Building On Success Key To Canada Winning Sustainability Race, Say CEEA Conference Speakers
Canada’s oil and gas industry is well positioned to supply the world with secure, affordable, low-carbon energy, panel members at the Canadian Energy Executive Association’s (CEEA) annual Oil & Gas Beyond Boomers conference in Calgary told a packed house at the Calgary Petroleum Club.
But winning the race to a net-zero future will require a monumental effort to shift thinking within and outside the industry, to collaborate on innovation to drive technology into the field, and to ultimately create a new narrative around energy and the environment in Canada, the audience of almost 270 industry executives, Indigenous representatives, and future leaders heard.
Fortunately, Canada has a head start in the race to fuel a sustainable future, said Ellis Ross, a British Columbia MLA and strong Indigenous advocate for resource development in his province.
“We’re not starting from scratch,” said Ross, pointing out both B.C. and Canada have some of the highest environmental standards for project development in the world. While the standards represent a floor to build upon and not a ceiling that has been reached, Ross said, “the floor is pretty high.”
Indigenous perspectives towards resource development have also advanced, he added. His own personal story tracks this change in thinking. Ross said when he was younger he opposed all resource development in his Haisla Nation, believing development wouldn’t respect Indigenous land title rights, that environmental standards were lacking, and the economic benefits would be limited.
“I was fed the wrong narrative,” he said. After working with industry as a Haisla council member his perspective changed. The Haisla partnered with industry on forestry and mining projects with high environmental standards that built prosperity in the community. All this led up to its partnerships with the massive LNG Canada project, currently under construction.
The impact on his community has been profound, he said. The old narrative that young people faced a future of poverty, life on the streets or in prison has been replaced with a new narrative of jobs, business start-ups and opportunity. Young people are now travelling the world, rather than down the wrong path.
“There is opportunity here — the promise of a good life,” he said.
Ensuring that promise is fulfilled, however, is going to require changing the conversation within the industry and outside the industry, Ross said. As a start, those working in the industry have to communicate a positive message on sustainability.
“We are leading in North America,” he said. “There is more to do but we have to get this message out to the public. We shouldn’t be ashamed of what we do. We need to tell the world you should follow our lead.
“We’re at a momentous time in history. There is going to be a major shift in terms of energy,” he added. “First Nations are already there. The question is does Canada want to be part of it. We can help out the world and help ourselves.”
‘The narrative has changed.’
How the Canadian energy industry thinks about itself can impact how the outside world views it, and prevent it from adapting to changing circumstances, said Todd Hirsch, vice-president and chief economist at ATB Financial.
“You can get trapped in narratives that limit your going forward,” Hirsch explained. This includes doing things the way they have always been done without a practical understanding of why those processes exist and whether they remain valid. To break out of the existing, often negative, narrative surrounding oil and gas and the environment, Hirsch suggested oil and gas leaders focus on unleashing the creativity of its workforce to challenge the old way of doing business and to take advantage of new opportunities in emerging energy systems.
“The narrative has changed. Creativity and innovation drive wealth,” he said. “The oil and gas industry is not short on creative and innovative ideas.”
Carbon capture and storage, creating new products from carbon emissions, non-combustion uses of bitumen, and blue hydrogen production from natural gas are just some of those new ideas.
“It’s commonsense that it can’t be one solution. It has to be all the solutions together,” said Hirsch. “We have to focus on all — carbon capture, renewables, hydrogen, bitumen-beyond-combustion — all at the same time and quickly. We don’t have the luxury to discount any of these options.”
“There is lots of technology solutions,” agreed Rebecca DeMott, a GHG engineer, Regulatory Affairs, for Canadian Natural Resources Limited, adding energy efficiency, electrification and direct air carbon capture to the list.
DeMott works with the Oil Sands Pathways to Net Zero alliance, leading the technical group in charge of carbon dioxide storage as well as providing project management support and facilitating collaboration between different project teams. The Pathways initiative is driven by six oilsands producers representing 95 per cent of production who are focused on developing an executable plan to drive emissions from production to net zero by 2050. Its fundamental project is to build a 400-kilometre CO2 pipeline from the Athabasca oilsands region to the Cold Lake region where the CO2 will be stored in reservoirs. It is part of a broader goal to capture and store emissions from the entire oil and gas industry and other heavy emitting industries in Alberta.
The Pathways initiative’s carbon capture and storage project has a lot of advantages in meeting the net-zero challenge, said DeMott. Industry has experience with carbon capture and storage and knows it works, and with government support the project could be up and running by 2030. There is no other technology available at this current state of readiness. It also provides opportunities for other developments like blue hydrogen that will require capture and storage in the future.
“It will keep Canada’s oil and gas industry competitive and sustainable,” she said.
Winning the bigger race
Alison Cretney, managing director of the Energy Futures Lab, The Natural Step Canada, said while achieving net zero in oil and gas production through technologies like carbon capture is important, it is only part of the story. Over 80 per cent of emissions come from consumption, and those emissions need to be addressed as well.
“There’s a lot of attention on production and operations,” she said. “But the industry needs to win the bigger race.”
Investment in alternatives to oil and gas like EVs and renewables is rapidly expanding, with around $130 trillion being invested in net zero and sustainable finance. There is a commitment to transform the global economy with net-zero pledges covering all fronts, she said. “That 80 per cent is huge and a much bigger prize. To win it, oil and gas needs to look for diversification that builds on its strengths.”
Cretney said collaborative efforts like bitumen beyond combustion, which turns the disadvantage of high carbon content in oilsands production into a strategic advantage through creating non-combustion products, are fundamental to that diversification.
