Large-scale carbon capture: theory to reality in the oil sands

CONTRIBUTORS

Les E. Stelmach, CFA

Senior Vice President, Portfolio Manager

This is a chapter from the Franklin Templeton Institute paper, Energy transition: Accelerating investment opportunities. To read all chapters in this paper, download the complete PDF or click here.

Chapter preview

Collectively, the oil sands are one of Canada’s largest industrial emitters and in aggregate are believed to account for roughly 13% of Canada’s greenhouse gas (GHG) emissions.¹The oil sands also account for nearly three-quarters of Western Canada’s total crude oil production, with the associated crown royalties, corporate taxes and other economic spin-offs making them a significant contributor to Canada’s economic growth—contributing nearly 3% to annual gross domestic product (GDP).²

Reduction in emissions intensity to date has largely come from improved operational processes and collaboration between companies and governments. However, advancements in carbon capture, utilization, and sequestration (CCUS) will be key to reducing Canadian oil sand emissions. Les Stelmach of Franklin Bissett Investment Management discusses:

In addition to the potential financial impact of rising carbon taxes, the oil sands industry recognizes that emissions are an obstacle for investment and that reductions are critical for Canada to reach its national GHG reduction targets.
The Pathways Alliance’s foundational CCUS project and associated transportation pipeline have the overall goal of enabling partner oil sands emissions to reach net zero by 2050 in three phases.
Combined efforts are required to reduce overall oil sands emissions. Within the upstream business, mining and in situ operations there are different opportunities and challenges.

This is a chapter from the Franklin Templeton Institute publication, Energy transition: Accelerating investment opportunities. Arguably, humanity’s greatest current challenge is the need to shift to low and net-zero carbon in a little less than 30 years. New technologies are accelerating the renewable energy transition while reducing environmental impacts. The renewable energy sources of today and the future require new and smarter technologies as well as the rapid creation of new infrastructure. These challenges create investment opportunities as investors have a critical role given the capital required to fund this transition. To read the full paper and explore views from across our specialist investment managers, download the complete PDF or click here.

Endnotes

Source: “Canadian Environmental Sustainability Indicators: Global greenhouse gas emissions.” Environment and Climate Change Canada. April 2021. Consulted May 5, 2023.
Source: “Real GDP impact of the oil sands industry in Canada from 2016 to 2021.” Statista Research Department. As of August 25, 2023.

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