Exxon Unit, MEG push back on Canada’s ‘aggressive’ carbon plan

(Bloomberg) — Some of Canada’s top oil executives are stepping up their opposition to Prime Minister Justin Trudeau’s goal to cut emissions from the energy sector by 42% by 2030.

Brad Corson, managing director of Imperial Oil Ltd., told analysts on Friday that the target was “very aggressive” and “extends capacity to what is technically and economically feasible.” Imperial is a Calgary-based integrated oil producer that is controlled by ExxonMobil Corp.

“What I think, collectively as industry, government, society, we need to be very careful is to make sure that we bring the right balance between environmental improvements and the continued supply of oil,” said Corson. The company shares the government’s goal of achieving net zero emissions by 2050, he added.

The Trudeau government released the target in March and followed it up with a discussion paper on a potential emissions cap in the energy sector. The latter could be implemented through a stricter carbon pricing policy or a cap and trade system allowing companies with high emissions to buy credits from those that emit less.

The 42% target is bigger than the Canadian oil industry’s own proposal to cut emissions by 30% by the end of the decade — a plan that relies heavily on carbon capture technology to reduce pollution from the oil sands, which has a higher carbon footprint than many other forms of crude oil extraction.

“We have a plan and we believe it’s one of the few plans that exist,” MEG Energy Corp. CEO Derek Evans told analysts. “It’s 30% ambitious. I don’t know how you get to 42%. I think personally, IMHO, that’s almost unrealistic.

Environment Minister Steven Guilbeault’s office did not immediately respond to a request for comment.

The desire to reduce emissions must be balanced with the need to provide fuel to the world during a time of high prices, Cenovus Energy Inc. CEO Alex Pourbaix said on an investor call Thursday.

“Ultimately, the risk could be a reduction in production from Canada at a time when these resources are incredibly and desperately needed around the world,” he said.

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