Oil & Gas

In its current form, Canada’s oil and gas industry is incompatible with a net-zero future and represents the single biggest emissions challenge for policymakers. In addition to accelerating climate change, oil and gas extraction is responsible for billions of dollars in environmental degradation.

of Canada’s emissions

Priorities for Action

  1. Dramatically reduce production emissions of oil and gas operations (by controlling fugitive methane emissions, improved energy efficiency, and other technological innovations)
  2. Develop R&D and infrastructure for production of zero emission fuels (hydrogen or electricity), geothermal energy, and material uses of bitumen
  3. Scale back sector investments not geared to an ultra-low-emission future
  4. Implement economic diversification strategies in fossil extraction dependent regions

The Opportunity

While a major driver of economic growth and Canada’s largest source of export earnings, the oil and gas industry makes up the largest share of Canada’s GHG emissions. Although Canada is increasingly determined to act to address climate change, some regions remain heavily dependent on fossil fuel extraction.

Three elements could help the sector move toward net zero: reducing production emissions to net zero while continuing to produce traditional fossil fuels; exploiting hydrocarbons in novel ways by developing net-zero emission energy products; and abandoning hydrocarbons for energy production and focusing on materials and/or alternative energy resources.

Today’s Challenges

Entrenched political and financial interests, infrastructure lock-in, up-front capital costs, insufficient policy signals

Future Challenges

Phasing out traditional oil and gas extraction, reclamation liabilities, developing net-zero carbon offset markets, regional economic diversification

Indicators of progress

Sector emissions, net zero by 2050 business plans with 2030 targets, share of oil and gas in Canada’s exports

Our Net Zero Decision Support Tool envisions a transformational level of change across eight key pathways: