Oilsands execs say they can’t invest in decarbonization any faster, despite profits

OTTAWA –

Oilsands executives insist they’re all in on chopping emissions and can make massive investments in inexperienced know-how, however they preserve there is not a spot to speculate that cash but.

Many corporations are coming off a yr of windfall earnings not as a result of they pumped out extra product, however as a result of the struggle in Ukraine and international provide chain crunches pushed world oil costs method up.

Environment Minister Steven Guilbeault has stated repeatedly over the past yr that the businesses must show their dedication by placing a few of that chilly exhausting money into local weather initiatives.

But in an interview with The Canadian Press, Cenovus CEO Alex Pourbaix stated the businesses are shifting “as aggressively as (they) can.”

“We’re not yet at the point where we can invest billions in these projects,” Pourbaix stated.

Cenovus is certainly one of six oilsands corporations within the Pathways Alliance, a consortium created to work collectively to decarbonize their manufacturing fully by 2050. The corporations need to spend $24 billion by 2030 on emissions chopping, together with two-thirds of that on carbon seize and storage methods.

However, who can pay for these investments is a degree of rivalry.

So far, the consortium has spent half a billion {dollars} on Phase 1 of those initiatives, in accordance with the alliance’s president Kendall Dilling.

The business is hoping to see the federal authorities do extra to match the funding being supplied by the U.S. authorities to incentivize the event of unpolluted power in that nation.

The Liberal authorities has argued it has already created incentives for the business, together with an funding tax credit score for carbon seize and storage initiatives, and that it is now time for the business to step up.

“If they don’t make those investments while they’re making record-level profits, then when would it be a good time for them to make those investments?” Guilbeault stated in an interview final September.

“If not now, then I don’t know when.”

Oil and gasoline corporations have loved document earnings within the final couple of years due to skyrocketing power costs. At a time when inflation is at decades-high ranges, the expansion of company earnings has come underneath intense scrutiny, with some calling for windfall taxes to seize the surplus earnings.

In a brand new report from the Canadian Centre for Policy Alternatives, senior economist David Macdonald discovered that for each greenback Canadians spent on rising costs over the past two years, 25 cents went towards oil and gasoline sector earnings.

However, Pourbaix rejected the notion that the business must contribute extra to authorities coffers.

“I think we are already contributing significantly,” he stated, estimating the business can pay someplace between $10 billion and $12 billion in federal taxes this yr.

Pourbaix stated nations which have opted for windfall taxes on the oil and gasoline sector have far much less progressive tax methods than Canada.

However, Andrew Leach, an economics professor on the University of Calgary, stated it is tough to make comparisons throughout nations as a result of in Canada the business pays each royalties and taxes.

And whereas there may be a lot debate in regards to the appropriateness of windfall taxes, the federal authorities and a few consultants are involved in regards to the business selecting to not make investments these earnings in carbon seize initiatives that may assist decarbonize the oilsands.

“I would worry that their strategy here is, ‘We can get Canadians excited about this and that will push the federal government to put more dollars in to defray some of the investment costs,”‘ stated Leach.

He warned that technique might backfire as Canadians watch the business rake document earnings and ship money to shareholders.

“If Canadian started asking, ‘Well, if the owners of the oilsands companies aren’t willing to make this bet, why should we?’ then I think that becomes problematic for them.”

Pourbaix stated the spending will are available later phases of those initiatives and that within the meantime, shareholders have to be rewarded.

Many of the Canadian oil and gasoline giants have opted to try this by way of company share buybacks.

That prompted the federal authorities to introduce a two per cent company inventory buyback tax to incentivize corporations to reinvest earnings relatively than reward shareholders.

But some advocates wish to see the federal authorities go additional.

Keith Stewart, senior power strategist with Greenpeace Canada, stated the truth that the business will not truly put cash behind their rhetoric on local weather change is an efficient motive to implement a windfall tax.

“They’re still waiting for the government to come and pay for them,” he stated.

This report by The Canadian Press was first revealed Jan. 25, 2023