Oil and gas.
Energy
Energy & the Environment
The three letter curse words.
Many are calling for the end of oil and gas while promoting the slogan “Build Back Better”.
The slogan which originated from the 2015 Sendai Framework for Disaster Risk Reduction in response to Great East Japan Earthquake and Tsunami, has now morphed into the slogan for all things green and socially just.
The Liberal Party of Canada’s website outlines their plan for “Protecting our Environment and Moving Our Economy Forward” as follows:
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Fighting and Preparing for Climate Change
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Making Communities Cleaner, More Efficient, and More Affordable
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Protecting Canada’s Natural Legacy
The document lays out a commitment to achieve net-zero emissions by 2050, plant two billion trees in ten years, provide interest-free loans for retrofits, build vehicle charging stations, set up a camping travel bursary and ban single-use plastics.
So what is the problem with the Liberals environmental plan? Simple. It lacks depth, neglects financial implications and worst of all, its not rooted in reality.
Net-Zero Emissions by 2050
Making a commitment to hit this target through “legally binding” targets ignores the reality that we live in.
The Parliamentary Budget Office has indicated that emissions-reductions cannot be met unless the carbon tax is drastically increased.
While it may be possible to tax the country into a state of zero emissions, this would significantly cripple the economy, destroy jobs and ruin lives. This is not acceptable.
What should the government do?
Up to the mid-late 1800s, wood was the primary source of energy for developed nations.
What changed from that point to now? Innovation.
Government needs to remove red tape, repeal poor policy, end harmful taxation and allow the free market to pursue new technologies.
How can we be sure that this will work?
The free market is driven to create returns for shareholders. If there is an opportunity to create profits through new technology, free markets will find a way to capitalize.
In order to truly implement policies that improve our environment, we need to look beyond our borders and bring leading Canadian technologies to foreign countries.
Canada is a significant coal exporter. Coal, when burned, is a much higher polluter than other non-renewable resources such as natural gas and hydrogen. The government should work with foreign countries to promote the use of natural gas as a substitute.
Retrofit Buildings
Plans to provide free energy audits, interest-free retrofit loans and grants for zero-emissions homes are the main talking points of the Liberal retrofit plan.
First off, nothing supplied by the government is free. All government expenses are bankrolled by taxpayers.
In the midst of reduced or eliminated incomes due to the pandemic, the likelihood of home-owners or landlords being willing to take on debt to retrofit homes or office buildings is going to be limited for the foreseeable future.
Similarly, the costs associated with building a zero-emission home will not be offset with a $5,000 grant as proposed in the Liberal plan.
What should the government do?
Canada is already home to stringent building regulations. Regulations that carry significant costs.
In order to encourage further “green” building, the market needs access to more affordable products.
The government could accomplish this through the reduction of red tape, and the promotion of trade deals that allow for foreign firms to bring their goods and technology to Canada.
Competition and innovation ultimately drive down consumer costs and will always be more effective and efficient than government subsidies.
Charging Stations
Recently, the federal government announced that it will “invest” $295 million to help Ford Canada upgrade its Oakville assembly plant to begin making electric vehicles.
With the increased manufacturing of electric cars, comes a requirement for charging stations.
According to a 2015 US Department of Energy study, costs for single port Level 1 stations range from $300-$4,500. For DC fast charging stations, $14,000-$91,000.
Level 1 stations add 6 miles of range per hour @ 1.9kW. DC fast charging stations add 90 miles per 20 minutes @ 90kW.
Before taxpayer funds are thrown at green projects, a complete analysis of the life-cycle costs should be a requirement. This will ensure that emissions are truly lower and that taxpayers are receiving economic value for their tax dollars.
What should the government do?
Government subsidies that prop up an industry or product are inevitably harmful to consumers. These subsidies hide costs that the free market would ultimately choose not to absorb.
Instead, government should encourage vehicle manufacturers to produce more fuel efficient vehicles, regardless of the fuel system used to power the vehicle.
This could be done through the existing Scientific Research & Experimental Development Tax Incentive Program. The specific objective of the project should be to offset the costs of wages paid to research and development staff who are engaged in this direct work.
Beyond the direct goal of improving vehicle emissions, this program would create more opportunities for high-paying jobs within the tech sector which would further help to diversify the Canadian economy.
Trees and Camping Travel Bursary
The tree planting program involves two billion trees, ten years, 3,500 seasonal jobs and an overall $3 billion effort to deploy natural climate solutions.
If there is a job that meets pandemic guidelines, planting trees in the great outdoors qualifies.
The camping bursary was to provide a $2,000 grant to help families go camping in Canada’s national parks. No grants have been provided to date.