“There is $50 billion in annual revenue at scale,” she said.
Hydrogen and other zero emissions energy carriers that can be used for heavy freight transportation and to supplement natural gas in heating and electricity production also have huge potential.
“Alberta has strategic advantages,” she said, pointing out it already has operating commercial hydrogen production and carbon capture and storage facilities, and it is working on carbon-based products and producing byproducts such as lithium or vanadium from oil and gas production. “But [Alberta] needs to act fast. It’s easy to disregard these opportunities and focus on the present. It needs to make sure as it tackles production emissions to not forget about the larger opportunities. It’s like the oilsands decades ago. People said it couldn’t be done but through the combined efforts of industry and government it happened.
“We need a whole suite of solutions,” she added. “It’s not oil and gas versus renewables. We need a lot of winners.”
First Nations communities can play a lead role in building on Canada’s oil and gas legacy to win the race to net zero, said Cliffton Cross, a Frog Lake First Nations council member. Oil development has paid the bills and provided jobs in the community for the last 25 years, he said, and they are now ready to lead the next generation of energy development.
Like Energy Futures Lab’s Cretney, Cross said he believes the future lies in taking a holistic approach to solving the industry’s challenges in winning the race to net zero. This includes finding new technology solutions and continuing development of existing technologies.
Industry needs to take full responsibility for its emissions throughout the lifecycle of its products and it needs to be written into development agreements at the start of the process, Cross said. “If you want to drill eight wells make sure you have the GHG technology to put [carbon] back in the ground.”
“You can’t just pull carbon out of the air,” he added. “We need new technologies and innovation.”
The Frog Lake First Nations has been working with educational institutions on a variety of technologies to drive future economic growth while driving down emissions. It has developed a plan it calls LEAP (Legacy Energy, Alternative Power) to capture these opportunities. The plan includes the development of a hydrogen hub, carbon capture facilities, and unique renewable developments like vertical wind generation. It is also working on hemp building technologies. The goal is to ensure every structure it builds is net zero.
Frog Lake is also working alongside other Alberta First Nations developing projects, but Cross said to be successful everyone needs to be on board, adding that, “Indigenous and non-Indigenous are two sides of the same coin. The grand design is to make sure Indigenous people and non-Indigenous people are aligned and engaged as partners.”
Working with governments and the public
Working collaboratively on technological or process solutions to win the race to net zero is one thing, getting governments and the public on side to support the effort is another issue entirely, said Michael Binnion, president of Questerre Energy Corporation and moderator for the Oil & Gas Beyond Boomers panel discussion. Questerre presented the Quebec government with a net zero plan for a natural gas development that would see it own all emissions throughout the lifecycle of the project. In response, the Quebec government banned oil and gas development. Getting around this entrenched negative view of oil and gas is a significant challenge in reinventing the industry, he noted.
British Columbia is facing a similar issue when it comes to natural gas development, said MLA Ross, adding there needs to be a change in governments’ understanding of energy choices. Ross is concerned recent comments by the B.C. government on future LNG development could shut down the sector. Other countries like Venezuela that let politics or ideology rather than facts direct energy development choices have suffered severely.
“We now see Germany in the same boat. Energy underpins what is happening there. Energy underpins everything,” he said of the high prices for natural gas and power currently hitting across Europe due to Russia’s invasion of Ukraine. “We’re headed the same way. Now is the time for leadership, not politics and ideology.”
Convincing both governments and the public that industry is sincere in its push to reach net zero is a challenge, all the panelists agreed.
“Engineers transform economies and that will change minds,” said Frog Lake’s Cross. “But we can’t keep talking about it, we need action.”
Industry needs to change its narrative away from a confrontational approach and talk to people to better understand their worries about climate change and the oil and gas industry’s approach to managing it, said Energy Future Lab’s Cretney. This doesn’t mean another in a long line of public relations campaigns, she added. “It needs to create stories that draw people in.”
There are also questions around what the new narrative around oil and gas and net zero should focus on and who is best positioned to deliver industry’s message.
During roundtable discussions between industry executives and future leaders following the panelist presentations there was debate on both issues. Most groups said the energy transition was inevitable and industry needs to position itself as a solution to climate issues like emissions across the global economy.
“Carbon capture technology is not necessarily just a fossil fuel solution,” said one group. “It’s going to be used by other industries. And it’s only one of the tools that can be used in fit-for-purpose solutions in all industries. We have the experience and technology in place. We have to show we are the solution.”
The Canadian oil and gas industry also has to position itself as an affordable low-carbon energy solution in global markets, said another group. “What about countries that still want the energy we have today?” it asked. “Where are they going to get their energy?”
Few in the audience said Canadian oil and gas executives are well positioned to make the case that industry has the technological know-how and can lead the energy transformation.
“The oil and gas industry is never going to be a trusted messenger on this topic,” said one table. “We need governments, First Nations and other interests to showcase technology on our behalf.”
“We need new perspectives,” said another group. “CEOs have been the mouthpiece but we need to hear from everyone else. We need to get out of our media echo chamber. We need to talk to family and friends. It can’t be us against them. And we need action.”
The CEEA’s annual Beyond Boomers event brings together young professionals, senior executives, Indigenous groups and other stakeholders to challenge mindsets and build alignment around key issues facing the industry. Partners in this year’s event included: Young Women in Energy; Calgary Petroleum Club Young Professionals; Canadian Heavy Oil Association-Developing Professionals; Canadian Society of Exploration Geophysicists Emerging Professionals Program; Young Professionals in Energy; World Petroleum Congress Future Leaders; Society of Petroleum Engineers Young Professionals-Calgary Section; and Modern Miracle Network.