Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. Canada
  4. Toronto Stock Exchange
  5. ATCO Ltd.
  6. News
  7. Summary
    ACO.X   CA0467894006

ATCO LTD.

(ACO.X)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Canada's climate plan charts hard road ahead for high-polluting oil sands

06/22/2021 | 01:43am EDT
FILE PHOTO: The Suncor tar sands processing plant near the Athabasca River at their mining operations near Fort McMurray.

WINNIPEG, Manitoba/CALGARY, Alberta (Reuters) - Canada has set ambitious targets for slashing emissions to fight climate change, but faces a stiff challenge: not only is its economy dependent on oil production, but the Canadian oil industry's carbon emissions are among the world's highest for every barrel of oil it pumps.

The Canadian oil patch exemplifies the most vexing problem of the energy transition. In the long term, Canada needs to cut its dependence on the energy sector that accounts for 10% of its economy, as the world moves away from planet-warming fossil fuels. In the short term, Canada needs to clean up the process of extracting oil to comply with national emissions targets.

The northern Alberta oil sands spew three to five times the global average emissions per barrel of oil equivalent, according to Rystad Energy, because extracting crude from Alberta's gumbo-like deposits of oil, sand and clay requires additional energy.

Just one of the nation's five biggest oil companies, Suncor Energy Inc, has a plan to cut emissions outright. The producers say they need extensive government subsidies for carbon capture and other technologies such as small modular reactors (SMRs) to meet climate goals.

"There is not a dial on the wall where we can dial 'low carbon'," said Cenovus Energy Chief Executive Alex Pourbaix. "To decarbonize significantly takes capital - massive quantities of capital over many years."

Prime Minister Justin Trudeau set in April a national goal to cut emissions 40% to 45% by 2030 from 2005 levels, up from a previous goal of 30%. Pourbaix calls that goal "extraordinarily ambitious," although the United States is pledging a 50-52% cut over the same period.

Cenovus, Canadian Natural Resources, Suncor, Imperial Oil and MEG Energy this month formed an alliance to cut emissions. But the producers are aiming at Canada's 2050 net-zero commitment, and their interim goals fall short of Trudeau's 2030 target.

A Suncor spokesperson said the companies aim to reduce their emissions by one-third every 10 years. The plan centers around government and industry funding a hub to capture carbon, but it includes no details about capacity or cost. Suncor plans to cut absolute emissions 34% by 2030, even as it boosts oil production.

Trudeau's own environment ministry projects oil sands emissions will climb to a record 95 million tonnes of carbon dioxide equivalent by 2030, from 83 million in 2019.

Alberta's Ministry of Environment and Parks said Canada's new emissions target will require action across all parts of the economy and significant support from the federal government.

"Targets do not mean much without a realistic plan to achieve them," spokesman Paul Hamnett said in an email.

The industry has reduced emissions per barrel 21% from 2009 to 2019, according to consultancy IHS Markit, but its absolute emissions have risen as output has grown.

"We need to find pathways to reducing emissions in every major sector of the economy that produces significant emissions," Environment Minister Jonathan Wilkinson said. Government officials did not directly answer questions about the alliance or federal expectations for oil sands emissions cuts.


Canada's oil sands emissions

STORING CARBON

The oil sands' three big hopes are carbon capture facilities, steam-reduction technology, and deploying renewables to power the oil sands.

Carbon capture involves storing or reusing carbon emissions from fossil fuel sources so they do not enter the atmosphere. The technology, however, has little commercial viability without subsidies.

Ottawa and producers are arguing over the structure of a carbon capture tax credit. Producers say they face a disadvantage against U.S. competitors because projects that reinject carbon into the ground to extract oil, called enhanced oil recovery, do not qualify for credits.

IHS Markit analyst Kevin Birn said the technology would allow producers to redeploy carbon and generate revenue by unlocking additional crude.

"We've been at pains to make (Ottawa) understand that this is quite new and expensive technology," Pourbaix said. Federal officials did not comment directly on carbon capture.

Canadian Natural Resources is counting on carbon capture most to cut emissions, but will not commit to matching the 2030 target until it better understands the government's incentives, said President Tim McKay.

Suncor, along with utility ATCO Ltd , is developing a multi-billion-dollar project in Alberta to produce clean hydrogen and capture carbon, but will only go ahead with government aid.

Suncor CEO Mark Little said the project would cut emissions by 2 million tonnes annually, or 0.3% of Canada's total.

Emissions would drop if the oil sands drew power from SMRs instead of from natural gas, but that technology is more expensive and would meet only a fraction of producers' needs, said Ken Darlington, vice-president of corporate development at USNC-Power.

While producers have cut carbon intensity by reducing steam use with solvents, commercial deployment is slow because of the challenge of economically recovering solvent after using it, McKay said.

The International Energy Agency, in a report last month, noted that cutting emissions to net zero by 2050 will be difficult unless the amount of carbon captured globally rises to 7.6 billion tonnes annually from a current 40 million tonnes.

"It's net-zero, not zero," said Suncor's Little. "Some of the hard-to-decarbonize industries, we are going to have to offset emissions rather than eliminate them."

(Reporting by Rod Nickel in Winnipeg and Nia Williams in Calgary; additional reporting by David Ljunggren in Ottawa; Editing by Marguerita Choy)

By Rod Nickel and Nia Williams


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ATCO LTD. -2.11% 44.13 Delayed Quote.20.94%
CANADIAN NATURAL RESOURCES LIMITED 1.36% 41.73 Delayed Quote.36.42%
IMPERIAL OIL LIMITED 2.25% 34.95 Delayed Quote.44.66%
MEG ENERGY CORP. 0.50% 8 Delayed Quote.79.78%
SUNCOR ENERGY INC. 0.77% 24.75 Delayed Quote.15.93%
All news about ATCO LTD.
07/30Utilities Down As Investors Rotate Into Inflation-Linked Sectors - Utilities ..
DJ
07/30ATCO : And nunavut petroleum joint venture wins 10-year fuel supply contract
AQ
07/29Atco Posts Higher Q2 Profit; ATCO, Nunavut Petroleum JV Win 10-Year Fuel Supp..
MT
07/29Atco Ltd. Reports Earnings Results for the Second Quarter Ended June 30, 2021
CI
07/29ATCO : & Nunavut Petroleum Joint Venture Wins 10-Year Fuel Supply Contract
AQ
07/29ATCO : Reports Higher Second Quarter 2021 Adjusted Earnings
AQ
07/29ATCO : Earnings Flash (ACO.X.TO) ATCO Reports Q2 Adj EPS $0.70 Per Share
MT
07/27CANADIAN UTILITIES : Launching New Normal Course Issuer Bid
MT
07/22ATCO LTD. : Eligible Dividends
AQ
07/22ATCO Ltd. Declares Quarter Dividend, Payable on September 30, 2021
CI
More news
Financials
Sales 2021 4 264 M 3 401 M 3 401 M
Net income 2021 318 M 254 M 254 M
Net Debt 2021 8 992 M 7 172 M 7 172 M
P/E ratio 2021 14,9x
Yield 2021 4,06%
Capitalization 5 046 M 4 019 M 4 025 M
EV / Sales 2021 3,29x
EV / Sales 2022 3,15x
Nbr of Employees 6 177
Free-Float 66,4%
Chart ATCO LTD.
Duration : Period :
ATCO Ltd. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends ATCO LTD.
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 8
Last Close Price 44,13 CAD
Average target price 46,88 CAD
Spread / Average Target 6,22%
EPS Revisions
Managers and Directors
Nancy C. Southern Chairman & Chief Executive Officer
Siegfried Willi Kiefer President & Chief Strategy Officer
Dennis A. DeChamplain Chief Financial Officer & Executive Vice President
Alan M. Skiffington Chief Information Officer & Vice President
Marshall Frederick Wilmot Chief Digital Officer
Sector and Competitors
1st jan.Capi. (M$)
ATCO LTD.20.94%4 019
NATIONAL GRID PLC7.27%45 844
SEMPRA3.59%39 958
ELECTRICITÉ DE FRANCE-17.37%39 879
ENGIE-8.29%32 899
E.ON SE15.91%32 475