Additionally, the Learn to Camp program was to be expanded so that every Canadian child could learn how to camp by the time they reached grade eight.
What should the government do?
The WE scandal resulted in a missed opportunity to create job opportunities for post-secondary students. This can be remedied by expanding the Canada Summer Jobs program in advance of the 2021 tree planting season.
If there is little or no interest in the tree planting program for 2021, it should be abandoned entirely. Instead, government should support private sector companies who are consistently engaging in tree planting projects and other environmental reclamation projects.
Boutique tax credits and other one-off government programs typically result in creating winners and losers. As such, the camping bursary program should be cancelled.
Instead, and in conjunction with a full tax code review, the government could find efficiencies within the tax system that would translate into real results for Canadians.
Single-Use Plastics Ban
A recent announcement to ban single-use plastics, regulations to be finalized in late 2021, seeks to fulfill a long running Liberal election promise.
The ban will remove plastic grocery bags, straws, stir sticks, six pack rings, cutlery and takeout containers.
At a time where the hospitality industry is reeling from the impacts of the pandemic, this will be another difficult adjustment for this industry.
Smaller Alberta plastic manufactures have expressed concern with the new policy. Although single-use plastics account for a small portion of the plastics market, the costs associated with re-tooling a manufacturing facility can be quite high.
What should the government do?
Instead of virtue-signalling, the government should focus on addressing the issue of plastic recycling. The slogan of reduce, reuse and recycle can be traced back to the 1970s. Why hasn’t it caught on as hoped? Simply put, there is no money in plastic recycling.
Government should focus resources instead to projects that find viable solutions for plastic recycling. One such project is the development of plastic-bitumen composite roads.
Adding carbon capture technology to the plastic processing and bitumen mixing process would allow for road materials to be produced in an environmentally conscious manner.
Plastic-bitumen composite roads could result in better quality roadways as they are less water absorbent. Due to the temperature swings in Canada, this could save significant amounts of money otherwise spent on maintenance.
Final Thoughts
Canadians across the country have a strong desire to protect and preserve our environment for our children and future generations.
Environmental policies need to be more than exercises in virtue-signalling.
Government needs to understand the climate that we live in, the size of our country and the economic implications of the decisions being made.
Government subsidies are unacceptable. Subsidies result in expensive infrastructure projects and bloated consumer costs. If we need a reminder of this we only have to look at the recent failing of the Ontario green energy initiative.
Government should focus on reducing red tape, encouraging competition and providing targeted tax credits. Policy that focus on tax credits require free market enterprises to undergo the leg work to get new technology to a state where it can be capitalized on. This allows the free market to determine what is viable and how to achieve capitalization in the most efficient manner.
Lastly, we need capitalize on revenues from our oil and gas sector in order to further technological advances. Passing legislation to end emissions, create a zero-plastic waste economy or any other lofty agenda neglects the real world implications of these decisions. These policies do not take into consideration the resources required to accomplish these goals. Additionally, many families are being left behind as a result of these policy decisions.
We can protect our environment through innovation. In making policy decisions, government must not take better care of the environment than the residents who call it home.
https://www.jaredpilon.com/
Alberta
The permanent CO2 storage site at the end of the Alberta Carbon Trunk Line is just getting started
Wells at the Clive carbon capture, utilization and storage project near Red Deer, Alta. Photo courtesy Enhance Energy
From the Canadian Energy Centre
Inside Clive, a model for reducing emissions while adding value in Alberta
It’s a bright spring day on a stretch of rolling farmland just northeast of Red Deer. It’s quiet, but for the wind rushing through the grass and the soft crunch of gravel underfoot.
The unassuming wellheads spaced widely across the landscape give little hint of the significance of what is happening underground.
In just five years, this site has locked away more than 6.5 million tonnes of CO₂ — equivalent to the annual emissions of about 1.5 million cars — stored nearly four CN Towers deep beneath the surface.
The CO₂ injection has not only reduced emissions but also breathed life into an oilfield that was heading for abandonment, generating jobs, economic activity and government revenue that would have otherwise been lost.
This is Clive, the endpoint of one of Canada’s largest carbon capture, utilization and storage (CCUS) projects. And it’s just getting started.
Rooted in Alberta’s first oil boom
Clive’s history ties to Alberta’s first oil boom, with the field discovered in 1952 along the same geological trend as the legendary 1947 Leduc No. 1 gusher near Edmonton.
“The Clive field was discovered in the 1950s as really a follow-up to Leduc No. 1. This is, call it, Leduc No. 4,” said Chris Kupchenko, president of Enhance Energy, which now operates the Clive field.
