Good afternoon, Mr. Chair and members of the committee.
I'm a fellow at Simon Fraser University and the executive director at Clean Energy Canada, which is a climate and energy think tank at SFU.
Today, I want to share three recommendations for implementing this oil and gas sector cap. First, however, innovations in the oil and gas sector should be recognized, as emissions per barrel have declined over the past two decades. Unfortunately, overall emissions from the oil and gas sector have nevertheless been increasing steadily over the long term.
Canada's oil and gas sector emissions are significant, at 26% of our total emissions. For Canada to succeed in meeting our climate target, all sectors, including the oil and gas sector, will need to reduce emissions in the range of 40% to 45%. If we design this oil and gas sector emissions cap well, it will provide a predictable transition to a net-zero future for oil and gas workers, their communities and the economy, and will support Canada in meeting our climate commitments.
What must Canada do while setting this cap? I advise the government do three things. First, make the plan clear this year. Second, everyone in the sector needs to do their fair share. Third, incent the energy and industries that will be growing in 2030 and 2040.
The first recommendation is make the plan clear this year. Like any new regulation or legislation, the process for setting this cap needs to be done well. It needs to have the right consultations and be evidence based. With Canadians and people around the globe already living with climate change impacts, this cap needs to be put in place quickly. We recommend that Canada set an interim 2030 emissions cap for the sector by the end of 2022. This is to provide industry the clarity it needs to make investments now to reach that 2030 target. The interim cap must align with Canada's 40% to 45% emission reduction commitment. It should be consulted on in 2023 and finalized by the end of that same year. We also need five-year milestones that linearly and predictably drive sector emissions to zero by 2050 to align with Canada's net-zero legislation. This is to ensure that we aren't allowing industry to back-load those reductions.
Our second recommendation is that is everyone in the sector needs to do their fair share. Government should establish disincentives for operators exceeding their share of the sectoral cap, which could include things like financial penalties, removal of tax incentives or loss of trade protections under the federal output-based pricing system. Everyone needs to do their fair share.
Thirdly, we need to incent the energy and industries of the future. The cap shouldn't be used by governments or industry as a mechanism to grow Canada's oil and gas industry. The International Energy Agency is clear that under its announced pledges—this is what nations committed to prior to the Glasgow climate summit—global oil production will decline to 90 million barrels per day in the early 2030s and to 80 million barrels per day in 2050. Global gas production will plateau in just three years—by 2025—and remain flat thereafter. The evidence is clear: Canada's future economy will be less reliant on oil and gas exports and therefore, the Government of Canada should avoid investing in industries that will not be growing beyond this decade.
Fortunately, Canada is well positioned to be a leader in clean energies, from our abundance of renewables to blue hydrogen potential while transitioning to cleaner green hydrogen. We have the metals, minerals and opportunities to be a leader in batteries and other storage technologies, along with carbon capture and storage. We can use our clean energy to produce low-carbon metals, minerals, steel, cars and other manufactured products.
If Canada acts on it current climate commitments, there are projected to be 640,000 clean energy jobs, which is an increase of almost 50%, or 209,000 jobs, over this decade. These are diverse, blue-collar and white-collar jobs. They're in rural and urban communities in every province across the country.
Lastly, I would bring to the committee's attention that the carbon intensity of oil produced from Canada's oil sands remains the highest globally. That is why a cap on oil and gas emissions followed by five-year emissions reduction milestones is critical if Canada is to reach its climate targets.
Thanks for the opportunity to speak with you. I look forward to questions and discussion.