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

The document contends that the Canadian oil and gas industry has sufficient windfall profits to fund its own decarbonization and that public subsidies for the sector, particularly for carbon capture, utilization, and storage (CCUS), create significant opportunity costs. It highlights that previous government supports have sometimes increased overall emissions by enabling higher production. The authors advocate for shifting public investment toward proven low-carbon technologies like wind, solar, and energy efficiency to meet Canada's 2030 climate targets.

• Government support for decarbonizing oil and gas production can paradoxically increase total emissions by lowering production costs and prolonging the lifespan of fossil fuel projects, which is inconsistent with a 1.5°C warming limit.
• The Canadian oil and gas industry possesses the financial capacity to fund its own emissions reductions due to high energy prices and windfall profits, with projected profits for the year reaching CAD 152 billion.
• Industry net-zero targets, such as those from the Pathways Alliance, are often deemed insufficient because they frequently omit Scope 3 emissions, lack robust interim targets, and rely heavily on carbon offsets or CCUS rather than absolute reductions.
• Carbon capture, utilization, and storage (CCUS) is characterized as a high-cost 'wild card' technology with limited immediate impact; in Canada, seven operational plants capture only 0.05% of national emissions, and 70% of captured carbon is used for enhanced oil recovery.
• Past government initiatives to reduce emissions in the sector have seen poor value for money, with 27 projects funded by the Emissions Reduction Fund actually leading to increased oil or gas production.
• Public funds are more effectively deployed in proven, low-cost technologies such as wind and solar energy, which saw unit cost decreases of 55% and 85% respectively between 2010 and 2019.
• The Canadian government faces significant financial liabilities related to the sector, including an estimated CAD 40 to 70 billion required to clean up 300,000 unreclaimed wells in Alberta.

APA

Cameron, L., Corkal, V., & Dusyk, N. (2022). Why Government Support for Decarbonizing Oil and Gas Is a Bad Investment. International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-10/bottom-line-decarbonizing-oil-gas.pdf

Chicago

Cameron, Laura, Vanessa Corkal, and Nichole Dusyk. Why Government Support for Decarbonizing Oil and Gas Is a Bad Investment. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-10/bottom-line-decarbonizing-oil-gas.pdf.

Wikipedia

{{cite report |last1=Cameron |first1=Laura |last2=Corkal |first2=Vanessa |last3=Dusyk |first3=Nichole |title=Why Government Support for Decarbonizing Oil and Gas Is a Bad Investment |publisher=International Institute for Sustainable Development |date=October 2022 |url=https://www.iisd.org/system/files/2022-10/bottom-line-decarbonizing-oil-gas.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cameron2022why, author = {Cameron, Laura and Corkal, Vanessa and Dusyk, 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/system/files/2022-10/bottom-line-decarbonizing-oil-gas.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }