Environment minister denounces oil field for paying exorbitant profits to shareholders

The federal Minister of the Environment criticizes the Canadian oil companies for not having invested money in their promises to fight against climate change.

Steven Guilbeault says the country’s major oil players promised to do something about greenhouse gas emissions, but instead funneled most of their record profits to shareholders.

It’s at least the third time in the past six months that Guilbeault’s frustration has spilled over as oil company profits soar. This time, his criticism took the form of a video posted to Twitter as major oil producers began to release their third-quarter results.

“We already put our money where our mouth is,” Guilbeault said in an interview. « I’m not sure they are. »

The industry’s first earnings report came Friday from Imperial Oil, which reported $2 billion in third-quarter earnings and $6.2 billion for the first nine months of 2022. That compares to 1, $7 billion for the first nine months of 2021.

The company said it plans to spend $1.5 billion on stock buybacks and has increased its quarterly dividend by 30%.

Cenovus, Suncor and Canadian Natural Resources are expected to release their results next week.

These four companies, plus MEG Energy and ConocoPhillips Canada, form what is called the Pathways Alliance, a consortium formed to fight climate action in the oil sands.

Oil prices rise after Russia invades Ukraine

World oil prices surged earlier this year, largely due to the Russian invasion of Ukraine, and Canadian companies reaped the rewards.

In the first six months of 2022, Pathways companies posted profits in excess of $22 billion. That compares to less than $6 billion in the first six months of 2021.

A spokesperson for the alliance did not respond to Guilbeault’s call on Friday, saying the consortium would not comment on members’ financial decisions.

Two weeks ago, the group said it would spend $24 billion over the next eight years on emissions-cutting projects, but it is seeking additional financial help from Ottawa before stepping up a gear.

Businesses could get some of what they’re asking for next week when Finance Minister Chrystia Freeland tables her fall economic statement. She could use it to modify the carbon capture and storage technology tax credit she introduced last spring.

Technology that traps emissions from industrial sources and brings them underground is essential for oil and gas companies, as it is a major part of how they can continue to produce their products while meeting their emission reduction requirements. .

Incentive competition from the United States

The current tax credit — mainly to cover half the price of capital investments — will cost Ottawa about $2.6 billion over the next five years and $1.5 billion a year for the next four years.

The oil companies had asked for coverage of up to 75% and were not satisfied with the 50% offered.

Canada may be forced to up its game because the US Inflation Reduction Act offers more generous incentives for carbon capture technology.

Guilbeault said Friday he didn’t know what the tax credit plan was, though he acknowledged the U.S. incentive had changed the domestic picture.

“Of course we are looking at what the United States has done,” he said. « It’s a competitive investment world, we understand that. But at the same time, I mean, the oil sands companies are in Canada. And they can’t do emissions reduction projects in the United States. If they believe in the future of their businesses, they need to make those investments in decarbonization in Canada.”

Guilbeault said projections show that by 2050 global demand for oil will be less than a third of what it is today, and all of that will have to come from sources that don’t add emissions by production.

« Will there be a place for one of the highest emitting forms of oil if they don’t make those investments in decarbonization? I don’t think so. »