Suncor’s Expansion Faces Obstacles as Canada Sets Bigger Climate Goals

Suncor Energy’s plan to increase bitumen mining to fuel its core oilsands facilities could be stopped if Canada favours oil projects with fewer carbon emissions per barrel in order to help achieve its climate goals.

Canada’s environment minister, Steven Guilbeault, on April 6 warned the company about the proposed 225,000 barrels per day (bpd) extension of Suncor’s Base Mine in northern Alberta, saying it will not be approved by the federal government because of its high carbon emissions, which is about 42 kg per barrel.

That same day, Equinor’s big Bay du Nord offshore drilling project got approved by Guilbeault. The project is estimated to produce oil with an emission intensity of 8kg of carbon per barrel. 

As the world’s fourth-largest crude producer, Canada differentiates between high and low-carbon fossil fuel production as it aims to reduce emissions over the next 30 years.

To meet Canada’s goal of net-zero emissions by 2050, new oil and gas projects will be required to demonstrate that their emissions are “best in class,” with no specification of what that class would be.

“It’s a big challenge for an oil sands project, and I’m not convinced they’ll even be able to do it,” said Alberta regional director at the Pembina Institute, Chris Severson-Baker.

As a member of the Oil Sands Pathways to Net Zero Alliance, Suncor Energy is working to achieve net-zero carbon emissions by 2050 through technologies like carbon capture and storage.

The open-pit bitumen mines that supply the two upgraders at Suncor’s Base Plant oil sands plant are expected to run out in 2030.

Around 750,000 barrels of oil equivalent are produced by the company each year. In total, the Base Plant upgraders can process 350,000 bpd of bitumen into higher-value synthetic crude.

Suncor stated in regulatory documents that other alternatives include building a new oil sands lease or moving bitumen from other projects operated by the company or third parties to the Base Plant.

However, a Tudor Pickering Holt analyst stated that transferring bitumen from other locations would be more expensive, and that building the new lease would also come with strict emissions requirements.

“The best return on capital is certainly to extend the life of the mine rather than finding other bitumen sources,” he added.

Original source material for this article taken from here