Over the last 70 years Clive has produced about 70 million barrels of the site’s 130 million barrels of original oil in place, leaving enough energy behind to fuel six million gasoline-powered vehicles for one year.
“By the late 1990s and early 2000s, production had gone almost to zero,” said Candice Paton, Enhance’s vice-president of corporate affairs.
“There was resource left in the reservoir, but it would have been uneconomic to recover it.”
Facilities at the Clive project. Photo courtesy Enhance Energy
Gearing up for CO2
Calgary-based Enhance bought Clive in 2013 and kept it running despite high operating costs because of a major CO2 opportunity the company was developing on the horizon.
In 2008, Enhance and North West Redwater Partnership had launched development of the Alberta Carbon Trunk Line (ACTL), one of the world’s largest CO2 transportation systems.
Wolf Midstream joined the project in 2018 as the pipeline’s owner and operator.
Completed in 2020, the groundbreaking $1.2 billion project — supported by the governments of Canada and Alberta — connects carbon captured at industrial sites near Edmonton to the Clive facility.
“With CO2 we’re able to revitalize some of these fields, continue to produce some of the resource that was left behind and permanently store CO2 emissions,” Paton said.
Map of the Alberta Carbon Trunk Line courtesy of Wolf Midstream
An oversized pipeline on purpose
Each year, about 1.6 million tonnes of CO2 captured at the NWR Sturgeon Refinery and Nutrien Redwater fertilizer facility near Fort Saskatchewan travels down the trunk line to Clive.
In a unique twist, that is only about 10 per cent of the pipeline’s available space. The project partners intentionally built it with room to grow.
“We have a lot of excess capacity. The vision behind the pipe was, let’s remove barriers for the future,” Kupchenko said.
The Alberta government-supported goal was to expand CCS in the province, said James Fann, CEO of the Regina-based International CCS Knowledge Centre.
“They did it on purpose. The size of the infrastructure project creates the opportunity for other emitters to build capture projects along the way,” he said.
CO2 captured at the Sturgeon Refinery near Edmonton is transported by the Alberta Carbon Trunk Line to the Clive project. Photo courtesy North West Redwater Partnership
Extending the value of aging assets
Building more CCUS projects like Clive that incorporate enhanced oil recovery (EOR) is a model for extending the economic value of aging oil and gas fields in Alberta, Kupchenko said.
“EOR can be thought of as redeveloping real estate,” he said.
“Take an inner-city lot with a 700-square-foot house on it. The bad thing is there’s a 100-year-old house that has to be torn down. But the great thing is there’s a road to it. There’s power to it, there’s a sewer connection, there’s water, there’s all the things.
“That’s what this is. We’re redeveloping a field that was discovered 70 years ago and has at least 30 more years of life.”
The 180 existing wellbores are also all assets, Kupchenko said.
“They may not all be producing oil or injecting CO2, but every one of them is used. They are our eyes into the reservoir.”
CO2 injection well at the Clive carbon capture, utilization and storage project. Photo for the Canadian Energy Centre
Alberta’s ‘beautiful’ CCUS geology
The existing wells are an important part of measurement, monitoring and verification (MMV) at Clive.
The Alberta Energy Regulator requires CCUS projects to implement a comprehensive MMV program to assess storage performance and demonstrate the long-term safety and security of CO₂.
Katherine Romanak, a subsurface CCUS specialist at the University of Texas at Austin, said that her nearly 20 years of global research indicate the process is safe.
“There’s never been a leak of CO2 from a storage site,” she said.
Alberta’s geology is particularly suitable for CCUS, with permanent storage potential estimated at more than 100 billion tonnes.
“The geology is beautiful,” Romanak said.
“It’s the thickest reservoir rocks you’ve ever seen. It’s really good injectivity, porosity and permeability, and the confining layers are crazy thick.”
Suitability of global regions for CO2 storage. Courtesy Global CCS Institute
CO2-EOR gaining prominence
The extra capacity on the ACTL pipeline offers a key opportunity to capitalize on storage potential while addressing aging oil and gas fields, according to the Alberta government’s Mature Asset Strategy, released earlier this year.
The report says expanding CCUS to EOR could attract investment, cut emissions and encourage producers to reinvest in existing properties — instead of abandoning them.
However, this opportunity is limited by federal policy.
Ottawa’s CCUS Investment Tax Credit, which became available in June 2024, does not apply to EOR projects.
“Often people will equate EOR with a project that doesn’t store CO2 permanently,” Kupchenko said.
“We like to always make sure that people understand that every ton of CO2 that enters this project is permanently sequestered. And we take great effort into storing that CO2.”
