Enbridge on Friday became the largest company in the North American oil industry to say it will try to eliminate all net emissions of greenhouse gases by 2050, joining major European producers in addressing climate change concerns.
Calgary-based Enbridge, which also reported a smaller-than-expected quarterly profit, said it hopes to reduce the intensity of greenhouse gas emissions by 35% by 2030.
Prime Minister Justin Trudeau's government, which has set a goal of making Canada carbon neutral by 2050, launched a national program on Jan. 1 to better measure and reduce methane emissions.
Reported greenhouse gas emissions from Canada's oil patch have more than doubled in the first half of the year as changes to how they are measured revealed a more extensive picture of environmental damage.
Enbridge, Canada's largest pipeline operator, follows similar or tougher pledges by Royal Dutch Shell, BP, Total and Repsol, while top U.S. producers Exxon Mobil Corp. and Chevron Corp. have made clear they are not following suit.
"It's a very public demonstration of our level of commitment to making progress on these important criteria and issues that matter to society and to our stakeholders," Peter Sheffield, Enbridge's chief sustainability officer, told Bloomberg News.
Enbridge's plan doesn't include a net-zero target for scope 3 emissions — the ones stemming from the combustion of fossil fuels by cars, airplanes, homes and factories, according to Bloomberg. For now, the company said it will address those by helping suppliers and customers to cut emissions in line with the recommendations of the United Nations' Intergovernmental Panel on Climate Change.
To meet its targets, the company said it would invest in lower carbon infrastructure as well as in wind and solar power generation, hydrogen and renewable natural gas.
Chief Executive Al Monaco made clear during a conference call with analysts that the company believes a dip in oil demand because of the coronavirus pandemic will be short-term.
"Now, a more radical change in consumption is possible, but not by 2040 in our view," he said. While natural gas is a bridge it's an "awfully long bridge."
Enbridge has long-term contracts with customers that it believes won't change, he said.
"Oil demand [will continue] to rise then stabilize, and that's driven by accelerating growth in developing countries, increasing petchem demand, I think everyone understands the reasons for that, and oil retains a large share of the transport market," he said.
So projects such as a proposed $2.6 billion pipeline across northern Minnesota connecting the Calgary oil fields to Enbridge's Superior, Wis., terminal are still needed.
The pipeline, a replacement for the eroding current Line 3, is opposed by several environmental groups and American Indian bands.
Monaco said he expects an administrative law judge decision last month clears the way for a decision next week on a key Army Corps permit.
The company, he said, already has received a few of the needed Minnesota Department of Natural Resources permits.
"So no change really to construction timing at six to nine months, once we get all the permits," Monaco said.
The pipeline operator earned 37 cents a share in the quarter, lower than the 41 cents analysts expected.
The slump in demand because of the pandemic hurt the volumes transported in Enbridge's mainline system, the company said.
A sharp decline in global crude prices and demand has battered Canada, the world's fourth-largest crude producer, which was already facing steep discounts for its oil.
Fuel demand, however, has picked up with the easing of restrictions, but a resurgence in COVID-19 infections could derail that recovery.
Monaco said he expects a gradual pace of demand recovery over the balance of 2020 and into 2021.