Canadian Oil and Gas Companies Aim to Increase Drilling by 8% in 2024

Oil and gas companies in Canada have announced plans to increase drilling activities by 8% in 2024, aiming to capitalize on new shipping opportunities, which include a controversial government-owned pipeline project.

Despite predictions that Canada will fall short of its carbon reduction targets, the Canadian Association of Energy Contractors (CAOEC) forecasted roughly 500 more wells next year, bringing the overall number of projects to 6,229.

The announcement comes as Canada, the world’s fourth-largest oil producer, considers imposing an emissions cap on the country’s oil and gas industry.

Environment Minister Steven Guilbeault has indicated his government’s intention to prepare a proposal for the upcoming Cop28 climate conference in Dubai. However, the fossil fuel industry opposes the suggested restrictions, claiming they are overly restrictive.

Despite adopting ambitious climate goals, Canada is expected to fall short of its goal of reducing carbon emissions by 40% below 2005 levels by 2030. According to a recent audit, the only major reductions in emissions occurred during the 2008 financial crisis and the COVID-19 outbreak.

“Canada is the only G7 country that has not achieved any emissions reductions since 1990,” said the commissioner of the environment and sustainable development, Jerry DeMarco.

The CAOEC highlighted that a motivating cause behind the upcoming drilling initiatives was the anticipated start of new pipeline operations, particularly the delayed Trans Mountain expansion project.

The federal government purchased the controversial TransMountain pipeline from Kinder Morgan in 2018 for C$4.5 billion (US$3.3 billion), stating that Canada needs to ease a crude-oil transportation bottleneck that costs Canadian oil producers billions of dollars in lost export earnings. He also promised to reinvest pipeline dividends in green energy projects.

“We know there is zero room to expand oil and gas extraction and meet climate targets,” said Conor Curtis from the Sierra Club Canada Foundation. “If the same effort that has been put into Trans Mountain were instead redirected to renewables, Canadians would be much better off.”

“No matter which side of the debate on further oil and gas expansion they fall into, a large majority of Canadians now want to see a strong regulation of emissions from our oil and gas sector that matches Canada’s national emissions reduction targets.”