The federal Minister of the Environment criticizes the Canadian oil companies for not having invested money in their promises to fight against climate change.
Steven Guilbeault says the country’s major oil players promised to act on greenhouse gas emissions, but instead paid most of their record profits to shareholders.
It’s at least the third time in the past six months that Guilbeault’s frustration has spilled over as oil company profits soar. This time, his criticism took the form of a video posted to Twitter as major oil producers began to release their third-quarter results.
The sector’s first earnings report came Friday from Imperial Oil, which reported $2 billion in profit for the third quarter and $6.2 billion for the first nine months of 2022. That compares to $1.7 billion. $ for the first nine months of 2021.
The company said it plans to spend $1.5 billion on stock buybacks and increase its quarterly dividend by 30%.
Cenovus, Suncor and Canadian Natural Resources are expected to release their results next week.
These four companies, along with MEG Energy and ConocoPhillips Canada, form what is called the Pathways Alliance, a consortium formed to address climate change in the oil sands.
Global oil prices surged in early 2022, largely due to the Russian invasion of Ukraine, and Canadian companies reaped the benefits.
In the first six months of 2022, Pathways Alliance companies reported profits in excess of $22 billion. That compares to less than $6 billion in the first six months of 2021.
A spokesperson for the alliance did not respond to Guilbeault’s call on Friday, saying the consortium would not comment on members’ financial decisions.
Two weeks ago, the group said it would spend $24 billion over the next eight years on emissions-cutting projects, but is seeking additional financial help from Ottawa before stepping up a gear.
Businesses could get some of what they’re asking for next week when Finance Minister Chrystia Freeland tables her fall mini-budget. She could use it to modify the carbon capture and storage technology tax credit she introduced last spring.
Technology that traps emissions from industrial sources and brings them underground is essential for oil and gas companies, as it is a major part of how they can continue to produce their products while meeting their emission reduction requirements. .
The current tax credit — mainly to cover half the cost of capital investments — will cost Ottawa about $2.6 billion over the next five years and $1.5 billion annually for the next four years.
The oil companies had asked for coverage of up to 75% and were not satisfied with the 50% offered.
Canada may be forced to up its game because the US Inflation Reduction Act offers more generous incentives for carbon capture technology.
Mr. Guilbeault stressed on Friday that he did not know what the plan for the tax credit was, although he acknowledged that the American incentive had changed the domestic situation.
“Of course we are looking at what the United States has done,” he said. It’s a competitive investment world, we understand that. But at the same time, the oil sands companies are in Canada. And they can’t do emission reduction projects in the United States. If they believe in the future of their businesses, they need to make those investments in decarbonization in Canada. »
Mr Guilbeault added that projections show that by 2050 global oil demand will be less than a third of what it is today, and all of this will have to come from sources that do not add emissions. by production.
“Will there be a place for one of the most emitting forms of oil if they don’t make these investments in decarbonization? I don’t think so,” he concludes.