Why Government Support for Decarbonizing Oil and Gas Is a Bad Investment

The document contends that Canada's oil and gas industry, bolstered by windfall profits, should fund its own decarbonization rather than relying on public subsidies. It highlights that current government supports, such as those for carbon capture, utilization, and storage (CCUS), often fail to yield meaningful emissions reductions and may even enable increased production. The author argues that public funds would be more effectively spent on proven low-carbon technologies like renewable energy and grid electrification to meet Canada's 2030 climate targets and ensure long-term energy security.

• Government financial support for decarbonizing the oil and gas sector may prolong the lifespan of projects and increase production, which contradicts global goals to limit warming to 1.5°C and increases the risk of stranded assets. Global stranded assets in the sector are estimated to exceed USD 1 trillion, with approximately USD 100 billion located in Canadian oil and gas fields.
• Canadian oil and gas companies have the financial capacity to fund their own decarbonization due to windfall profits; projected profits for the year are CAD 152 billion, and five major firms saw free cash flow increase by nearly 350% between Q1 2021 and Q2 2022.
• Industry commitments to net-zero are deemed insufficient because they often omit Scope 3 emissions, lack robust interim targets, and rely on carbon offsets. Furthermore, the industry plans to expand production by nearly 30% from 2020 to 2030, which is expected to increase associated annual emissions by 25%.
• Public funding for decarbonization has a history of poor results; for example, 27 projects funded by the Onshore Program of the Emissions Reduction Fund actually led to increased oil or gas production, which offset the emissions reductions.
• Carbon capture, utilization, and storage (CCUS) is criticized as an expensive 'wild card' technology with low potential for reductions by 2030. In Canada, seven operational CCUS plants capture only 0.05% of national emissions, and 70% of the captured carbon is used for enhanced oil recovery to increase production.
• The Canadian government provides substantial ongoing support to the sector, including at least CAD 4.8 billion per year in subsidies and an average of CAD 11 billion per year in public finance between 2018 and 2020.
• Taxpayers face significant liabilities from the sector, including CAD 253 million in unpaid property taxes owed to Alberta municipalities and estimated cleanup costs for 300,000 unreclaimed wells in Alberta ranging from CAD 40 to 70 billion.

APA

Dusyk,, L. C. C. (2022). Why Government Support for Decarbonizing Oil and Gas Is a Bad Investment. International Institute for Sustainable Development. https://www.iisd.org/articles/canada-oil-gas-decarbonization-support-unwise

Chicago

Dusyk,, Laura Cameron,Vanessa Corkal,Nichole. Why Government Support for Decarbonizing Oil and Gas Is a Bad Investment. International Institute for Sustainable Development, 2022. https://www.iisd.org/articles/canada-oil-gas-decarbonization-support-unwise.

Wikipedia

{{cite report |last1=Dusyk, |first1=Laura Cameron,Vanessa Corkal,Nichole |title=Why Government Support for Decarbonizing Oil and Gas Is a Bad Investment |publisher=International Institute for Sustainable Development |date=24 October 2022 |url=https://www.iisd.org/articles/canada-oil-gas-decarbonization-support-unwise |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dusyk2022why, author = {Dusyk,, Laura Cameron,Vanessa Corkal,Nichole}, title = {{Why Government Support for Decarbonizing Oil and Gas Is a Bad Investment}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = oct, url = {https://www.iisd.org/articles/canada-oil-gas-decarbonization-support-unwise}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }