Cenovus Sets ‘Aspirational’ Net-Zero Target, Pledges 30% Carbon Intensity Cut by 2030
Alberta tar sands/oil sands fossil Cenovus Energy is promising to cut its carbon emissions per barrel produced 30% by 2030, reclaim 1,500 decommissioned oil wells by the same year, hit “net zero” emissions by 2050, and expand its work with Indigenous businesses by C$1.5 billion.
CEO Alex Pourbaix said the new targets were intended to “position us to thrive in the transition to a lower-carbon future,” adding that “I’m confident we have the right business model and talent in place to achieve them.”
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
But “reaching the 2050 goal will require advances in technologies including carbon capture and storage that are not currently economically practical,” Bloomberg News reports, citing an interview with Al Reid, the company’s executive VP of environment, corporate affairs and legal. “But he said the company has a clear path forward to the 2030 target, adding the announcement is designed to draw the attention of both internal and external stakeholders.”
Reid admitted to CBC the 2050 target is “aspirational”, based on “technologies that are in a nascent state today that could allow that to happen,” even though “they’re not commercial today.” He said carbon offsets might also be a part of the picture.
“In an interview with The Canadian Press, Reid said the company is hopeful that its commitments—which include ramping up spending by $1.5 billion with Indigenous businesses—will help make peace with opponents and allow growth to take place,” CBC states.
“The impetus, to some extent, is political pressure,” writes the Globe and Mail’s Adam Radwanski, citing the connection to Canada’s current plan to cut emissions 30% by 2030 and hit net-zero by 2050. “More so, the pressure is financial. With environmental, social, and governance or ESG considerations increasingly factoring into investors’ decisions, Alberta’s oil producers are at risk of being badly starved for capital.”
The company’s plan “echoes Prime Minister Justin Trudeau’s promise during last fall’s federal election that Canada would cut its national GHG emissions to net zero by 2050,” Bloomberg agrees. “Cenovus said its 2030 emissions target will be reached via a multi-pronged approach including operational optimization, incorporating electricity cogeneration capacity into future oilsands phases, more use of solvent technology to reduce steam needed to produce bitumen, methane emissions reductions in its conventional drilling operations, and through increased use of data analytics.”
Bloomberg says the release drew a positive reception from financial analysts who saw it as an extension of Cenovus’ standing as one of the lowest-intensity producers in the tar sands/oil sands.
Pembina Institute Senior Analyst Benjamin Israel called the 30% intensity target “commendable”. He said it signalled the company’s “willingness to go beyond current government requirements in response to investor and market pressure”, sending “a clear message to Canadians and to governments that companies are ready and willing to accept more stringent climate policies.”
But reducing emissions intensity is still just a first step. “We’ve moved beyond the time of talking about oilsands’ emissions intensities to focusing on absolute emissions,” he said in a release. “Meeting Canada’s 2030 and 2050 climate commitments will require credible plans for substantial decreases in the oil and gas sector’s overall emissions as quickly as possible.”
Greenpeace Canada Senior Energy Strategist Keith Stewart said the announcement amounts to a “tweak” of Cenovus’ existing business strategy, adding that it doesn’t help much to hold emissions steady when Canada faces a looming deadline to reduce them. “I liken it to saying the captain of the ship has spotted the iceberg and has pledged to maintain course and speed,” he told CBC.
“What we should be hearing from Cenovus and from others…is, ‘We recognize we need to get out of the oil business. It’s not going to happen tomorrow. But we have to start planning for it now. And we have to start shifting our investments in that direction,’” Stewart added.
Israel and Stewart “both pointed out that plans to cut emissions in the upstream energy sector do little to reduce emissions in the downstream, where burning fuel creates more than 70% of the emissions,” Bloomberg adds.
Warren Mabee, director of the Queen’s Institute for Energy and Environmental Policy, told CBC the announcement showed fossils taking climate change and the need to decarbonize seriously. “Clearly, there’s more and more pressure on these companies to look at their carbon footprint and to start to come up with some real strategies to address those carbon footprints,” he said.