Canada’s federal government will commit more than $15 billion in public funding to the oil and gas industry by 2022, according to a new report from Environmental Defense. The nonprofit says the subsidies run counter to its promise to stop supporting high-emission sectors.
Critics, however, have questioned the report’s narrative and defended Ottawa’s endorsement of early-stage technology aimed at reducing the industry’s environmental impact.
Last year, Canada joined 23 other countries at the UN’s COP26 climate conference, pledging to end certain types of support for foreign oil and gas activities by the end of 2022. Natural Resources Minister Jonathan Wilkinson added that Canada will also end public funding. Expansion of domestic fossil fuel projects, Liberal campaign promises.
According to the Environmental Defense report, Canada is the largest international fossil fuel investor to sign the COP26 pledge. The $15 billion so far figure for 2022 represents a decline from last year’s report, which listed nearly $18 billion in subsidies.
“Canada continues to contribute to climate disasters by providing billions of dollars to oil and gas companies,” Julia Levin, the group’s national climate program manager, said in a news release on Friday. . “By eliminating public financing for fossil fuels, we can free up billions of dollars to help solve climate problems,” she said.
Canada’s commitments at COP26 put pressure on the Export Development Council of Canada (EDC) to provide financial support to foreign oil and gas companies to advance Canada’s business interests.
According to the Environmental Defense Report, EDCs account for the majority of federal funding to the fossil fuel industry, averaging $13 billion annually from 2018 to 2020. Crown companies total include Trans Mountain Pipeline Expansion and Coastal Gas Link Pipeline.
An EDC spokesperson said it does not consider its services subsidized, adding that the agency “provided $3.4 billion in accelerated operations to the oil and gas sector” in the first half of 2022.
“In 2021, for the first time, EDC has driven more business in the cleantech sector, including renewable power generation, than in the oil and gas sector,” Zoe de Bellefeuille wrote in an email. Yahoo Finance Canada.
Kevin Kraussert, a former oilfield services executive who now runs a clean-tech venture capital firm and startup accelerator, said the Environmental Defense Report’s accounting is about the technology that the oil and gas sector benefits from, and the actual sector itself. are confused.
He said investments included in this year’s total of $15 billion include key technologies to meet Canada’s climate goals, which could be used beyond the oil and gas sector. I’m here.
“These are smart investments made by the Canadian government to help all sectors reach the daunting task of net zero in 2050,” he said in a telephone interview. not just for oil and gas, let alone subsidies.”
Canadian Petroleum Producers’ Association spokesperson Jay Averill notes that the upstream oil and gas sector adds billions of dollars to government coffers. Like Krausert, he sees the industry as a major player in the transition to a clean economy.
“Approximately 75% of all clean technology investments in Canada are from the natural gas and oil industries,” he said in an emailed statement.
Jeff Lagerquist is a Senior Writer for Yahoo Finance Canada. follow him on twitter @jefflagerquist.
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