Environment Committee on June 6th, 2024

[Rich Kruger]

We have high hurdles in Canada in terms of regulatory requirements, which is fine. One of the challenges we have is that we're laying on regulatory requirement after requirement, which brings about complexity and a burden. It's like playing hockey, but the net's moving. The net keeps moving—

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

If I could just wrap up in my last 15 seconds or so, I want to say this.

While the Liberals seem to want us to freeze in the dark and be poor, I think it's time to support an industry that actually can build our economy and provide the world with the energy we need at a lower emissions rate than our global counterparts.

It boggles my mind how Liberal, NDP and Bloc Québécois members of Parliament can sleep at night when they want to put my constituents out of work.

[The Chair, Liberal, Francis Scarpaleggia]

Your time is up, Mr. Kurek.

Ms. Chatel, the floor is yours.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you very much, Mr. Chair.

Thanks to the witnesses for being here.

Through Pathways Alliance, many of your businesses have committed to reducing greenhouse gas emissions by approximately 22 million tonnes by 2030. We're also aiming to be carbon neutral by 2050. However, I must point out that very little capital investment has been made, even though we need capital investment if we want to meet those goals. That being said, governments have nevertheless invested billions of dollars to date.

I know that, in other countries, oil companies such as BP are making massive investments in clean and renewable energy at a rate of $7 billion to $9 billion a year.

Mr. Corson, the head of Pathways Alliance told us that uncertainty and a lack of clarity were two of the main barriers to increasing capital investment in decarbonization. That's also Mr. Poilievre's position on carbon pricing. You mentioned that carbon pricing was effective if applied to all sectors.

Do you agree with the position of the head of Pathways Alliance?

[Brad Corson]

Let me first say that what we're undertaking with Pathways is an unprecedented level of investment and an unprecedented level of emissions reduction for a sector. In order to make those investments, we need a clear policy that will be sustainable over many decades, because that's the nature of the investments we're making.

I can't comment specifically on the references you made to a Pathways executive, but having the clarity and the sustainability is key to us making these long-term investments.

[Sophie Chatel, Liberal, Pontiac, QC]

So in a nutshell, the fact that Mr. Poilievre and the Conservatives want to abolish carbon pricing is preventing the oil industry from decarbonizing.

Mr. Kruger, Mr. Corson and Mr. McKenzie, are you prepared to invest now and to reduce the short-term profitability of your companies in order to increase long-term viability and competitiveness in a fully decarbonizing world? Are you prepared to do that for your businesses, for investors and for Canadians who work for your companies? Are you ready to do that as other oil companies elsewhere in the world have done?

[The Chair, Liberal, Francis Scarpaleggia]

Who is that question for, Ms. Chatel?

[Sophie Chatel, Liberal, Pontiac, QC]

I'd like to hear the answers from Mr. Kruger, Mr. Corson and Mr. McKenzie in that order.

[The Chair, Liberal, Francis Scarpaleggia]

All right. Thank you.

[Rich Kruger]

I think we're doing that. We're spending material money. As I referenced, whether it's cogeneration investments, fuel blending, biofuels or energy efficiency, I think we're doing that in a way that is economic, keeps our business strong and can attract capital while, at the same time, reducing the carbon content of what we produce and how we produce it. However, you have to have both. If we can't attract capital, we can't invest capital, and I think some of my colleagues commented on that.

I think we are doing that.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you.

Mr. Corson, what do you think about that?

[Brad Corson]

I would echo that we, as a company, are definitely progressing on many investments. I commented on some of those in my opening remarks: both those that impact scope 1 and 2 emissions and also those that impact scope 3 with our renewable diesel. We need to continue to work this significant challenge together as a joint partnership among industry, the federal government and provincial governments. That's the only way we're going to overcome the significant obstacles associated with this project.

[Sophie Chatel, Liberal, Pontiac, QC]

What about you, Mr. McKenzie?

