For a sector that likes to talk about how innovative and entrepreneurial it is, Canada’s oil and gas industry sure offers a lot of reasons why it can’t decarbonize its production. The latest example of this can’t-do-attitude comes from the Canadian Association of Petroleum Producers, which commissioned a report that — surprise! — concludes the federal government’s emissions cap will be ruinously expensive.

In total, it suggests the cap would cost the country’s so-called “conventional” oil and gas industry — the part that doesn’t include the oil sands — 51,000 jobs and $247 billion in GDP by 2035. This comes on the heels of a similarly fanciful report funded by the Alberta government that put the total cost closer to $1 trillion. Both reports are excellent data points in support of Mark Twain’s dim view of statistics, and both are shaped by assumptions, presumably directed by the organizations funding them, that have no resemblance to reality.

Let’s start with the S&P Global analysis funded by CAPP. It starts from the assumption that Ottawa plans to impose a “stringent 40 per cent emissions cap by 2030 relative to 2021” and that this would lead to a 17 per cent decline in conventional oil and gas production by 2035. In reality, the most recent draft of the proposed regulations would put the ceiling at somewhere between 131 and 137 megatonnes of carbon dioxide, which is 20 to 23 per cent below 2021 levels.

That’s not the only red flag in the S&P Global report. Its reference case projects no meaningful reductions to overall emissions by 2035, and of the $519 billion it sees being spent between now and 2035 by the conventional oil and gas industry, almost none of it goes towards decarbonization efforts. For an industry that continues to insist it will get to net zero by 2050, this is a pretty major tell.

The federal government, for its part, isn’t having any of this silliness. “CAPP has commissioned an analysis of a non-existent scenario,” says Oliver Anderson, the director of communications for Minister of Environment and Climate Change Steven Guilbeault. “Everything in it flows from false assumptions that make it so deeply flawed, it amounts to disinformation. It does not at all reflect the most recent framework we recently released in December, and the extensive consultation that went into that draft, including a range of compliance flexibilities to ensure the cap is technically feasible.”

This is hardly the first time that the oil and gas industry or its political proxies have paid someone to bend reality to its desired dimensions. The report commissioned by Alberta’s government also relied upon a selective presentation of the facts in order to reach what feels like a pre-determined conclusion — one that again exposes the industry’s true intentions.

As the Pembina Institute’s Janetta McKenzie noted in her analysis of the report, it doesn’t actually include any of the decarbonization projects that industry keeps saying it definitely intends to build. “This means the oilsands Pathways Alliance consortium’s proposed carbon capture and storage project, which the Government of Alberta itself regularly cites as an example of decarbonization work taking place in the sector without the need for an emissions cap, is not accounted for.”

And when it comes to the headline-grabbing $1 trillion in potentially lost GDP, it’s based on the Conference Board’s “least ambitious scenario on methane abatement, which the Conference Board itself states is the least likely scenario.” That’s not the worst of it, either. According to an internal analysis by Environment and Climate Change Canada (ECCC) obtained by Canada’s National Observer, the figure is rooted in some deeply dubious math: “It is the sum of projected GDP impacts in nominal terms from 2030 to 2040,” the ECCC briefing note says. “Providing a cumulative estimate for future years based on nominal values is uncommon and inflates the appearance of the impact by presenting the effects of inflation as a cost of the policy. This effect is compounded by the [Conference Board]’s use of a high rate of assumed inflation between 2030 and 2040 of about 7%.”

Nobody — and I mean, nobody — is assuming seven per cent annual inflation between 2030 and 2040. That the Conference Board chose to use that figure in its analysis would seem to reflect a desire on the part of its client to have the report generate a headline-grabbing figure, one that Canada’s right-wing online media outlets were more than happy to share uncritically. Indeed, it’s almost like that was the point from the very beginning.

What those outlets didn’t talk about, of course, was the fact that all of this supposed economic carnage could be avoided if the industry simply got down to the business of reducing emissions. “These results are presumably driven by the assumption that the sector will not be able to decrease its emissions intensity at a rate greater than historical trends,” the ECCC analysis says, “which results in production cuts being the primary means of compliance.”

The Canadian Association of Petroleum Producers claims the federal oil and gas emissions cap will be ruinously expensive. One small problem: the report is based on a false emissions reduction target. @maxfawcett writes for @natobserver

Once again, a report that supposedly shows why the federal government’s emissions cap is unworkable ends up demonstrating why it’s needed. The oil and gas industry and its political proxies can keep commissioning deceptive reports that assess the impacts of policies that don’t actually exist on an industry that apparently refuses to act. But Canadians ought to think long and hard about how this compares to the promises these companies and politicians make, and whether it’s even worth listening to them anymore. At some point, it’s time to put up or shut up. I’d say we’re already there.

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As Voltaire (a prolific 18 century writer) wrote; «Mentez, mentez, mentez, il en restera toujours quelque chose!»

Agreed that it's past time now. Great article Max.
The newly bold ramping up from otherworldly arrogant big oil revolves in part around the rock solid certainty that climate change is nothing REALLY, just more "wokism" with the reprieve immanent, at the next federal election. This certainty is personified by Danielle Smith whose "numbers" (along with the UCP) have astonishingly NOT flagged one year on from the provincial election.
But in keeping with this ongoing bizarro reality, aren't we now starting to wonder if the pollsters are ALSO in the grip of the right wing? How long can we can keep telling ourselves that oh, that can't be, or they just don't KNOW, like the ever-waffling media and all those persistent supporters/cultists, but when push comes to shove people will "come to their senses." I'd say time's also up on what amounts to OUR delusion.
Maybe Trump's conviction will move the needle; with all those guns down there surely it's only a matter of time until they start using them. Violence has a way of galvanizing situations like this.

