Examining Oil and Gas Advertisements: How Accurate Are They?

You may have noticed a lot of oil and gas advertising recently, mainly driven by the Government of Alberta and Cenovus Energy. 

In October, Alberta launched its $7-million “Scrap the Cap” campaign in five provinces opposing the federal government’s emissions cap on oil and gas. Cenovus ads, stressing the need for a “strong oil and gas industry,” have also popped up over the last few weeks on television, radio and on billboards in cities like Toronto and Vancouver.

The emissions cap was introduced as a way to reach Canada’s goal of reducing its greenhouse gas emissions by 40 to 45 per cent below 2005 levels by 2030. Canada’s oil and gas sector contributes roughly 31 per cent of our current emissions.

These ads point to dire consequences if the oil and gas industry is disrupted. Cenovus’s ads imply, for example, that without a strong oil and gas industry, Canadians will get less for their dollar.

But how accurate are these claims? 

Claim: The federal government’s proposed emissions cap is a production cap.

On the website of Alberta’s Scrap the Cap campaign, it reads, in all caps: “Ottawa’s energy production cap will hurt Canadians from coast to coast to coast.” It’s the main message of the ad campaign.

The federal government has not put a cap on the production of oil, but on emissions from the sector. 

So, if Ottawa is proposing an emissions cap, how can Alberta get away with saying it’s a production cap?

The answer: different standards.

“In part, they get away with it because they’re government, and so they’re not held to the same standards as businesses in Canada,” said Martin Olszynski, chair in energy, resources and sustainability at the University of Calgary’s faculty of law.

“There are standards in advertising, and people can complain when an ad is misleading. But when you look at those forms, and you engage in that sort of accountability, what you learn very quickly is that it doesn’t apply to governments.”

Reducing methane in the sector is really important … It really is the low-hanging fruit of emissions reduction in the oil and gas sector.- Janetta McKenzie, Pembina Institute

But there’s also another way of looking at it.

Ken Jull, adjunct law professor at University of Toronto, said the way the Government of Alberta may be framing it is that they believe there’s no way they can reach the emissions cap without cutting production. 

“Proponents of the other side are going to say, ‘No, no,'” he said. “‘There’s a way to meet the emissions cap and still be able to produce because there’s alternatives, such as buying [carbon] credits and doing a bunch of other things.'”

CBC reached out to the Government of Alberta for comment.

“Three different reports from reputable international firms were released over the past 12 months all showing the negative impacts of a cap and that it will require production cuts,” said Ryan Fournier, a press secretary with the government, in an email.

“Three firms — S&P Global, the Conference Board of Canada and Deloitte — have shown that a cap will hurt Canada’s economy, including analysis that predicts a 1 million barrels per day production cut, $600 million to $1 trillion reduction of Canada’s GDP from 2030-40, and up to 151,000 job losses by 2030.”

A pumpjack draws out oil from a well head near Calgary in September 2022. (Jeff McIntosh/The Canadian Press)

But Janetta McKenzie, interim director of the oil and gas program at the Pembina Institute, a think-tank focused on energy, said the analyses Alberta and others are using leave out some critical information.

“Some of the Scrap the Cap messaging and other messaging has been based on a few of these independent modelling studies. These are sort of submitted as proof points that this will be a production cap,” she said.

“We’ve looked at those studies, and we think that they are not really taking into account the potential options for the sector. A lot of those studies assume that very little further meaningful action is done to reduce emissions in the oil and gas sector, and therefore the only choice is to cut production.”

The Pembina Institute also released a technical backgrounder that found the emissions cap could be met without cutting production.

“Reducing methane in the sector is really important. We know that methane is a very powerful and potent greenhouse gas. It can cause a lot of warming, but it also doesn’t live in the atmosphere for as long as something like carbon dioxide,” McKenzie said. “It really is the low-hanging fruit of emissions reduction in the oil and gas sector.”

Claim: An emissions cap will increase costs for Canadians.

Both Cenovus and Alberta either make this claim or allude to it.

One of Cenovus’s ads reads, “Without a strong oil and gas industry, we’d all get less for our dollar,” with an outstretched hand either holding a tiny bag of groceries or a tiny cup of coffee. On the Scrap the Cap website, it says, “A production cap will make groceries, gas and all of life’s necessities even more expensive.”