The International Energy Forum — representing energy ministers from nearly 70 countries including Canada, the U.S., China, India, Norway, and Saudi Arabia — says CO₂-based EOR is gaining prominence as a carbon sequestration tool.
The technology can “transform a traditional oil recovery method into a key pillar of energy security and climate strategy,” according to a June 2025 IEF report.
Drone view of the Clive project. Photo courtesy Enhance Energy
Tapping into more opportunity
In Central Alberta, Enhance Energy is advancing a new permanent CO2 storage project called Origins that is designed to revitalize additional aging oil and gas fields while reducing emissions, using the ACTL pipeline.
“Origins is a hub that’s going to enable larger scale EOR development,” Kupchenko said.
“There’s at least 10 times more oil in place in this area.”
Meanwhile, Wolf Midstream is extending the pipeline further into the Edmonton region to transport more CO2 captured from additional industrial facilities.
Alberta
Canadian Oil Sands Production Expected to Reach All-time Highs this Year Despite Lower Oil Prices
From Energy Now
S&P Global Commodity Insights has raised its 10-year production outlook for the Canadian oil sands. The latest forecast expects oil sands production to reach a record annual average production of 3.5 million b/d in 2025 (5% higher than 2024) and exceed 3.9 million b/d by 2030—half a million barrels per day higher than 2024. The 2030 projection is 100,000 barrels per day (or nearly 3%) higher than the previous outlook.
The new forecast, produced by the S&P Global Commodity Insights Oil Sands Dialogue, is the fourth consecutive upward revision to the annual outlook. Despite a lower oil price environment, the analysis attributes the increased projection to favorable economics, as producers continue to focus on maximizing existing assets through investments in optimization and efficiency.
While large up-front, out-of-pocket expenditures over multiple years are required to bring online new oil sands projects, once completed, projects enjoy relatively low breakeven prices.
S&P Global Commodity Insights estimates that the 2025 half-cycle break-even for oil sands production ranged from US$18/b to US$45/b, on a WTI basis, with the overall average break-even being approximately US$27/b.*
“The increased trajectory for Canadian oil sands production growth amidst a period of oil price volatility reflects producers’ continued emphasis on optimization—and the favorable economics that underpin such operations,” said Kevin Birn, Chief Canadian Oil Analyst, S&P Global Commodity Insights. “More than 3.8 million barrels per day of existing installed capacity was brought online from 2001 and 2017. This large resource base provides ample room for producers to find debottlenecking opportunities, decrease downtime and increase throughput.”
The potential for additional upside exists given the nature of optimization projects, which often result from learning by doing or emerge organically, the analysis says.
“Many companies are likely to proceed with optimizations even in more challenging price environments because they often contribute to efficiency gains,” said Celina Hwang, Director, Crude Oil Markets, S&P Global Commodity Insights. “This dynamic adds to the resiliency of oil sands production and its ability to grow through periods of price volatility.”
The outlook continues to expect oil sands production to enter a plateau later this decade. However, this is also expected to occur at a higher level of production than previously estimated. The new forecast expects oil sands production to be 3.7 million b/d in 2035—100,000 b/d higher than the previous outlook.
Export capacity—already a concern in recent years—is a source of downside risk now that even more production growth is expected. Without further incremental pipeline capacity, export constraints have the potential to re-emerge as early as next year, the analysis says.
“While a lower price path in 2025 and the potential for pipeline export constraints are downside risks to this outlook, the oil sands have proven able to withstand extreme price volatility in the past,” said Hwang. “The low break-even costs for existing projects and producers’ ability to manage challenging situations in the past support the resilience of this outlook.”
* Half-cycle breakeven cost includes operating cost, the cost to purchase diluent (if needed), as well as an adjustment to enable a comparison to WTI—specifically, the cost of transport to Cushing, OK and quality differential between heavy and light oil.
About S&P Global Commodity Insights
At S&P Global Commodity Insights, our complete view of global energy and commodity markets enables our customers to make decisions with conviction and create long-term, sustainable value.
We’re a trusted connector that brings together thought leaders, market participants, governments, and regulators and we create solutions that lead to progress. Vital to navigating commodity markets, our coverage includes oil and gas, power, chemicals, metals, agriculture, shipping and energy transition. Platts® products and services, including leading benchmark price assessments in the physical commodity markets, are offered through S&P Global Commodity Insights. S&P Global Commodity Insights maintains clear structural and operational separation between its price assessment activities and the other activities carried out by S&P Global Commodity Insights and the other business divisions of S&P Global.
S&P Global Commodity Insights is a division of S&P Global (NYSE: SPGI). S&P Global is the world’s foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world’s leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information visit https://www.spglobal.com/commodity-insights/en.
SOURCE S&P Global Commodity Insights
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