Net-Zero Efforts of Canadian Oil Sands Companies Are Greenwashing

Last week, the developer behind the controversial Keystone XL pipeline pulled the plug on the $8 billion project that was slated to bring 830,000 barrels of crude oil sands a day from Alberta, Canada to the U.S. On the same day, a press release was issued claiming Canada's largest oil sands producers have formed an alliance to reach net-zero greenhouse gas emissions from oil sands operations by 2050.

"Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy and Suncor Energy formally announced today the Oil Sands Pathways to Net Zero initiative. These companies operate approximately 90% of Canada’s oil sands production," reads the press release. "The goal of this unique alliance, working collectively with the federal and Alberta governments, is to achieve net zero greenhouse gas (GHG) emissions from oil sands operations by 2050 to help Canada meet its climate goals, including its Paris Agreement commitments and 2050 net zero aspirations."

The plan is to gather up all the carbon dioxide from their operations and pipe them all to "a carbon sequestration hub" where it will be put into a Carbon Capture Utilization and Storage system (CCUS). There are also plans to play with "clean hydrogen, process improvements, energy efficiency, fuel switching and electrification."

It all sounds like a very big deal, "unprecedented" if you listen to the press release. Yet in Canada's national newspaper, The Globe and Mail, it barely made the news, jammed into the second half of a story that starts with more fashionable hydrogen. It's hard to find anyone covering it.

That's probably because it is a giant pile of nonsensical greenwashing.

The key reason for all the ignoring and eye-rolling is the phrase in the press release where they are talking about "emissions from oil sands operations." Those are what are called Scope 1 emissions, defined by the EPA as "direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles)." Scope 2 emissions are "indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling"—not on site, but directly involved with operations.

In the oil sands, that means all the fossil fuels burned to boil the bitumen or whatever other method they use to separate the oil from the sand. It is a lot better than it used to be, but it is still as much as three times as high as conventional oil sources.

It totally ignores Scope 3, the actual burning of fossil fuels in cars or wherever else it is used. According to the famous Carbon Majors Report that everyone quotes when they want to blame 100 companies for 70 of global emissions, Scope 3 emissions are 92.6% of their total emissions. Scope 1 and 2 will be much bigger for oil sands because its production has such a high footprint, but Scope 3 will still be the major proportion of its footprint.

But if Canada is actually going to meet the Paris commitments made by the Canadian government, you can't ignore Scope 3.

The press release notes the project "is ambitious and will require significant investment on the part of both industry and government to advance the research and development of new and emerging technologies." That's because the technology for CCUS at this scale doesn't exist, and those companies that complain so much about green subsidies suddenly want green subsidies.

Instead of investing in this, the government has to invest in getting people out of gas-powered trucks and houses—the world has to stop buying what the oil sands companies are selling. Their market has to disappear, and it is likely going to.

The industry says that even if cars go electric, there will still be a market for their products, noting that "even electric cars need lubricants." And then, of course, there are plastics. But this is a minuscule fraction of what is burned in engines and furnaces, and why would anyone use some of the most expensive oil in the world, which will probably double in price if you add in carbon capture, these are expensive processes.

The consensus of the International Energy Agency report was that at some point, the only people pumping oil will be the Saudis because theirs is the cleanest and cheapest and they have more than enough for all our lubricant and non-disposable plastic needs. The U.S. will no doubt keep pumping for "energy security" reasons. But almost everyone else is going to be priced out of the market in a world awash in production but significantly less consumption.

Perhaps this whole pathway to net-zero consortium was just a publicity ploy to minimize the Keystone XL cancellation damage. Perhaps they continue to believe that as long as the world ignores the difference between Scope 1 and Scope 3, they can ignore 80% of their emissions and nobody will notice.

But as my colleague Sami Grover noted, the recent court decision ordering Royal Dutch Shell to cut its carbon dioxide emissions by 45% by 2030 from 2019 levels "applies not just to Shell’s own operations, but emissions from the burning of their products too"–that's Scope 3. The only way to do that is to stop selling the stuff.

Canadian activist Tzeporah Berman called this alliance "absurd." I called it "nonsensical." It seems that everyone else is just ignoring it. That might have been a better approach for Treehugger.