Cenovus has been running ads like this one, seen in Toronto. (Nicole Mortillaro)

Not everyone agrees that’s necessarily the case.

When it comes to food prices in particular, “I think [the ads are] exaggerating that there would be a material impact there,” said Andrew Leach, professor of economics and law at the University of Alberta.

Again, he said it would depend on whether the industry — including smaller oil and gas companies — decided whether or not to cut production, which would have an effect on fuel prices.

McKenzie noted the Pembina Institute feels cutting emissions is possible without cutting production. 

“In our opinion, there are options for the sector to reduce emissions to comply with this cap without having a really devastating impact on on the Albertan economy or the Canadian economy,” she said. “And our analysis is based largely on what industry themselves have said that they can do and said that they plan to do.”

McKenzie points to recent claims by Pathways Alliance — a consortium of Canada’s largest oilsands companies, which includes Cenovus — about efforts in carbon capture and storage (CCS) that would be a way to reduce emissions. It was part of an advertising campaign that was stopped after new provisions were added to the Competition Act that targeted greenwashing, or making misleading claims about the environmental benefits of some action or product.

The Quest carbon capture and storage facility in Fort Saskatchewan, Alta., is designed to capture and safely store more than one million tonnes of CO2 each year, an equivalent to the emissions from about 250,000 cars. (Jason Franson/The Canadian Press)

Olszynski also noted Alberta supported CCS as a way to reduce its emissions.

“[Alberta is] talking out of both sides of its mouth, because on the one hand, it touts and supports CCS and those kinds of technologies,” he said. “And the other hand, it says, ‘No, it’s not actually feasible, and we won’t be able to do it. And therefore the only way that we’ll be able to essentially meet these emissions targets is by reducing production.'”

CBC reached out to Cenovus about their ads.

“Cenovus believes the energy debate in Canada is an important one, and that we have a voice that should be heard. Advertising is one of the things we do to advocate for our industry and our position that responsibly produced Canadian oil and gas is a major contributor to the nation’s prosperity and economic well-being and should continue to do so,” they said in an email.

“The message is that oil and gas are important parts of our day-to-day lives that are taken for granted and there is not a reliable, affordable alternative at this time.”  

Melissa Lem, president of the Canadian Association of Physicians for the Environment (CAPE), said the fossil fuel industry has been “endlessly smart” in their messaging over decades.

“They originally convinced huge swaths of the population … that climate change didn’t exist and now, the effects of climate change are pretty irrefutable,” she said. “Now they’re moving on to greenwashing to convince us we don’t need to move as quickly to transition [to low-carbon solutions], and that their products are not as bad as we thought, and that they’re responsible, [and that] reducing emissions will increase our cost of living by huge amounts, when credible analyzes tell us they won’t.”

Claim: The emissions cap will mean a loss of 150,000 jobs.

Some of the analysis of job losses in the oil and gas industry that Alberta cites comes from research conducted by the Conference Board of Canada, which was published on Jan. 31. 

In April, the Pembina Institute came out with an analysis of the Conference Board’s findings and concluded it contained flaws, citing issues such as modelling that only extended to 2030 and the omission of decarbonization projects.

Leach, who said he’s not a fan of the Alberta ad campaign, noted that even if new jobs are created in the renewable industry, the technical skills of oil and gas workers wouldn’t automatically transfer to wind and solar.

“There isn’t like this magical decision that Alberta can make to say, we’re just going to move into this different industry, and we’re going to have, you know, the equivalent of Fort McMurray, but we’re going to have it in, I don’t know … Drumheller,” he said.

A wind turbine overshadows a grain elevator near Pincher Creek, Alta., in 2016. (Jeff McIntosh/Canadian Press)

“Even if there are green energy jobs in other parts of the country, it doesn’t necessarily mean that the people losing their jobs in oil and gas are going to get them.”

McKenzie said there’s more to it than just jobs in the short term.

“Investing in [carbon capture] technologies to reduce emissions in the sector will create some new jobs in the sector, will help future-proof it to operate in a low-carbon world,” she said. 

“That’s to say nothing of the cost of inaction and the cost of not reducing emissions, kind of writ large, and the financial impacts of climate change on Canadians.”