Carbon pricing is in the best interests of Canada’s energy sector, which is probably why so many of the industry’s top executives support it:
- Husky Energy Senior Vice President Janet Annesley: “Not only do we have the carbon tax that applies to large emitters like Husky in the oilsands, but frankly, the flip side is that the government is using some of those revenues to help industry reinvest in technology. The combination of both of those policies is particularly powerful.” (remarks made at the 2019 CERAWeek conference)
- MEG Energy CEO Derek Evans: “We need a carbon tax. It would be nice if we weren’t sitting around arguing about it, but it seems to be a political football today.” (2019 CBC interview)
- Teck Resources CEO Don Lindsay: “We are also strong supporters of Canada’s action on carbon pricing and other climate policies such as legislated caps for oil sands emissions.” (February 2020 letter to Environment Minister Jonathan Wilkinson)
- Suncor CEO Mark Little: Suncor has “been a huge supporter of a carbon price for literally over two decades.” (remarks made at the 2019 CERAWeek conference)
- Cenovus Energy Executive Vice President Al Reid: “We’ve actually had a carbon tax in Alberta since 2007 and we’ve operated under that successfully. In fact we’ve thrived under that system as a company.” (October 2019 investor day presentation)
Why does the energy sector support carbon pricing?
Even as the global economy decarbonizes, the world will require hydrocarbon fuels for years to come. The Canadian oil and gas sector can continue to grow under carbon pricing.
Carbon pricing gives energy companies the flexibility to innovate and reduce their emissions, in order to keep their products competitive in a global marketplace that increasingly puts a price on carbon.
Energy companies support carbon pricing because they understand the risks to their business. Canada’s largest export market, the United States, is considering border carbon adjustments (BCAs) that could penalize Canada’s carbon-intensive oil and gas. The European Union, an import growth market, has already committed to having a BCA in place by 2023.
Domestic carbon pricing is the best way for companies to avoid penalties when they export to our major trading partners. It also incentivizes companies to reduce their emissions and stay competitive.
The Canadian oil sands have reduced their upstream emissions—those produced during extraction and initial processing—per barrel by 20% since 2009. But much more needs to be done to fully decarbonize our economy. Carbon pricing can drive that change.
Pricing also smooths the transition to the low-carbon economy of the future. A rising carbon price will make clean technologies cost-competitive—technologies like clean hydrogen and carbon capture and storage, which offer excellent growth opportunities for Canada’s Western provinces.