Canadian oil sands companies have shelved nearly C$2 billion in green initiatives in a cost-cutting drive to weather the coronavirus pandemic, a reversal in some of their commitments to reduce emissions and clean up their dirty-oil image.
International oil firms left Canada in droves in recent years due to the high costs to turn a profit in the sector. Some investors and banks, meanwhile, halted financing in part to pressure the world’s fourth-largest crude producer to reduce the environmental impact of oil-sands production. This year, top producers Suncor Energy, Canadian Natural Resources and Cenovus Energy have cut a combined C$1.8 billion ($1.32 billion) in planned spending on green initiatives as losses mount due to economic lockdowns that have hammered oil demand.
“This has strengthened our view on the matter, that our decision that we took (to block oil sands) was correct,” said Jeanett Bergan, KLP’s head of responsible investments.
KLP, Norway’s largest pension fund, exited oil sands investments last year, while the country’s $1 trillion wealth fund in May blacklisted Suncor and other large producers for producing excessive greenhouse gas emissions. The Canadian industry has the highest upstream emissions intensity among major world oil and gas producers, at 39 kilograms per barrel of oil equivalent, more than triple that of the United States, consultancy Rystad Energy said in May.
The picture in Canada contrasts with Europe, where the biggest oil and gas companies have diverted a larger share of their cash to green energy, even through the outbreak.