Canada’s Cenovus joins oil-sands producers targeting net zero emissions

By Kevin Orland on 1/9/2020

CALGARY (Bloomberg) - Cenovus Energy Inc. joined some of its oil-sands peers in setting a goal of reaching net-zero emissions from its operations, part of a push to improve the industry’s reputation and win over environmentally minded investors.

Cenovus is aiming to achieve the net-zero feat by 2050, and in a statement released Thursday it also set targets of reducing its emissions per barrel of oil produced by 30% by 2030 and keeping its absolute emissions flat in that timeframe. Both of those targets include direct emissions from its own operations, as well as the indirect emissions from the generation of energy that it uses at its facilities.

The companies that produce crude from Canada’s oil sands, the world’s third-largest oil reserve, have been trying to revamp their public image as ecological offenders as investors increasingly focus on firms’ environmental, social and governance performance. That reputation has led to fierce opposition and delays to pipelines that export oil-sands crude, limiting the companies’ ability to boost production.

Cenovus peers Canadian Natural Resources Ltd. and MEG Energy Corp. have both set long-term, “aspirational” targets of achieving net-zero emissions from their oil-sands operations.

Putting those goals within reach are advances in technologies like carbon capture and sequestration, as well as increased used of solvents -- rather than energy-intensive steam -- for oil extraction, said Al Reid, Cenovus’s executive vice president in charge of stakeholder engagement.

“On GHG emissions, we’ll need more of some of the things that we’re already doing, but we’re also going to have to push ourselves,” Reid said in an interview. “When you start talking about that longer-term, net-zero emissions target, we’ll need technologies that we know exist today, that we know can work today, but aren’t economic today.”

Cenovus also set a target of spending a minimum of C$1.5 billion ($1.1 billion) with indigenous-owned businesses over the next decade. That’s down from about C$3 billion in spending with those businesses over the past decade. Reid said the reduction is due to Cenovus no longer spending as much to increase its output and an increased focused on trimming all forms of spending in recent years.

Other targets Cenovus set out Thursday include reclaiming an additional 1,500 decommissioned well sites, completing C$40 million of caribou habitat-restoration work and reducing fresh water-use intensity to a maximum 0.1 barrels per barrel of oil equivalent.

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