As a major economic contributor to the country and Canada's largest source of greenhouse gas emissions, the oil and gas sector has a critical role to play in meeting Canada's climate objectives. To remain competitive in a global market that is moving away from fossil fuels combustion to address climate change and enhance energy security, new Canadian oil production subject to federal impact assessment will have to meet even higher standards. New projects would have to deliver emissions performance-the amount of greenhouse gas pollution it takes to produce a barrel of oil or cubic metre of natural gas-that is best in class, and all future oil and gas projects would have to be net zero by 2050.
Today, the Minister of Environment and Climate Change, the Honourable Steven Guilbeault, announced plans to develop guidance that will require proponents of new oil and gas production projects subject to a federal impact assessment to demonstrate that they will have "best-in-class" low-emissions performance.
With some global demand for oil and gas expected even once the global economy reaches net-zero emissions, now is the right time to transform Canada into the cleanest global oil and gas producer. Moving to provide low-carbon and non-emitting energy products and services will help ensure economic competitiveness and prosperity, and create good, sustainable jobs for Canadians.
The new guidance will explain how proponents of new oil and gas projects subject to a federal impact assessment should use the analysis required by the Government of Canada's strategic assessment of climate change (SACC) to demonstrate that the project will be "best in class," such as by:
- demonstrating that the project will integrate advanced technologies and best environmental practices (BEPs), including emerging technologies, to minimize emissions;
- comparing the project's emissions with high-performing projects in the world; and
- developing a plan to achieve net-zero emissions by 2050 if the project will continue to operate after that date.
The new guidance will also include information about how a proposed project is consistent with the overall economic transition to a low carbon-economy, including considerations such as how the project will remain competitive across global low-carbon transition and net-zero scenarios, and how it avoids supporting activities and assets that are at risk of becoming stranded from declining demand.
The development of the guidance will be informed by consultations with industry, provinces, territories, Indigenous Peoples, and other stakeholders.
Carbon competitiveness
As the world acts on climate change and the global supply of fossil fuels becomes cleaner, Canada's oil sector will need to continue to drive down emissions and costs to remain competitive. The following graph illustrates how the federal measures outlined in the 2030 Emissions Reduction Plan will ensure that Canadian oil and gas production becomes less emissions intensive (i.e. fewer emissions per barrel) over the next decade. While the actual trajectory to 2030 will unlikely be a straight line as portrayed, and the global average is also unlikely to remain static, reducing the carbon intensity of Canadian production below the global average is both possible and likely to be increasingly important in order for Canadian industry to compete in an increasingly constrained global market.
