Cory Morgan: Is Suncor’s Pivot Away From Renewables Part of a Trend?

The Suncor refinery in Edmonton in a file photo. The Canadian Press/Jason Franson

Commentary

For over 20 years, Suncor Energy has been investing in and building renewable energy projects. The company under CEO Rich Kruger has formally announced it is finished with the renewable energy business and will focus on oil production.

Is the mad worldwide rush to develop renewable energy sources coming to an end?

It is appearing so as economic reality comes crashing home to roost.

Suncor has long been lauded as a pragmatic energy company leader in working toward transitioning away from fossil fuels. In 2000, the company announced a plan to invest $100 million into alternative energy sources and renewables. Since then, they have built or funded numerous wind, solar, and ethanol projects across the country and continued to increase their expenditures on renewables.

Now, after all that time, energy, and expenditure, Suncor has decided to hang up its hat with renewables and get back to oil.

The promised rewards from renewable energy investment never materialized. Even with government subsidies and fast-tracked project approvals, wind and solar projects never became feasible revenue generators for Suncor.

Part of the reason Suncor took on such a leading role in renewable energy development was based on the environment, social, and governance (ESG) principles beginning to be embraced by companies at that time. It was believed if companies put social justice and environmental issues ahead of profits, it would pay off in the long run. It didn’t, and companies are fleeing ESG management models as fast as renewable energy projects now.

Germany was held up as an example for the world to follow as a leader in renewable energy development. The country shut down coal and nuclear generation plants while investing billions in wind and solar energy development. What was quietly happening, though, was the nation was falling into an ever-deeper dependence upon imported fossil fuels for energy needs. Even before the Russia/Ukraine war, Germany was at risk of dangerous winter blackouts due to a lack of reliable power. Citizens were returning to burning wood as a source of heat in the winter of 2022.

Germany found itself returning to burning coal to generate electricity and has been desperately sourcing liquid natural gas from Qatar and the United States to fill its needs. The desire to reach net-zero electricity generation hits the back seat when fears of freezing to death set in.

Likewise, France and other countries have been refiring coal-generating plants they had shut down under the illusion the energy needs would be quickly filled through renewable means.

Alberta has garnered condemnation from environmental activists since Premier Danielle Smith announced a pause on permits for new solar and wind projects. Alberta is just following a worldwide trend as nations abandon or at least pause renewable energy projects and focus on fossil fuel development.

In Asia, Indonesia just shelved its net-zero plans while China and India continue to burn coal at an ever-increasing rate.

In Europe, both Norway and the United Kingdom are expanding their oil exploration and production in the North Sea despite both nations long claiming to pursue net-zero emissions.

The only major oil and gas-producing country that appears to be working toward shutting down fossil fuel development is Canada. The constant shifting of environmental goalposts has caused conventional energy investors to flee. Pipelines have been cancelled, along with major oilsands projects such as the $20 billion Teck mine. At the same time, the Trans Mountain pipeline expansion remains mired in construction limbo since the Trudeau government purchased it.

As energy costs continue to increase, Canadian citizens are going to tire of being the world boy scouts when it comes to reducing fossil fuel use and demand development of resources.

As the push toward electric vehicles and electric home heating continues, power grids are struggling to keep up with the increased load. It’s a sad irony that many electric vehicles are indirectly powered by coal-burning electric generating plants.

Electric home heating may feel less environmentally onerous to people, but that electricity is often generated through burning natural gas at a power station. It would be more efficient and environmentally friendly to simply remain with direct natural gas heating. That exposes the crux of the issue.

The perception of “green” energy had become more important than the reality.

While energy prices skyrocket and billions are invested in renewable energy sources, emissions continue to rise and we need fossil fuels as much as we ever have. The transition failed.

What was most striking with Suncor’s announcement was how unapologetic they were. They aren’t interested in virtue signalling and have bluntly stated their intent to focus on oil production. They have embraced a focus on reality.

Renewable energy sources may indeed still be the way of the future. They aren’t ready to take over from fossil fuels yet though, and the transition we are seeing today is a return to conventional energy sources.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.