Imperial Providing Energy Security while Reducing Emissions

Source: 6/7/2024, Location: North America

Imperial (TSE: IMO, NYSE American: IMO) CEO Brad Corson, presented to the federal Standing Committee on Environment and Sustainable Development on June 6 to share how the company is working to supply Canada’s energy needs reliably, safely and securely, while providing benefits to the economy and taking action to reduce emissions.

Opening statement

Good afternoon, Mr. Chair, and members of the committee.

In this meeting today, and every day that Imperial carries out our business across the country, we do so on the traditional territories of First Nations, Métis and Inuit who have lived on and cared for these lands for centuries. I, and Imperial, come here today fully committed to our reconciliation journey.

Imperial produces oil and gas and manufactures petroleum products that are essential to Canada’s energy security needs, vital to improving the standard of living for all Canadians, while significantly benefitting the Canadian economy in the form of job creation and supporting federal and provincial treasuries with substantial tax and royalty revenues.

Recent years have highlighted the importance of both doing our part to provide energy supply security and taking action to reduce emissions in support of a net-zero future while growing value for our shareholders and other stakeholders. Imperial has worked diligently on emission reduction roadmaps and business plans to lower GHG intensity in our operations and provide lower life-cycle emission product solutions to our customers.

Our decarbonization strategy includes lowering intensity and absolute emissions at our upstream and downstream assets, lowering the emissions intensity of our products for customers, and launching a low carbon solutions business to help others decarbonize in ‘hard to abate’ sectors.

I am pleased to share that Imperial has implemented a company-wide goal to achieve net-zero scope 1 and 2 emissions, from operated assets by 2050 through technology advancements and collaboration with government and our industry partners.

Building on Imperial’s previous success of reducing GHG intensity in our operated oil sands facilities by more than 20 percent between 2013 and 2016, Imperial aims to further reduce the GHG intensity of these assets by 30 percent compared with 2016 levels by the end of 2030. I am pleased to note that we have already achieved approximately a 10 per cent reduction in year-end greenhouse gas emissions intensity, compared to 2016.

The company is making significant progress and plans to achieve this reduction through many initiatives, including energy efficiency improvements, next generation solvent technologies at our Cold Lake operation, using renewable diesel in our mining fleet at Kearl, and carbon capture and storage as part of our collaboration with the Pathways Alliance.

Last month we started production at our Grand Rapids project at Cold Lake using technology expected to reduce GHG emissions intensity up to 40 percent compared to traditional methods. We are also piloting other technologies that could reduce GHG emissions intensity by up to 90 percent over traditional recovery methods.

Right now, we are building Canada’s largest renewable diesel project at our Strathcona Refinery in Edmonton, which starting next year will produce more than one billion litres of renewable diesel annually from locally sourced agricultural feedstocks.

This renewable diesel will help reduce emissions for our customers by about 3 million metric tons per year. We are investing $720 million in this facility, which has created 600 construction jobs and could be foundational for creating a low-carbon hydrogen value chain in Alberta.

Imperial is also exploring the potential for lithium from brine extraction with an eye to create a domestic supply chain of a key critical mineral for use in EV batteries. We have also tested bio-based co-processing at our refineries to deliver carbon intensity reductions in our finished products.

For greater detail on these initiatives, Imperial has shared our latest Advancing Climate Solutions report with the committee.

Over Imperial’s 140-plus year history, some business fundamentals have not changed: the investments we make are long-term, and we operate in a global market that is subject to the cyclical nature of commodity prices. This cycle results in good years, including 2022 which was our most profitable, which followed 2020, our least profitable, when Imperial reported a net loss of over $1.8 billion dollars.

Through it all, Imperial has steadfastly reinvested in the business, including more than $2.5 billion spent on research and development over the last 20 years.

Recognizing successful technologies can take decades to commercialize, effective strategies and solutions to supply secure, affordable, accessible, reliable energy and reduce emissions is paramount as we work through the energy transition. Public policy, technology and investment must intersect to close the gap between reality and ambition.

Only through joint efforts between government, industry, customers, and Indigenous peoples will Canada be successful in unlocking its potential as a global energy leader in a lower-emission economy. On behalf of the over 5,000 employees of Imperial, I am very proud of the work we do to reliably deliver energy for Canadians as we provide full value of this resource for Canada and our shareholders in support of a lower-emission future.

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