Canada's second-largest oil producer, Suncor Energy (SU.TO), told Canadian lawmakers on Monday that the company remains committed to cutting carbon emissions, after its CEO's earlier comments raised concerns the company was backtracking on climate pledges.
CEO Rich Kruger also warned that unpredictability in Canadian energy policy is scaring away capital investment. Last week Canada's Supreme Court ruled that a federal law assessing the environmental impact of major projects like oil sands plants was largely unconstitutional.
Kruger, who appeared before a Canadian parliamentary committee in Ottawa to answer questions on Suncor's climate strategy, had said on an earnings call in August that the company had put a "disproportionate emphasis" on the longer-term transition away from oil and gas to cleaner forms of energy.
Those comments, made during Canada's worst-ever wildfire season, sparked condemnation from environmental groups and were described as "disappointing" by Canadian Environment Minister Steven Guilbeault.
Kruger told the natural resources committee on Monday that Suncor was still aiming for net-zero emissions by 2050, and would focus on decarbonizing oil production and growing its renewable fuels businesses.
"Our commitments on decarbonization and being part of the transition have not changed at all since I've taken over in this position six months ago," Kruger said.
Environmental Defence, an advocacy group, described Kruger's testimony as "greenwashing".
Kruger, a former Exxon Mobil (XOM.N) executive, took the helm at Suncor in April after former CEO, Mark Little, resigned following several years of operational upsets and a string of worker fatalities.
Kruger said his comments in August related to Suncor needing to have a strong oil business in order to be part of the energy transition.
"For us to be a part of the solution for the long term, we have to do today's business very well, and if you look back at the track record over the last several years at Suncor, that cannot be said," he added.
Calgary-based Suncor is counting on carbon capture and storage and efficiency measures to help reach its climate goals. Last year, it sold its wind and solar business to focus on hydrogen and renewable fuels.
POLICY UNCERTAINTY
Canada is the world's fourth-largest crude producer and its oil and gas sector is the country's highest-emitting industry.
Prime Minister Justin Trudeau's Liberal government has faced opposition from industry and oil province Alberta while trying to introduce climate and environment legislation.
Kruger said companies needed certainty before making major investment decisions.
"If the hurdle is set at a certain height, that's fine. We just want to know it's not a moving target," Kruger said. "One of the challenges we have faced here for some time now is a bit of unpredictability and uncertainty, which then quite frankly scares away capital."