There is one way in which I understand the oil people's reluctance to get serious about putting in their much-touted carbon capture stuff. The thing is that, as many here have often pointed out, even if they did and it worked, it wouldn't help much. All the cars and homes and industrial processes etc. etc. would still be emitting when they used the fossil fuels. All that is going to have to change; the DEMAND for fossil fuels is going to drop, eventually to zero, whether they do carbon capture or not. Even without climate change, electrification is better technology for a pile of reasons, so fossil fuel extraction is going to largely go the way of the horse-drawn carriage industry.

So in their last hurrah, their final attempt to extract as much windfall profits as possible before the end, why would they want to be spending billions of dollars on a pointless technology? There were only ever two points to CCS: getting some carbon dioxide to inject in old oil wells to get some more out of them, and playing pretend to try to stave off real climate action as long as possible. Actually installing it throughout their industry was never in the game plan, and in fact at this point investment of any kind is not in the game plan . . . oil industry investment has dropped through the floor just in the last few years, because after all what's the point?

At this point they're all about slowing change down by a year, two years, as many as they can squeak out to grab a few more billions, and every billion spent actually doing carbon capture is one less billion to distribute to shareholders and CEOs before it's time to turn the lights out and the pumps off.

To that point, if you haven't seen this already....

Well said Rufus!!!

CAPP et al are slinging BS, albeit in the guise of "respectable" studies written by suits that are based on easily debunked fudged numbers. This is standard practice for CAPP which produced a report in 2015 backing the TMX which was also based on exaggerated numbers and wishful thinking that were subsequently dismantled by economists and analists who know their stuff. It all came true years later as the final tally arrived at 34 billion dollars.

Canada cannot afford many mistakes like that any more. It's time for a najor study into the true costs of subsidizing a polluting sunset industry.

Meanwhile, California, the primary destination for TMX oil tankers, has very recently acheived a milestone on renewables. According to Renew Energy, the state (pop. 40 million) has turned a corner and virtually eliminated fossil fuels from the grid during the largest evening peak when they were dominant just 12 months ago. Wind, solar and hydro power were producing excess power then, and the price often dipped into the negative. This sparked (pun intended) a major buildout in very large banks of batteries in the state grid to store the cheap daytime surplus power for use during the evening. Sharp, sudden reductions in firing up their gas peaker plants occurred, and that has fossil fuel outfits worried, especially about the speed at which they are being replaced. California follows some Australian states in the very quick buildout of battery-backed renewable energy to become the dominant grid power that bunted gas and coal off the grid in months, not years.

California is also tops in an increased rate of EV adoption, which of course brings on more power demand, but also created a huge fleet of mobile batteries plugged into the grid via net metering to smooth out the peaks and valleys. This in turn redirects liquid petrol demand into a downward spiral in one of Alberta's primary export markets.

The grid battery seems to be the fourth and final nail in the petro coffin, following wind, solar and hydro. As Alberta reinforces its fossil wall in futility against a transitioning world, it is also ensuring its fall will be sharper and deeper. There will be no joy in that, but at least there is a chance its oil-saturated delusions and wishfull thinking, now tainted with extremist religion and conspiracies emanating from its puppet leaders, will be eroded. The evidence is now building that that may occur at a dizzying speed.

The only positive outcome from a forced transition is that the absence of delusion creates a vacuum that can then hopefully be filled with intelligent planning.

There's another nail, maybe. I mean, maybe it's just hype, but this new heat-storing brick technology seems like it has big potential in an area that was maybe trickier to decarbonize than I realized. Seems like a lot of heavy industry depends on getting things REALLY HOT, and electricity was surprisingly not that good at delivering that. I figured the technology that gives us arc welders would be decent at making things hot, but apparently not. So these guys made these brick things; they're ceramic so they can handle those ridiculously high industrial temperatures, but they have conductive metal oxides in 'em so you can use electricity to heat them up. You can blow air across them and bingo, superheated gases to use in these industrial processes; they can apparently replace a lot of coal and natural gas furnace setups, and potentially fairly cheaply without too much drastic retrofitting.

There was a story here just a few days ago about it, lessee . . .

Again, early days, could be hype, but it sounds pretty solid. If it proves out that's a previously stubborn chunk of emissions that could be blown away.

I've read about this hot rocks tech as well. It may not exactly be a nail in the coffin of dinosaur juice, but it's certainly worth several hammer blows.

The question is why does anyone believe anything from the oil and gas industry. They've been caught over and over again lying and spreading misinformation. The fact they're not challenged much, show's how much of a captured petro-state Canada is. When people talk about foreign interference in Canadian politics, the top of the list should be the fossil fuel industry but it isn't.
Carbon capture is a bad joke, they're only talking about emissions captured in production. They never talk about consumption. And even then it's never going to be viable. As Saul Griffith states in his book Electrify, it would be much less expensive and practical to just electrify everything.
TMX, Kitimat and the tar sands are going to be white elephants very soon and the Canadian people will be holding the bag. The oil and gas industry will have left with all the money.

Heartily agreed with all of that.

Great comment!!

Why do I get feeling Big Oil is one big con job and is so big they are ungovernable. Like Big Pharma, Big Grocers, Big Agriculture.