[Jon McKenzie]

I would agree with my colleagues. I think the investment is continuing to decarbonize and the Pathways members are all doing their individual investments as we wait for a financial framework that works for everybody with Pathways, as well as some regulatory certainly.

I know at Cenovus we made a commitment to reduce our greenhouse gas emissions by 35 % by 2035. This year, we've already reduced them by 10 % vis-à-vis the baseline in 2019. I think Brad made a point that's really important.

[The Chair, Liberal, Francis Scarpaleggia]

We have to stop there. I apologize, Mr. McKenzie, but Ms. Chatel's time is up.

Ms. Pauzé, go ahead.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

I don't know which one of you said earlier that he was waiting for regulations before taking action. I was a bit surprised at that because, every time it comes down to enforcing regulations, you don't want that and you oppose it.

Mr. Kruger, I'm going to go to you.

In your remarks, you noted the possibility of exporting oil. On that subject, I have one criticism to make of you and the entire industry. You never take into account the fact that oil that's burned generates CO2 and other greenhouse gases.

Going back to the position of Pathways Alliance, which focuses on reducing emissions from production operations by fitting it into a carbon neutrality strategy. However, emissions are constantly rising in that sector.

Within the Canadian framework, Canada is aiming to reduce emissions by 40% across all sectors. It's asking the oil and gas industry to cut its emissions by 30%, which is already 10 percentage points less than what's requested of other sectors. We're also told that your sector's goal is to reduce emissions by 16% to 20% between now and 2030. That's a lot less than what other sectors are being asked to do.

How can you commit to cutting your emissions when you aren't investing in that area and are planning to introduce every possible measure to make reductions unachievable?

[The Chair, Liberal, Francis Scarpaleggia]

Who is that question for?

[Monique Pauzé, Bloc, Repentigny, QC]

It's for Mr. Kruger.

[Rich Kruger]

Fundamentally, I don't agree with most of what you just said, but rather than going through point by point, I think the challenge is framed wrong. Climate change does not go around a border. It's the climate. It's the globe. If Canada can export cleaner burning natural gas, if it can export lower carbon oil to offset demand that will be consumed elsewhere, that makes the world a better place. I think we're so constrained about focusing on restricting Canada we're missing opportunities.

[Monique Pauzé, Bloc, Repentigny, QC]

Mr. Kruger, let me stop you there.

We agree on one thing: CO2 is emitted when oil is exported or burned. However, you didn't take that aspect into account in your remarks. So these are downstream emissions. That's my criticism of what you're saying.

When I think of floods, droughts, fires, lost farmland, human suffering and human distress, I realize that your industry contributes to all that in large part.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Now it's Ms. Collins's turn.

[Laurel Collins, NDP, Victoria, BC]

Thank you.

Maybe I'll ask Mr. Corson and Mr. McKenzie the same question that I asked Mr. Kruger.

There's a clear analysis that the oil and gas emissions cap is already set at a level that is so low that your companies could simply follow through on your voluntary climate commitments. It's deeply concerning to me that I have heard you actively lobbying against an emissions cap. Either your intention is to delay climate action further so you can maximize your profits, or you never had any intention of fulfilling those climate commitments you made.

[Jon McKenzie]

As I mentioned before, Cenovus has made a commitment to reduce our emissions by 35% by 2035, and we're well on our road to achieving those targets. I think the comments around the emissions cap are a bit different. What's been said is that we don't need an emissions cap and that all the incentives that are present today are the incentives to reduce our emissions and we've made those kinds of commitments.

[Laurel Collins, NDP, Victoria, BC]

If it's redundant, why would you lobby against it? You have been promising to reduce your emissions, but your emissions have been going up year after year after year. Why would Canadians trust you?

[Jon McKenzie]

If you look at the energy industry as a whole, our emissions actually peaked in 2017. Although production has continued to increase, our intensity has actually gone down. As an individual company, I can tell you the same things happen with us. We are down two million—