The world’s fourth-largest global oil producer has been weakened in recent years by multinational producers scaling back and investors pulling out, due to poor economics and a tarnished environmental image.
Even so, production grew until the Alberta provincial government curtailed it last year to cope with congested pipelines. This year’s pandemic further reined in output.
“This industry has time and time again shown its resilience and every time there’s a forecast of its demise, it has overcome,” O’Regan said in a phone interview from St. John’s, Newfoundland and Labrador, his home province. “I think you’ll see an industry that is, before our eyes, changing.
That change must include working toward the globe’s lowest-emitting oil barrel, he said, without specifying a target for emissions. Canada produced the greatest upstream carbon dioxide intensity per barrel of oil equivalent in 2018 among the world’s top 10 producing nations, according to consultancy Rystad Energy
“If you do what is required to lower emissions, you will be rewarded with increased investment. If you don’t, you’ll be punished.”
French oil major Total took a $7 billon impairment last month on Canadian oil sands assets that have high costs or that it expects to become stranded, raising doubts about the sector’s future.
Canadian producers have steadily reduced emissions intensity per barrel, but overall emissions are rising. Pandemic cost-cutting has included some companies’ green efforts.
Consultancy IHS Markit forecasts that Canadian oil sands production will reach 3.8 million barrels per day (bpd) in 2030, up 1.1 million bpd.
O’Regan said that “good projects, done in a good way, will go ahead,” offering the example of the Trans Mountain oil pipeline expansion.