Canada’s oilsands industry is well-positioned to be a reliable, sustainable source of crude oil for decades to come says a newly released report by BMO Capital Markets. Survivor Canada: The Unparalleled Position of Canadian Oil in a Transition Challenge lays out several facts and figures showing concrete evidence as to why the oilsands sector should be a go-to supplier of choice for global consumers.
Oil and gas producers around the world are now facing increasing pressure to reduce greenhouse gas (GHG) emissions and commit to a net-zero pathway, and Canada’s oil sands are “…in a unique position to do so given its strong emissions improvement track record, leading R&D and collaboration, and emissions sources that are well-suited carbon capture,” says BMO. And with recent projections from the International Energy Agency, Columbia Center for Global Energy Policy and other trusted sources suggesting that global demand will continue growing past pre-2020/21 crisis levels for many years yet, it's a no-brainer that we get that oil from the most sustainable producers on the planet.
Here are several facts from BMO's latest ESG-focussed report showing why Canada should be a global oil supplier of choice for decades to come. Also see:
- Canada’s Oil Sands Sector an ESG Leader: Report
- Experts Warn of Looming Oil & Gas Supply Shortages Post 2021
- Canada’s Largest Oil Sands Producers Commit to Net-Zero Emissions by 2050
Canadian Oilsands ESG Trends: 15+ Facts
> Among the world’s top oil reserve holders, Canada continues to rank number one for Environmental, Social and Governance practices
> Oil sands emissions intensity has decreased by 44 per cent since 1995
> Since 2013, reported intensity among oil sands companies has dropped 23 per cent versus 13 per cent for global Majors
> Oil sands now emit just 4 to 5 per cent more than the global average crude over the life cycle from production to end-use, with several projects reflecting below-average footprints
> Oil sands producers, on average, have reduced freshwater intensity by roughly 7 per cent per year since 2014 versus 3 per cent for global Majors
> Oil sands producers are leaders in water recycling, averaging 82 per cent of water use in 2019 versus 29 per cent for U.S. senior oils
> Average oil sands GHG intensity could improve 20 to 30 per cent with the application of planned innovations
> The Canadian oilsands industry continues to be a leader in technology development and deployment, with collective R&D totalling a record $1.6 billion in 2019, a meaningful increase versus $1.2 billion in 2018
> Over 90 per cent of future oil sands emissions are ‘capturable’ using carbon capture utilization and storage (CCUS) “...given the highly concentrated nature of stationary point sources, abundant high-quality storage options in Alberta, as well as advanced carbon infrastructure, carbon management expertise and regulatory systems in place.”
> Canada is the third-largest operator of CCUS globally and one of few countries with enough storage to achieve net zero using CCUS methods by 2050, with roughly ~400 gigatons (GT) reflecting >65x industrial output to 2050
> Bitumen is well suited for use in the manufacturing of asphalt, carbon fibre, vanadium and other products, of which are seeing increasing global demand from rising global mobility and infrastructure investments
> Anywhere from 20 to 30 per cent of bitumen supply from the oil sands could be diverted away from fuel, eliminating downstream and end-use GHG emissions and increasing the product value from 3 to 5x – possibly a >$80 billion a year vs. just $30 billion currently generated from fuels
> Oilsands projects have inherent sustainability advantages, with “…limited decline, replacement risk and sustaining costs, as well as much lower land and water footprints for SAGD”
> Injury frequency rates have fallen by about 60 per cent since 2013 to a new record low in 2019
> Community investment by oilsands companies increased to $93 million in 2019, averaging more than $80 million a year since 2010
> Oil sands producers have spent $15 billion with Indigenous-owned businesses since 2012 with record spending of $2.6 billion in 2019
Why Sources of Supply Matters
Public pressure on government and industry to take action on climate is increasing drastically in many parts of the world. And while this pressure is mounting on oil producers especially, there is also a widening supply gap that threatens to upheave global energy markets and create massive shortages for consumers over the next several years.
BMO estimates that global production declines (averaging ~6 per cent a year and without any new greenfield investments) translate to a supply gap of as much as 350 billion barrels through to 2050. This outlook presents the investment community with an important decision to make, as “…oil companies with the most sustainable practices are best positioned to absorb an increasing share of new production that will inevitably be needed – even in a net zero outcome.”
Give, for example, the chart below showing that of the world's top oil reserve holders, Canada ranks number one in all categories (environmental, social, governance, weighted evenly via three reputed indexes):
Top Oil Reserve Holders ESG Ratings - BMO Capital Markets
Sustainabile products and supply chains are of greater importance for many consumers today than ever before as they become increasingly conscientious of what companies to support with their hard-earned dollars. This ‘environment-first’ approach should also apply to oil markets.
Canada, with its world-class performance on ESG metrics and inherent sustainability advantage, is well-positioned to play a key role in the global energy transition to a lower carbon economy and any ‘investment’ scenarios that play out in the years ahead.
Canada's largest oil producers are some of the few in the world currently committed to net zero by 2050, possible through continued deployment of newly developed innovations/technologies, the use of carbon capture and storage and other emission-reducing methods over the next three decades.
Supporting the Right Kind of Producer
ESG ratings entail the performance of a given nation across a full spectrum of factors, including (but not limited to):
- Environmental policy
- Social progress and welfare
- Political stability
- Regulatory oversight
- Corporate governance
Too often is the discussion focussed on just the ‘E’ in ESG, and not also the ‘S’ and ‘G’ – factors that are just as important when evaluating the attractiveness of sources of supply for oil, gas and other natural resources.
Top Oil Producer 'G' in ESG Ratings - BMO Capital Markets
Canada’s standards for accountability, regulatory discipline and corporate oversight (see charts) are rated much higher than most other major energy-producing countries around the world.
With strong governance in Canadian companies comes a strong focus on ESG performance, values that are cascaded down through the organization from leadership. According to BMO, “…this is an important competitive advantage for Canada, and strongly supports its ability to play a key role in meeting the world’s extended demand for sustainable crude oil supply longer term.”
The same cannot be said for several other major producers who have absolute abysmal records when it comes to upholding regulatory transparency, environmental protections and human rights.
The evidence is in, and it's clear that Canada's oilsands would be the best choice moving forward in an increasingly 'environmentally focussed' world where acquiring products from sustainable sources matters to consumers more than ever before.
Who would you choose as a go-to source for future oil supply? We say Canada, and so should you!
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BMO's facts and figures regarding Canada’s world-class performance on ESG metrics versus other major oil and gas producers are prime examples of why our nation should be a global supplier of choice for decades to come!
Yes, there is always more room for improvement on reducing environmental impacts, but as it stands, Canada is one of the most environmentally conscious producers on the planet and should be rewarded for that with more attention from ESG-focussed investors.
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If those opposed to Canadian pipelines knew about our global environmental leadership AND the necessity of oil and gas, would they change their minds? #CanadianEnergy#ClimateAction #MoreCanada https://t.co/JFOrTTiNA3 pic.twitter.com/8dtIPN2gzJ— Oil Sands Action (@OilsandsAction) June 20, 2021
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