Companies operating in the oil extraction field from oil sands said they will not be able to achieve the target set by Ottawa for 2023 regarding the reduction of greenhouse gas emissions caused by oil extraction facilities.

Companies operating in the oil sands extraction sector in the province of Alberta in Western Canada will also not be able to meet the greenhouse gas emissions reduction target, falling at least five years behind the previously set timeline, meaning that this will not be achieved at least until 2035 instead of 2030.

Anticipating this possibility, the Canadian federal Environment and Climate Change Minister Steven Guilbeault stated last July that the oil and gas sector could benefit from an additional grace period.

It is worth noting that the Canadian federal government requested the oil and gas sector to reduce greenhouse gas emissions by 42% below 2019 levels by 2030. Environmental organizations had demanded that Canada reduce carbon emissions from oil and gas production by 60% from 2005 levels by 2030.

In the same context, Kendall Delling, head of the PathWays Alliance, which represents companies producing oil extracted from oil sands, said: "Achieving the emissions reduction target will take between five to ten years." The alliance leader is working to guide producers towards carbon neutrality by 2050.

It is worth mentioning that oil extraction from oil sands in Canada causes the emission of 70 million tons of greenhouse gases annually, representing 11% of the country's total greenhouse effect. Ottawa intends to impose a cap on these emissions next year.

The Alberta Oil Producers Alliance has pledged to reduce oil sands emissions by 22 megatons by 2030 through building a large carbon capture and storage center.

However, the timeline for establishing this center appears to be threatened due to lengthy ongoing discussions between public authorities and the oil sector, according to Kendall Delling.

It is noted that this center, which will be built in the town of Cold Lake in the province of Alberta, rich in oil sands, is estimated to cost $16 billion.

The federal government also indicated that it wants to avoid reducing production. It also pledged to provide grants, including tax exemptions worth $1.5 billion annually, in an initiative to encourage the development of carbon capture and storage projects and to encourage oil and gas companies in the country to move faster to reduce emissions.

It is worth noting that carbon capture projects permanently store carbon dioxide emissions before releasing them into the atmosphere. The Canadian government relies on this technology to allow the oil and gas sector to continue production while achieving the government’s 2030 emission reduction target.

In a related context, 2022 will be one of the most profitable years in the oil sector, with record cash flows of $152 billion and a 349% profit jump in a year and a half.