New rules from the U.S. Securities and Exchange Commission (SEC), the federal financial markets regulator, could force oil sands producers to admit that their pollution production is actually greater than that of all of Canada and that their “net zero” strategy concerns only 15% of their contribution to climate change.
The proposed rules would require oil companies to disclose not only the emissions that result from the extraction and refining of oil and gas (so-called scope one and two emissions), but also the much greenhouse gases released when their product is burned by buyers (scope three emissions).
The oil companies have long argued that they should not be held responsible for what people do with the products they sell to them, which is like a cigarette manufacturer banning smoking in its factories and claiming then that its product does not cause cancer. The rules proposed by the SEC in fact indicate that their responsibility does not stop at the gates of the refinery, but that it is at the heart of their activities.
Needless to say, this would put members of Canada’s Oil Sands Pathways to Net Zero initiative on the spot. The initiative turned out to be a brilliant marketing and lobbying stunt. Since its inception a year ago, member companies have draped themselves in green as they proclaim their intention to bring emissions from the oil sands to “zero” (provided taxpayers foot the bulk of the bill, of course).
Observers could be forgiven for not seeing that this pledge only applies to production-related emissions and does not take into account scope three emissions, while companies plan to continue to increase production of oil and gas. The CEOs of oil sands giants Cenovus and CNRL have both said they have no plans to pull out of oil and gas production, while Suncor recently sold its investments in the oil and gas industry. wind and solar energy to focus more on hydrocarbons.
So far, none of the Pathways companies have disclosed how they will achieve net zero or how much they will rely on accounting tricks like carbon offsets. Their lobbyists, however, managed to convince the federal government to assume half the cost of carbon capture projects (while Alberta supplements this subsidy with royalty credits).
Currently, four of the six Pathways members (Suncor, Cenovus, Imperial and ConocoPhillips) are disclosing their scope one through three emissions, which total 708 million tonnes per year. The other two (CNRL and MEG) only disclose their production-related emissions (scopes one and two). Assuming that CNRL and MEG have the same ratio of production-to-end-use emissions as the other four companies, the total for the six companies is 856 million tonnes (117 per production, 739 for product combustion). If we consider only the Canadian operations of ConocoPhillips (the other five companies have the bulk of their production in the oil sands), the total drops to 707 million tonnes, which is still higher than the national total of 672 million. tons.
In Canada, securities regulators bowed to the oil lobby and proposed rules that would make reporting of scope three emissions optional. However, if the US SEC stays the course, all of this information will be published in corporate financial filings, where rigging the numbers has legal consequences.
This type of review is a problem not only for oil companies, but also for gas companies and for the banks that support them, as we would expect them to include these totals in their “funded emissions”. . Canada’s big five banks have all made a net-zero commitment, while increasing their fossil fuel financing. They have tried to hide behind oil companies’ net zero commitments, but their green paint will quickly peel if the SEC holds the companies accountable for their full contribution to climate change.
No amount of paint, no matter how green, can hide such high levels of pollution. It’s time for oil companies, and the banks that finance them, to shift their investments towards renewable energy so that we can all benefit from cleaner air, a safer climate and good jobs through the transition energy.