Oilpatch welcomes federal aid despite climate change conditions
The Alberta Finance Minister says companies shouldn't face problems with the requirement to help meet federal climate change commitments
CALGARY — A federal financing relief package for large Canadian companies was applauded by the oil and gas sector and the Alberta government despite conditions that could link the aid to an individual company’s climate change goals.
In Edmonton, Alberta Finance Minister Travis Toews welcomed the announcement, saying that the province’s large companies, particularly in oil and gas and aviation, need relief quickly.
“We know that the (financial) need could be great. We’ve seen some recovery in energy prices, that’s very welcome, but these prices that we’re seeing today are by no means close to profitable for the industry,” said Toews.
While the province still needs to see the details of the federal plan, he said he is pleased there is no cap on the bridge financing offer.
He added oil and gas companies shouldn’t face problems with the requirement to help meet federal climate change commitments.
“The federal government recognizes which sectors contribute most significantly to its revenues and needs to ensure these sectors – like oil and gas – will be there to help it pay off the massive debt it’s accumulating as part of the COVID-19 relief,” said oilseeds producer Census Energy Inc.’s Sonja Franklin.
The company is in a strong financial position with access to more than $6 billion in liquidity, she added, but government support is important because there’s no way to know when low oil prices will recover.
Cenovus has set targets of 30% greenhouse gas emissions intensity reduction and flat overall emissions by 2030, as well as achieving net zero GHG emissions by 2050, and therefore should have no problem meeting federal climate change requirements, she said.
The federal program goes a long way to addressing the industry’s request for short-term financial liquidity help and will likely be well used as long as there are no issues with accessing the funds, said Tim McMillan, CEO of the Canadian Association of Petroleum Producers.
“I think this is essential. Not all companies are going to need to tap into this sort of liquidity … but some that are normally high-quality, stable companies likely will be looking for this program to provide a certain amount of liquidity for them,” he said.
Environmental and climate change reporting by oil and gas companies is extensive, both voluntary and as required by regulators, he added, which means most companies should be able to meet Ottawa’s requirements.
“This is a non-sector-specific program and when we compare what we’ve been doing for the last several years compared to other industries in Canada, I think we’re probably one or two steps ahead,” he said.
Companies that apply for public support should be willing to say how they will adapt to new rules with regard to climate change, said Greenpeace Canada senior energy strategist Keith Stewart.
“There have to be some real teeth in how this is implemented, but it makes sense that companies seeking public support agree to limit dividends and executive pay, forgo tax havens and start aligning their business model with Canada’s climate change targets,” he said.
— By Dan Healing
With a file from Dean Bennett in Edmonton.