Oil and gas is Canada’s largest industry and its largest source of GHG emissions. Canada is the world’s fourth largest oil and fifth-largest gas producer, concentrated primarily in Alberta, Saskatchewan, British Columbia, and Newfoundland and Labrador. The industry emitted roughly 208 Mt of CO2e in 2024 with oil sands as the single largest source. Production emissions account for only one-fifth of the full lifecycle footprint of the oil and gas industry.
The most effective long-term approach to cut oil and gas associated emissions is to electrify demand – displacing combustion in vehicles, buildings, and industry – while driving production emissions down via methane abatement, upstream electrification, efficiency, and carbon capture. While the sector is highly profitable and current prices reward expansion long-lived assets create lock-in and stranded-asset risk. Reducing emissions in oil and gas requires the reduction of production emissions, preparation of producing regions for a structural decline in demand, and positioning Canada’s skills and infrastructure for adjacent opportunities.
208 Mt driven by production growth, with oil sands the dominant source.
Oil and gas remain highly profitable and deep decarbonization competes with production returns.
Retrofits are costly or infeasible, and continued conventional investment deepens lock-in and stranded-asset risk.
Federal-provincial jurisdiction, shifting politics, and evolving U.S. policy cloud long-term capital decisions.
CCS in remote oil sands remains expensive.
Macroeconomic impacts on producing regions as electrification accelerates.
Timing shaped by Canadian competitiveness and by carbon border mechanisms.
Ensuring liabilities are funded rather than deferred to future taxpayers.
Place-based, proactive adjustment for geographically concentrated producing regions.
A managed, predictable transition that does not strand assets before their time.
Sector production emissions and emissions intensity per barrel.
Upstream methane emissions, tracked against the 2030 target.
Pace of domestic electrification that reduces fossil demand.
Leverage existing labour, industrial expertise, and infrastructure to support the energy transition.
Alberta's gas resources, CCS expertise, and geological storage give a cost edge in low-carbon hydrogen.
Geothermal, renewables, critical minerals, carbon-management services, and lithium from oilfield brines.
Scores are grounded in the sources cited throughout each sector assessment, then reviewed by experts and industry stakeholders to confirm how each pathway elements criteria are ranked.
economic viability score
Economic Viability description
