Following the G20, which resulted in milder climate commitments than Ottawa had hoped for, at COP26 Prime Minister Justin Trudeau ramped up the pressure on Canada’s energy sector with talk of a hard cap.
Back home, Trudeau’s words caused some consternation for the industry that is already working toward net-zero 2050.
The leader’s pledges also appear to have had no effect on some of the world’s biggest polluters.
Rising Energy Demand
Amid an energy crisis and surge in inflation, the current demand for oil and natural gas is unmistakable. U.S. President Joe Biden had previously urged the Organization of the Petroleum Exporting Countries (OPEC) to increase production. In the push toward net-zero 2050, the International Energy Agency forecasted OPEC’s share of a much smaller global supply of oil to expand.But Ottawa increased the pressure on Canada’s energy sector, saying that “Canada is the first major oil-producing country moving to capping and reducing pollution from the oil and gas sector to net zero by 2050.”
Big Questions Remain
The Canadian government will set five-year national emission reduction targets—as mandated by Bill C-12, passed in June—and also “ensure that the sector makes a meaningful contribution to meeting Canada’s 2030 climate goals.” The feds will seek the advice of the Net-Zero Advisory Body on how to best move forward on this approach.To transition to a lower-carbon economy, many questions remain unanswered in Canada and globally relating to investment, carbon pricing, and employment. The expectation—and for some, hope—is that COP26 will tackle the fine print as environmental groups argue not enough is being done quickly while society’s energy demands grow and the livelihoods of thousands hang in the balance.
“It will be incredibly important for the federal government and the natural gas and oil industry to work collaboratively to ensure we meet our environmental and social outcomes. To achieve the ambitions of the Paris Agreement the world will need increased access to lower emission natural gas and oil,” said Tim McMillan, president & CEO of the Canadian Association of Petroleum Producers (CAPP), in a statement.
“Canada, under the right policy environment, can position ourselves as a preferred global supplier, creating jobs and prosperity for Canadians and helping to lower global greenhouse gas emissions,” McMillan said.
Alberta on Nov. 1 announced an investment of $176 million to reduce GHG emissions through 16 clean-energy projects. The initiatives are expected to cut about 7 million tonnes of emissions annually by 2030.