Environment Committee on June 6th, 2024

[Brad Corson]

I have nothing to add.

[Shannon Stubbs, Conservative, Lakeland, AB]

Okay. Thanks—

[The Chair, Liberal, Francis Scarpaleggia]

Wait just one moment.

When a witness is not speaking, we ask that you put yourself on mute, if that's possible. Thank you.

[Rich Kruger]

Okay. I'm sorry.

[The Chair, Liberal, Francis Scarpaleggia]

Go ahead, Mrs. Stubbs.

[Shannon Stubbs, Conservative, Lakeland, AB]

To each of you, do you intend to grow your oil sands production and specifically Canada's oil exports?

[Brad Corson]

Certainly that is our objective. We have been growing our production and we see there continues to be a global market for our products. We think Canada can play a very important role and bring significant economic benefits to this country. Yes, our objective is to economically and responsibly grow production.

[Jon McKenzie]

Cenovus is the same. We're currently growing our oil sands production by about 70,000 barrels a day over the next three to four years. What I would say is that we're one of the major shippers on the TMX pipeline, which gives us egress and access to global pricing for our products, but without that egress, I'm not sure that would happen. I think one of the two issues that we have in Alberta in growing our oil sands production is solving for carbon, which we need to do, and ultimately solving for egress as well. Both of those fall within the regulatory framework that you referred to in your prior questions.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Mr. van Koeverden now has the floor.

[Adam van Koeverden, Liberal, Milton, ON]

Thank you very much, Mr. Chair.

Thank you to the witnesses for joining us here. I can tell you that I've never seen the room this full, so there's considerable interest in this discussion. Thank you very much for joining us virtually.

I'm going to focus all of my questions on oil sands, and my questions will be directed to you, Mr. Kruger, if that's okay. I'm just trying to find my camera, which is just over there, so I can speak directly to you.

I have a couple of graphs here. The first graph is the change in Canada's oil and gas sector greenhouse gas emissions since 2005. I'm hoping that with the camera you'll be able to see this. The dark blue line represents the increase from oil sands production. You'll notice that it has gone up about 40%, and 40% of all oil and gas emissions are from the oil sands. They represent about 87 megatonnes in emissions. For reference, Canada's emissions sit at around 708 megatonnes. That's a very considerable—

[The Chair, Liberal, Francis Scarpaleggia]

Mr. van Koeverden, I'm told the same rules apply in committee as in the House with regard to props.

[Adam van Koeverden, Liberal, Milton, ON]

There's no other way that I can share this graph, but as everybody can see, the oil and gas emissions have gone up quite dramatically.

[The Chair, Liberal, Francis Scarpaleggia]

I understand.

[Adam van Koeverden, Liberal, Milton, ON]

Mr. Kruger, are you familiar with this? Are you familiar with the 87-megatonne contribution just from the oil sands in Canada to Canada's overall emissions?

[Rich Kruger]

I'm not familiar with the graph. It wasn't legible to me, but I am familiar generally with the emissions increase as it's related to production increase with Canada's growing share of the world's oil markets.

[Adam van Koeverden, Liberal, Milton, ON]

I'm glad that you referenced the total production going up because that's very true. What has also gone up is the individual emissions intensity per barrel. I have another graph here. I won't hold it up. It indicates a 9% increase in the emissions intensity per barrel of oil in Canada. Do you agree that the emissions intensity per barrel of crude oil in the oil sands has gone up as a result of longer distances, access to mines and processing facilities?

[Rich Kruger]

I can't speak to the oil sands overall, but I'm looking at a comparable chart for our company, where I would say it's been essentially flat over the last five years from an intensity standpoint.

[Adam van Koeverden, Liberal, Milton, ON]

My graph goes back a lot farther than that to 2004. What I see is more than a 10% increase in emissions intensity per barrel of crude from the oil sands. Now, here I have a comparison of the emissions intensity per barrel, kilograms CO2 per barrel, of various types of oil and gas.

Like I said, I'm focusing on the oil sands here. The oil sands have an average emissions intensity of about 174 kilograms CO2, whereas U.S. Bakken with no flare is around 24 kilograms CO2. In Mexico, Cantarell is around 40. Even U.S. Alaska North Slope is just over 100. It's 174 kilograms of CO2 per barrel of oil. Like I said, that's been going up over the last 20 years or so. There are 174 kilograms of CO2 emissions per barrel. That's, again, emissions intensity per barrel in the oil sands.

This is just extraction and processing emissions before it's even used. When people, particularly.... I've heard it a couple of times today, but Conservative politicians regularly say that Canada needs more oil and gas. Do you know what? I tend to agree. If we can produce it more ethically and with a lower carbon intensity, then certainly. Have we demonstrated an ability to reduce the carbon emissions per barrel of bitumen extraction in the oil sands?

Everything that I'm reading here indicates that it's upwards of seven times more oil-intensive than oil elsewhere. Where's the rationale for Canadian oil sands being way less carbon-intensive? It seems like it's the opposite of what's true.

[Rich Kruger]

Again, I don't have the benefit of the data and charts you're looking at. Had they been shared ahead of time, I might have been able to comment more directly.

However, I would say generally...and I know three companies represented on this call today have invested tens of billions of dollars in new-generation mining that essentially produces a barrel that is then the equivalent of a barrel refined in the U.S. today. We've done that at Fort Hills—and I'll let my other colleagues speak—and it's called paraffinic froth treatment. It is a technology that has been developed in Canada and that allows Canadian barrels to be competitive on the world scale.

