After nearly a century, Exxon, once the largest capitalized company in the world, has been removed from the Dow Jones blue chip index. In another story, BlackRock Inc., the world’s top asset manager with US$7 trillion under its control, cited failure to have clear, long-term greenhouse gas (GHG) emission reduction targets as the reason to step away from Exxon.
President Tim McKay of Canadian National Resource Ltd. announced CNRL will reduce GHG emissions by 25 per cent by 2025 and cut water use at its in-situ operations by half.
Cenovus Energy and Suncor Energy are both targeting per barrel emission reductions of 30 per cent by 2030 and Husky Energy is aiming for a 25 per cent emissions reduction by 2025.
Suncor is investing in a wind farm and announced that it would spend $1.4-billion on two gas-fired cogeneration units to replace petroleum coke-fired units and has committed to a 30 per cent reduction in GHG emissions.
Royal Dutch Shell, the world’s largest energy company, is walking away from Canada.
They have put their Sarnia refinery up for sale, and are contemplating selling their refinery in Fort Saskatchewan and their last 10-per cent stake in the Athabasca Oil Sands Project.
Shell is just another in a long line of energy companies—ConocoPhillips, Kinder Morgan, Devon Energy, Total Energy and Norway’s Equity Fund— to divest Canadian oil and gas assets. Bernard Looney, President of BP, in an interview with the Financial Times, said BP is expected to invest more in low-carbon energy and less in hydrocarbons as part of a new pledge to become a net zero emissions company by 2050.
Looney noted that as crude prices have plunged, renewable energy projects had been able to attract funding, suggesting the pandemic has weakened the investment case for oil.
Then we have the Canadian Association of Petroleum Producers (CAPP), led by a former Saskatchewan politician, Tim McMillan, sticking to Exxon’s dated mantra.
Pre-election, CAPP’s wish list included more pipelines, reduced corporate and municipal property taxes, reduced royalties, reduced environmental regulations, elimination of the carbon tax and a warp-speed approvals process.
A year and a half into Kenney’s rule, CAPP has fully or partially achieved all its wish list, much of it on the backs of doctors, students, entrepreneurs, high-tech start-ups and 33- to 55-year professionals and workers.
Prime Minister Trudeau and former Premier Notley never gave up on the hydrocarbon industry as CAPP, Kenney and the war room keep hammering into our psychic.
Both unequivocally believe a healthy oil sector is critical to develop and implement the innovations needed to cut GHG emissions and move towards transforming Alberta’s economy to cleaner energy processes.
Universities and industry research, workers and innovators in our energy sector are all essential components of this transformation.
But it won’t come without some pain and pull back. Unfortunately, we didn’t save any money from our decades of prosperity— individually or as a provincial government.
Albertans started to believe that easy money, with a few short term downward bumps, was a forever.
But reality has arrived and a provincial sales tax has become inevitable.
Dreaming about and promoting the ‘oil days of old’ is no longer wise or realistic.
Exxon Inc. should be our bellwether and warning—how a once-mighty blue-chip company has refused to change with the times.
Alberta, under the co-leadership of Kenney and CAPP is taking Alberta down the same path, and each day as another 33- to 55-year old oil sector professional moves to BC for work, Alberta is slowly and painfully devolving into an Exxon clone.
Schimke worked for Syncrude, Amoco’s Beaufort Sea operations and the Alberta Special Waste Management Corporation in administrative and/or management positions.