The Canadian Association of Petroleum Producers says tech is key, but the Pembina Institute said energy companies might need to reinvent themselves
CALGARY—A G7 goal to shift to a no-carbon economy over the course of this century isn’t spooking Canada’s biggest oil and natural gas industry group.
Tim McMillan, head of the Canadian Association of Petroleum Producers, said technology will be key, however.
Indeed, advancements that “wouldn’t have been conceivable” a century ago are commonplace today, he said.
“When a country or a world puts its mind to something, it can be pretty powerful.”
But environmental groups had a different interpretation of the agreement that came out of the June 7 G7 meeting in Germany.
In a release, Germanwatch lauded the G7 for putting “the end of the fossil fuel era” on the global agenda.
“The G7 is sending a signal that the world must move away from fossil fuels and investors should take notice,” said 350.org executive director May Boeve. “If you’re still holding onto fossil fuel stocks, you’re betting on the past.”
Dave Sawyer, an environmental economist at CMC Research Institutes in Ottawa, said the strong language the G7 leaders used about the “decarbonization” of the global economy is noteworthy.
“I think it is highlighting a more aggressive political stance. It’s moving away from just sort of aspirational hand-waving to more aggressive policy on the ground,” he said.
Ed Whittingham, executive director of the Pembina Institute, said energy companies might need to reinvent themselves.
“Many have rebranded themeslves from Oil Inc. or Gas Inc. to Energy Inc., recognizing that they just want to provide the energy services and they’re not as partial as to what source it’s coming from,” he said.
“For the companies that take a very long-term orientation, I don’t think it is business as usual. I think this is another sign that the world economy is going in a low-carbon, clean-energy direction.”
Warren Mabee, an environmental and energy policy expert at Queen’s University in Kingston, Ont., said he doubts many Canadian oil and gas firms are rewriting their business plans as a result of the G7’s climate commitment alone.
“I don’t know that it does really impact anything but the longest-term strategic planning that’s on the table,” he said.
What matters more is what goalposts are set between now and 2100.
Policy-makers had better get cracking now if they want to meet that goal, he said.
“It gets harder and harder to meet those challenges if we don’t start addressing it right now.”
Nicholas Rivers, Canada research chair in climate and energy policy at the University of Ottawa, said climate change is a long-term problem by its very nature. Emissions today have a tiny impact on climate, but their accumulation over time is having dramatic effects.
“To limit emissions over the course of the century, we have to get started right away,” Rivers said.
When Prime Minister Stephen Harper speaks of change over decades, he has a point, Rivers added.
“Over the decades to come is likely a sensible way of thinking about the way technology will change. But, in contrast, the way policy has to change to make technology change over the decades to come has to be much more abrupt.”
—With files from Bruce Cheadle in Ottawa