Hugh Helferty and Jane Savage published this article in Corporate Knights calling for the Canadian government and the Canadian oil and gas industry to take immediate, decisive action towards carbon emissions. If Canadian oil is not made more carbon competitive, it will become unattractive to U.S. buyers, who are increasingly shifting towards electric vehicles and decarbonized fuels. With 80% of Canada’s crude oil exported to the U.S. each year, this puts hundreds of thousands of Canadian jobs in peril.
From the article:
We need to think about how to best decarbonize Canadian oil before the U.S. imposes low-carbon requirements at its borders. Regulating that requirement in the near-term is the only way to ensure Canada’s jobs are preserved during the energy transition. In the 1970s, as the adverse health impacts of lead in gasoline and the threat to Canadian oil jobs became clear, legislation was implemented to begin removing that lead. We must do the same now by finding a legislated solution to protect both Canadian jobs and the environment.
A workable policy solution for both industry and government to consider is an idea proposed by Oxford Net Zero and the ClimateWorks Foundation called the “carbon takeback obligation” (CTBO). This regulation would require all oil producers to permanently store an amount of carbon equivalent to what they produce, including emissions resulting from refining and burning their products. Phased in over time, carbon dioxide storage must reach 100% of the Scope 1, 2 and 3 emissions associated with whatever crude oil is still being produced by 2050. This would result in a concrete plan for emission reductions and decarbonization, and it could create a predictable regulatory environment in which producers can operate. And importantly, any Canadian crude oil produced and exported would be carbon competitive for the U.S. market.
Read the full article here.