How Alberta’s biggest oil companies are still raking in billions

Suncor Energy Fort McMurray

The Narwhal dug into the financial statements of the five biggest oil companies operating in Alberta to get a sense of how they’re really faring. Despite the ‘tough times,’ their CEOs are still taking home millions annually — including generous bonuses

Albertans have heard it time and time again: it’s a tough time for the province’s oil and gas industry.

There are the suggestions from the prime minister that Alberta is in “crisis” as a result of low energy prices. The country’s natural resources minister has weighed in too, noting that “Alberta hurts.” There are headlines declaring “tough times” for oil producers and warning that the Alberta government is on a path toward “fiscal disaster.”

With so many gloomy headlines, one would be forgiven for thinking that the major oil companies operating in the province — the so-called ‘Big Five’ — are hurting, too.

But are they?

In November, the Edmonton-based Parkland Institute released a reportthat suggested the opposite.

The Big Five, which the report says control 79.3 per cent of Canada’s productive capacity of bitumen, are still posting profits, and in some cases they’re sizeable — with profit margins of upward of 13 per cent, according to the Parkland Institute.

In Canada, the Big Five are Suncor Energy, CNRL, Cenovus, Imperial Oil and Husky Energy.

Suncor Energy Centre building in Calgary

Suncor Energy Centre building in Calgary, Alta. Suncor has the most assets, highest revenue and most employees of the Big Five, according to the Parkland Institute. Photo: Bernard Spragg / Flickr

The report compares the Big Five’s gross profits with the government of Alberta’s income for 2017, which was $47.3 billion. According to Parkland’s analysis, the Big Five, taken together, brought in almost the same amount in aggregate profits in 2017 — $46.6 billion.

Alberta’s income for the whole province is roughly equivalent to the total profits of the five largest energy companies, according to Parkland’s calculations.

The Parkland report pointed out that, “in 2016, the average profit margin for all industries in Canada was 7.8 per cent. Three of the Big Five — Suncor, Cenovus and CNRL — had net profit rates above 13.5 per cent in 2017, and Cenovus’s profit margin was an impressive 19.4%.”

Parkland suggests that the profit margins for some of the country’s largest energy companies far exceed that of the majority of other businesses. MORE


Climate change a ‘serious concern’ for Canadians, poll finds — even if Albertans don’t feel the same

Alberta government only invites industry to consultation on new emissions regulations

First the province scrapped its carbon tax. Now clean energy advocates say they’re being shut out of talks about the province’s proposed new plan to deal with heavy polluters

Minister of Environment and Parks Jason Nixon (middle), Minister of Energy Sonya Savage and Minister of Agriculture and Forestry Devin Dreeshen announce summer engagement on a new proposed emissions reduction system that would replace the carbon tax. Photo: Government of Alberta via Flickr

The Government of Alberta announced Tuesday it is beginning consultation on the emissions reduction system it hopes will replace the province’s existing carbon pricing for large emitters — but The Narwhal has learned no organizations working on environment or climate change issues have been included on the government’s list of stakeholders

Minister of Environment and Parks Jason Nixon said at a news conference that the government is now “seeking feedback on an improved way to manage emissions” — the province’s proposed Technology Innovation and Emissions Reduction (TIER) system, which focuses on heavy emitters.

Nixon told reporters that government representatives will meet with approximately 150 stakeholders this week in Calgary, including representatives of the oil and gas, agriculture, chemicals, mining, forestry and electricity industries.

list of the stakeholders obtained by The Narwhal does not include any public interest groups.

The Pembina Institute, a clean energy think tank started in Drayton Valley, Alta., in the 1980s, told The Narwhal it was not invited to participate in the consultations.

“It’s highly unusual,” Simon Dyer, executive director of the Pembina Institute, said in an interview.

Dyer said he heard first about the consultation in a news story following the government’s announcement.

“It’s a worrying signal about how this government is going to collect input from stakeholders,” he said.

Jess Sinclair, press secretary for Alberta Environment and Parks, told The Narwhal by email that “because the [emissions reduction] framework is designed with heavy industry in mind, we are beginning the consultation process focusing on affected industries.”

“That said, we are happy to engage with other interested parties in the spirit of collaboration, should they approach us and have relevant information to share.”

Sinclair provided The Narwhal with a list of “companies we’re currently consulting.” They include the Canadian Association of Petroleum Producers (CAPP) and other industry associations, the so-called ‘Big Five’ oil giants and dozens of other companies. (The University of Alberta and the University of Calgary are both also included, as a result of their roles as producers of their own electricity).