More than 120 leaders from nations worldwide have gathered at the 2021 United Nations Climate Change Conference, also known as COP26, in Glasgow to discuss how they can further abate climate change in the years to come.
So far, there have already been a handful of occurrences at COP26 that, if anything, should be good news for the most sustainable oil and gas producers on the planet -- like Canada!
Here are five significant takeaways from COP26 for Canadian energy, all further proof of why Canada should be a major global energy supplier of choice for decades to come. Also see:
- Canada Has a World-Class Record on Methane Intensities & Reductions: REPORT
- Canada Has Set the Bar High for Climate Action. Let’s Recognize That Fact.
- Canadian Oilsands the Best Choice for Future Supply: REPORT
#1 - Canada commits to more climate action on the oil and gas sector
Prime Minister Justin Trudeau formally committed to capping emissions produced by Canada's oil and gas sector while speaking at the 26th meeting of the Council of Parties to the UN climate convention, known as COP26.
"We'll cap oil and gas sector emissions today and ensure they decrease tomorrow at a pace and scale needed to reach net-zero by 2050," Trudeau told the convention.
"That's no small task for a major oil and gas producing country. It's a big step that's absolutely necessary," he continued.
The Prime Minister's promise to reach net-zero oil and gas emissions by 2050 sounds a lot like the commitments already made by Canada's major producers. Last June, the largest oil sands players – accounting for roughly 90 per cent of production – announced an unprecedented alliance to achieve net-zero GHG emissions by 2050. Since then, more companies have jumped on board, bringing the amount of oil sands production committed to net zero within three decades even higher. Now that's world-class!
Canada's oil and gas workers are committed to continually improving environmental outcomes and reducing emissions volumes and intensities even further. Learn more about what they are doing to maintain their leadership on climate action:
#2 - Canada mentions 1/5th of global emissions are covered by carbon pricing, but...
Prime Minister Justin Trudeau pointed out to world leaders that more needs to be done on carbon pricing if sufficient climate action is to be taken globally.
"We recognize right now that only about 20 per cent of global emissions are covered by a price on pollution," he said during a speech at COP26 in Glasgow, Scotland.
"We should be ambitious and say as of right here today that we want to triple that to 60 per cent of global emissions should be covered by a price on pollution in 2030," he added.
Trudeau also should have mentioned that Canada is one of the few global oil and gas producing jurisdictions with carbon pricing.
As of 2018, only 10.5 per cent of the world's oil production was subject to carbon pricing, with Canada accounting for roughly 4.5 per cent of that production according to joint sources that include the U.S. Energy Information Administration, World Bank and National Bank Financial.
Canada's continued pursuit of carbon capture and storage utilization projects as well as new cleantech and innovation being developed to reduce carbon emissions even further shows why our country should be a global oil and gas supplier of choice.
#3 - The U.S. admits the energy transition won't happen overnight
American President Joe Biden said that the world can't stop using oil and gas overnight while simultaneously asking OPEC+ to pump more of it, with the hopes of preventing surging energy costs from hurting working-class families in America further.
And, a few days later, Biden renewed his calls on OPEC+ to open up the taps.
"On the surface it seems like an irony," Biden said of simultaneously calling on major oil producers to pump more while at the COP26 climate change summit. "But the truth of the matter is ... everyone knows that idea that we're going to be able to move to renewable energy overnight and ... from this moment on, to not use oil or not use gas or not use hydrogen, is just not rational," he said.
Biden seems to be aware of recent projections for future global oil and gas demand.
The IEA's World Energy Outlook 2021 predicts that if the world continues on the way it is now, global oil demand will remain at above 100 million barrels per day (bpd) by 2050.
S&P Global Platts projects oil demand to peak near 2040 at around 111 million bpd before slipping to 108 million bpd in 2050 under a "most likely" scenario, some 3 million bpd lower than pre-pandemic forecasts.
Wood Mackenzie expects oil demand to return to pre-pandemic levels of around 100 million bpd in 2022 before growing to 107 million b/d by 2030.
#4 - The U.S. repeatedly asks OPEC+ to open up the taps
After shutting down the Keystone XL pipeline in January 2021, it seems ironic that President Biden is now asking OPEC+ to open up the taps for more oil and gas.
Keystone XL was an expansion that would have allowed the United States - our closest trading partner and ally - to source more responsibly produced oil from Canada. Instead, the U.S. has chosen to ask OPEC+ to open up the taps, producers with weaker protections for human rights and the environment when compared to Canada.
The truth is that of the world's top oil reserve holders, producers and exporters, Canada's performance on Environmental, Social and Governance metrics is world-class. In a world increasingly focused on sustainable supply chains and environmental outcomes, Canada's ESG record means we should be a go-to supplier of choice.
Going by the ESG-focussed investor standards of today, the world needs more Canadian energy – not less.
#5 - Some of the world's largest GHG emitters don't show up
Leaders of some of the world's largest GHG emitters did not show up to COP26, including China and Russia. Other notable absentees included Brazil and Turkey.
In its annual energy outlook, the IEA highlights the fact that the developing world – economies in Asia and Africa, for the most part – are largely responsible for the projected increase in fossil fuel demand over the next several years. According to the IEA, these nations will have to undergo drastic changes if the world is going to come close to accomplishing net zero emissions by 2050.
It seems the global energy crisis underway in parts of Europe, Asia and the Middle East has made some of these nations rethink their energy transition strategy. Take China, for example, who has reversed course on its transition to a lower-carbon future, instead opting for national energy security while announcing plans to build countless new coal-fired power plants.
China, Brazil, India and other major emitters must be on board if the world is ever to reach net-zero by 2050 in the fight against climate change. Canada can only do so much.
The World Needs More Canadian Energy
If there are any takeaways from the points made above, it's that the world needs more Canadian oil and gas – not less! As one of the most sustainable and responsible producers on the planet, our nation should be a go-to oil and gas supplier of choice. After all, more Canadian energy on global markets is good for Canadians and the global environment!
BC. First Nation and partners propose new $10B LNG project— Canada Action (@CanadaAction) August 2, 2021
✅ Project aims to be the largest net-zero LNG export facility in world.
✅ Global LNG demand expected to double by 2040.https://t.co/ulRm0FgdL9 pic.twitter.com/ltVTYWB5kT
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