The chair of one of Canada’s largest companies in the oil patch says the sector can remove a significant amount of carbon from the economy with just a “fraction” of the billions of dollars that Ottawa is spending to build its battery industry.

Alex Pourbaix, executive chair of Cenovus Energy Inc., said Canadian fossil fuel companies are trying to remove 22 megatonnes of carbon dioxide by 2030 by using various technologies such as carbon capture and storage and nuclear energy.

“I can’t imagine that any level of battery technology is going to achieve that kind of decarbonization,” he said.

Cenovus is part of an organization called Pathways Alliance along with five of the other largest oilsands companies, including Suncor Energy Inc. and Canadian Natural Resources Ltd., and Pourbaix said the government should support the alliance’s goals.

“We are asking for a fraction of what the government has already given, as I understand it, to the battery manufacturers,” he said. “If the goal here is to remove carbon from the economy at the lowest average cost, then I would suggest the government should take a very, very hard look at continuing to support our industry.”

In 2023, Canadian governments signed agreements with battery and car makers such as Stellantis NV, LG Energy Solution Ltd., Volkswagen AG and Northvolt AB to build three battery plants in Canada, with governments offering the companies performance incentives worth billions of dollars in an effort to match incentives provided by the United States.

Aside from battery plants, Canada has also taken steps to boost its mining sector and encourage companies to mine materials such as lithium, copper and rare earths, which are needed to build batteries that power electric vehicles. For example, the federal government allocated a record $3.8 billion to its critical minerals strategy in the 2022 budget.

These steps are part of Canada’s goal of building a new battery industry as it hopes to become an important source for key materials as countries gradually transition away from fossil fuels to meet their climate targets and rely more on electricity generated from batteries.

Pourbaix, though, doesn’t believe the world can stop completely depending upon fossil fuels anytime soon. He said the use of renewables will increase, but oil and gas will continue to be used for decades and that nuclear would play a “big role” as well.

“A lot of Canadians when they hear the word energy transition have sort of been conditioned to believe that, ‘Well, we are just going to take all this fossil fuel and replace it with renewables,’” he said.  “Anyone who has taken the most cursory review of the economics … knows that that is going to be incredibly different.”

About US$1.7 trillion of the total US$2.8 trillion expected to be invested globally in energy this year is earmarked for clean technologies, including renewables, electric vehicles and nuclear power, according to the International Energy Agency’s World Energy Investment report published in June. The remainder, slightly more than US$1 trillion, is going to coal, gas and oil.

But Pourbaix said the facts suggest that the world sets a new global demand record for oil and gas every day and it will take a long time to move away from that, especially in a big, cold country such as Canada.

“If we get this wrong, people will die. Having the lights go out when its minus 40, is an existential threat,” he said. “So, we have to do (the energy transition) in a proper way that preserves the reliability and affordability of the grid while at the same time decarbonizing.”

• Email: nkarim@postmedia.com

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