Ottawa -
Canada's massive oil corporations are making document income this yr and needs to be utilizing a few of that further money to spend money on issues that curb their greenhouse gasoline emissions, Setting Minister Steven Guilbeault mentioned Thursday.
His remarks come every week after Cenovus CEO Alex Pourbaix instructed analysts throughout an organization convention name that a new federal tax credit score is not ok to persuade the foremost oilsands producers to begin constructing a proposed carbon seize and storage venture.
Carbon seize and storage traps emissions at their supply and funnels them again underground or into merchandise that may completely retailer them, similar to cement. The expertise is controversial, with many local weather scientists arguing its unproven, costly and permits fossil gas manufacturing to proceed.
The brand new refundable funding tax credit score launched within the latest federal price range is value 50 to 60 per cent of the funding for carbon seize, and 37.5 per cent for transportation, storage or use of the emissions.
Initiatives that go to enhanced oil restoration -- the place the captured emissions are used to squeeze extra oil out of the bottom -- will not qualify.
The tax credit score will present an estimated $2.6 billion over the subsequent 5 years, and $1.5 billion yearly after that till 2030.
Final yr the Canadian Affiliation of Petroleum Producers requested Ottawa to design the tax credit score so it pays for 75 per cent of the price of carbon seize initiatives.
Pourbaix mentioned the industry will want greater than what was supplied to maneuver on the investments.
However Guilbeault mentioned in an interview Thursday that is not going to occur.
"We cannot be placing even an increasing number of cash on the desk," he mentioned. "They've to speculate as effectively."
He mentioned Pourbaix's feedback are disappointing and that it is time for industry to come back to the desk to point out what it plans to speculate to guard its future in a world the place demand for oil and gasoline diminishes -- and demand for unabated oil and gasoline diminishes quicker.
"We need to spend money on your sector to make sure that the sector and staff nonetheless have jobs, 10, 15 years from now, when an increasing number of, the world will likely be shifting towards a low-carbon future," Guilbeault mentioned. "So we're placing our cash the place our mouth is, and we expect that they need to do the identical."
And he mentioned they've the cash to do it. The identical day Pourbaix talked in regards to the tax credit score, Cenovus reported its greatest first-quarter revenue ever, of $1.6 billion. A yr in the past, income had been $220 million.
Cenovus has not but responded to a request for remark.
The corporate isn't alone, with the worth of oil being pushed up by the battle in Ukraine, pandemic-related provide chain points and surging demand as pandemic lockdowns ease. Imperial Oil reported first quarter income of $1.17 billion, its greatest first quarter in 30 years. On Thursday, Canadian Pure Sources Ltd. reported income of $3.1 billion, in contrast with $1.38 billion a yr in the past.
"These corporations are making document income, they need to be investing a few of them into guaranteeing that they've a future," Guilbeault mentioned.
Final week, Pourbaix mentioned oil costs rise and fall so choices about investing in carbon seize cannot be primarily based on present costs.
"Oil costs proper now are clearly very enticing, however we all know most likely earlier than that venture is ever in service, we'll most likely take a look at the underside finish of these costs once more," he mentioned.
The oil and gasoline sector produced greater than one-quarter of Canada's whole emissions in 2020. Ottawa is at present estimating the sector should lower its emissions virtually 40 per cent from 2020 ranges by 2030 if Canada is to satisfy its present emissions goal.
An RBC evaluation launched final week mentioned slicing oilsands emissions 40 per cent by 2030 will price between $45 billion and $65 billion.
Guilbeault mentioned the industry has invested to chop its emissions. Though manufacturing will increase imply total emissions have risen, emissions per barrel are down 11 per cent between 2005 and 2020 industry-wide, and within the oilsands alone they're down 12 per cent.
"So that they have invested in effectivity over the previous few years and various," he mentioned. "I believe the query now's, is it sufficient? And the reply to that's clearly no."
Earlier this yr, greater than 400 local weather scientists wrote to Finance Minister Chrystia Freeland urging her to not proceed with the tax credit score as a result of the expertise is unproven, costly and a large subsidy to the oil and gasoline industry.
At a committee listening to in Ottawa earlier this week, NDP MP Laurel Collins demanded Guilbeault hear that plea.
"That is completely the incorrect course," she mentioned. "Why are you not listening to them?"
This report by The Canadian Press was first printed Could 5, 2022.
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