Analysis: Canada’s Oil and Gas Sector Reduces Emissions While Increasing Production

According to a new analysis from the Canadian Association of Petroleum Producers (CAPP), Canada’s oil and natural gas sector emissions have dropped dramatically over the last ten years. The federal production and emissions report found that during this time period, emissions from the industry dropped by 24%.

When discussing Canada’s role in supplying responsible energy, CAPP president and CEO Lisa Baiton highlighted emissions performance as an essential measure. According to her, conventional producers in Canada have already shown that increased energy output can be achieved without increasing emissions.

The research studied specifically the period from 2012 to 2021, when conventional oil production dropped by nine percent. However, production-related emissions fell by 27%, from 100 million metric tons of carbon dioxide equivalent in 2012 to 76 million metric tons in 2021. The total carbon dioxide emissions from natural gas decreased by 22% while production increased by 35%. The natural gas industry successfully reduced methane, an extremely harmful greenhouse gas, by 38% overall.

The oil and gas industry in Canada is responsible for 28 percent of the country’s total emissions, so understanding how much of an influence it has is essential. Alberta is Canada’s largest oil-producing province, and its government has opposed the federal government’s plans to set a cap on emissions from the industry.

According to Environmental Defence associate director Julia Levin, the industry’s opposition to the emissions cap indicates a lack of faith in the sector’s ability to significantly reduce emissions. Concerns have been raised by independent investigations that the oil and gas industry may be distorting its reported methane emissions to the government.

Kevin Birn, S&P Global’s vice president and principal analyst for Canadian oil markets, argues that the overall drop in emissions should be considered an optimistic outcome for the industry, despite the fact that there may be challenges around the measurement and accounting of methane emissions. He noted that decreasing carbon intensity and absolute emissions would help achieve both lowering domestic emissions and making Canadian exports more competitive.

While the research agrees that emissions from the oilsands sector could go up in the future due to increased production, it also notes that the statistics suggest a potential earlier and lower peak in emissions than previously predicted.