CNRL nears goal in cuts to methane emissions

CA L GA RY • As energy lobby groups spar with governments over methane emissions, Canada’s largest oil and gas producer is touting its own methane reductions.

“Since 2014, we have reduced our methane emissions in our conventional and thermal operations by 37 per cent, well on our way to achieving the upcoming 45-per-cent methane emissions reduction target proposed in upcoming methane r e g u l at i o n s ,” president Steve Laut said on an earnings call Thursday.

Energy companies’ methane emissions have become a focal point in discussions with provincial and federal governments on climate regulations. Alberta’s NDP government is set to release a draft of its methane rules any day and the federal Liberals are in a consulting period over targets released in May.

The Canadian Association of Petroleum Producers, the country’s largest energy industry association, repeated its call this week for governments to loosen rules on methane reductions. CAPP is asking governments to adopt a “fleet average” approach, allowing companies to reduce emissions across its fleet by 45 per cent rather than at each specific site.

“The CAPP approach is very common sense and it actually gets methane emissions down more effectively and faster,” Laut said, adding the fleet-average approach would prevent job losses across the energy industry. “I don’t think Alberta can afford to lose 4,000 jobs at this point in time,” he said.

In a release earlier this week, CAPP put the number of jobs at risk from a sitespecific methane reduction strategy at 7,000.

Laut said he was confident the provincial government would see the merits of CAPP’s approach and that energy companies and environmental organizations are “aligned” and committed to methane-reduction targets.

Alberta Energy Minister Marg McCuaig-Boyd said in a statement that more details and “next steps” in the government’s methanereduction plan would be unveiled soon but did not provide a date. She did indicate energy companies’ efforts to reduce emissions had been taken into account.

“Their early action and commitment to working with us to get this right means we are well on our way to an Alberta-made plan that puts the jobs of hardworking Albertans and a strong economy front and centre,” McCuaig-Boyd said of oil producers.

Laut also highlighted his company’s approach to reducing carbon emissions and noted Canadian Natural owns carbon capture and storage (CCS) technology at its Horizon oilsands plant, through its stake in the Shell Canada Ltd.-operated Scotford upgrader and at the Northwest Refinery.

The Calgary-based company acquired its stake in the Scotford upgrader and related CCS project as part of a larger $12.7-billion deal with Shell struck earlier this year, which helped boost the Calgary-based producer’s production over the 1 million barrels per day threshold in the quarter for the first time.

Rising production and falling costs helped CNRL reverse earlier losses and record $782 million in net earnings in the third quarter, up from a $589-million net loss in the same period last year.

The company also announced it had completed construction on the third expansion phase of its Horizon oilsands mine and analysts expect production to ramp up to 240,000 bpd at the project by December.

“I think the market is becoming more in-balance, you’re seeing inventories coming down,” Laut said, adding that while industry fundamentals are improving, he expects oil prices to remain volatile as shale drillers in Texas’ Permian basin drill more at higher prices.

Canadian Natural is scheduled to release its budget for 2018, which would include assumptions for oil and natural gas prices, next week.