I'll add one other quick one. One of my colleagues also mentioned what they're doing with in situ technologies to introduce solvents that dramatically reduce the carbon intensity.

I think therein lies the answer: Canadians, given the opportunity, their technology and their ingenuity, can achieve the climate objectives and can benefit Canada and Canadians at the same time.

[Adam van Koeverden, Liberal, Milton, ON]

Mr. Kruger, I would tend to agree with you that it's possible, but it hasn't been demonstrated yet. As I said, Canada's oil sands per-barrel emissions are seven times those of the alternatives. Then when people say we should be lowering the emissions of the oil and gas production average around the world by increasing emissions from our oil sands, it just doesn't add up. There are more emissions per barrel from our oil sands production than there are from literally any type of oil or gas around the world.

Again, I'll read your quote precisely. It says:

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. In most cases, somewhere with less commitment to responsible development...and climate action.

Mr. Kruger, it's demonstrated right here that Canadian oil sands bitumen is the highest-emissions product on the market today. Is it going to go down? Is it going to get down towards U.S. Bakken? Can we get it under 100 kilograms of CO2 per barrel?

[The Chair, Liberal, Francis Scarpaleggia]

Could we have a very brief response, please?

[Rich Kruger]

I think the answer is to work together. We talked about the Pathways Alliance, for example. There are major opportunities to do that. When we do that, the world benefits, Canadians benefit and Canadian industries benefit.

Yes, I'm a believer that the answer to that is yes.

[Adam van Koeverden, Liberal, Milton, ON]

Canadians are relying on you. I really hope we can get oil sands emissions down.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Ms. Pauzé now has the floor.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

Thanks to the witnesses for being with us.

I have some questions, but I'm going to begin with a statement because I think some things need to be said.

The theme of the meeting to which I've been invited is the profits of your companies, whose operations, I would note, make those companies the biggest CO2 emitters in Canada, if not the world, as Mr. van Koeverden just discussed. Along with those profits, which are in the region of $39 billion a year, we would like to hear about your efforts to reduce your greenhouse gas emissions, something that appears to be a major challenge because all of you are in favour of increasing production despite the commitments that Canada has made under the Paris agreement.

Through your lobbying companies, whether it be the Canadian Association of Petroleum Producers or Pathways Alliance, you have managed to convince the federal government to allocate several billions of dollars in the form of tax credits to carbon capture and storage projects in particular. There are others, but I won't touch on them. However, carbon capture and storage technology will contribute nothing to emissions reduction. I'll come back to that point.

Here in the Standing Committee on Environment and Sustainable Development, we are sickened by the recent revelations from journalist Carl Meyer's investigation, which was published in The Narwhal on May 27. In addition to securing public funds through Pathways Alliance when your pockets are already full, you've also sought assurances from us that the carbon capture and storage projects contemplated by you and member corporations won't be subject to the federal review provided for under the Impact Assessment Act. Given the state of climate change, I find that request shocking. I'm appalled. To make such a request, the alliance must be unshakeably confident and absolutely certain of the influence your industry has on the political system.

The Alliance's meetings with four ministers that were reported in that article occurred in January 2023. The article cites clear demands that read like a carbon copy—just a little pun to lighten the atmosphere—of measures that you've secured under recent budgets. Other requests, which don't yet appear in the federal budget, will probably be in the budget for the next fiscal year because Pathways Alliance is nothing if not zealous in its efforts.

In 2020, Shell Canada announced that its Quest project had captured five megatonnes of CO2 in five years. Many organizations that wrongly contend that carbon capture and storage technology is the missing link for decarbonizing the oil and gas industry use that number to impress people and steer the government more toward carbon capture and storage, despite the failings of that technology, because research and assessments have shown that the Quest project has emitted more CO2 than it has captured. I tell you from the outset that I don't believe the claim that carbon capture and storage will save us. We'll come back to this.

I would remind you that, last May, the Capital Power corporation terminated the carbon capture and storage project at its Genesee site west of Edmonton. Avik Dey, CEO of Capital Power, said that, upon carefully reviewing the project, the company had concluded that it hadn't met the risk-reward thresholds set for it and that the company had therefore terminated the project.

Bloomberg Business News estimated that the cost of carbon capture and storage for currently operating facilities was $600 per tonne. Hundreds of credible experts and organizations around the world, even people in your own industry who don't wish to engage in greenwashing, keep repeating that, if the technology isn't ready after five years in development, then it's best to try something else. However, carbon capture and storage technology has already been around for 15 years. You've promoted it mainly so you can exhaust oil fields.

Ultimately, you'll have to write down your industry's balance sheet, period, end of story.

Data published by the Canadian Association of Petroleum Producers confirmed earlier this year that investment in the sector would reach $40.6 billion in 2024 and that those funds would be invested in increased operations and production, not decarbonization measures, for no other reason than to maximize your profits.

You can't even allocate the equivalent of one year's profits to the climate transition or to adapting your workers' skills so they can work in the renewable energy industry. It's your shareholders who come out winners. The money of Quebeckers and other taxpayers should be used to slow you down and to promote a more orderly and planned exit from our dependence on fossil fuels, as stated by the Intergovernmental Panel on Climate Change, the International Energy Agency and many hundreds of experts.

You've discussed good jobs and growth, of course. I was sure I'd hear about that.

Here's my question: While ecosystems, human health and human rights are being undermined, and the Senate has just finished a two-year study on the subject, why siphon off public funds if you're doing it to maintain the status quo? Where's your sense of responsibility? How can we possibly want to adopt you as partners in the transition?