the group said it would spend $24 billion over the next eight years on emissions reduction projects, but is seeking more funding from Ottawa before it rolls out.
Businesses may get some of what they’re after next week when Finance Minister Chrystia Freeland releases her fall economic statement. We may tweak the tax credits for the carbon capture and storage technologies we deploy.
Technologies to trap emissions from industrial sources and return them underground are important to oil and gas companies. This is a major part of how we continue to produce our products while meeting emission reduction requirements.
Incentive competition from the US
The current tax credit, which primarily covers half the value of capital investment, will cost Ottawa about $2.6 billion over the next five years and $1.5 billion annually over the next four years.
The oil company was seeking compensation of up to 75%, but was not satisfied with the proposed 50%.
Canada may be forced to step up its game as the U.S. Inflation Reduction Act has more lenient incentives for carbon capture technologies.
Guilbeault said on Friday he didn’t know what the tax credit plans were, but admitted that US incentives have changed the domestic landscape.
“Of course we are looking at what the US has done,” he said. “We understand that it is a competitive investment world, but at the same time, oil sands companies are in Canada and cannot do emissions reduction projects in the United States. must invest in decarbonizing Canada.”
Guilbeault says that by 2050 global oil demand is projected to be less than a third of what it is today, and all of it will have to come from sources that don’t add emissions through production. .
“If they don’t invest in decarbonisation, where will oil be one of the most emitting? I don’t think so.”