Imperial Oil expects 'double-digit' returns from renewable diesel facility
Imperial Oil Ltd. expects “double-digit returns” from its $720-million investment to build what will be Canada's largest renewable diesel manufacturing facility at its Strathcona refinery, the oil giant said Tuesday.
The Calgary-based company announced last week its plans to go ahead with the project on the outskirts of Edmonton that was first announced in August 2021, is expected to produce 20,000 barrels per day of renewable diesel once complete in 2025.
The project, which will use locally sourced vegetable oils and low-carbon hydrogen to produce a biomass-based fuel, will help to set Imperial up for the energy transition by diversifying its petroleum-based portfolio, according to the company.
But executives told analysts on the company's fourth-quarter earnings call Tuesday that the project will also be a money-maker in its own right.
“There's nothing about the fact that it's a renewable diesel project, or driven by regulatory compliance, that in any way suggests that its rate of return is below our portfolio,” said Jon Wetmore, Imperial's vice-president for downstream.
“It's very, very competitive and at the top of our portfolio.”
Imperial had indicated in March 2022 that it expected its proposed renewable diesel facility to cost approximately $500 million. Costs have risen since then, in part due to inflationary pressures on labour and materials, but also because Imperial added rail logistics to the project's scope.
Imperial's chairman Brad Corson said while that did increase the project's total cost, it will also enable Imperial to reach more markets.
“I can assure you, it's a very robust return,” he said.
“It's a double-digit return and it competes very well with other projects in our portfolio that are competing for capital and hence, the reason we took it to (a final investment decision).”
The comments come as Imperial celebrated a fourth-quarter profit that more than doubled compared with a year earlier, helped by a strong operating performance across all of its business.
The company said it earned $1.73 billion or $2.86 per diluted share for the quarter, up from $813 million or $1.18 per diluted share a year earlier.
Total revenue and other income for the three-month period amounted to $14.45 billion, up from $12.31 billion in the fourth quarter of 2021.
Thanks to strong commodity prices in 2022, Imperial reported full-year earnings of $7.34 billion, the highest in the company's history. It also delivered record shareholder returns, driven by a 63 per cent increase to its dividend and more than $6 billion in share buybacks.
“We are closing the books on what was the best year in the company's history, a stark contrast to the challenges we faced just two years ago at the depths of COVID,” Corson said.
Imperial's upstream production in the fourth quarter averaged 441,000 gross oil-equivalent barrels per day, compared with 445,000 in the same period of 2021. Refinery throughput averaged 433,000 barrels per day for the quarter, up from 416,000 barrels per day a year earlier.
Imperial also announced Tuesday a companywide goal to achieve net-zero greenhouse emissions by 2050 across all of its operated assets, not just oilsands.
The company said it aims to achieve this through “collaboration with government and other industry partners, successful technology development and deployment and supportive fiscal and regulatory frameworks.”
As part of the Pathways Alliance, a consortium of Canada's largest oilsands companies, Imperial had already ledged to reduce its greenhouse gas emissions from oilsands production to net-zero by 2050.
The Pathways group has proposed building a massive carbon capture and storage network in northern Alberta, that could see member companies invest $16.5 billion before 2030.
Corson said Pathways can't make a final investment decision on that project until the federal government commits to a level of financial support that would put Canadian carbon capture projects on equal footing with those in the U.S., where they benefit from government incentives in that country's Inflation Reduction Act.
While the federal government has already announced an investment tax credit for carbon capture projects, the industry also wants to see ongoing financial support on the operating side.
However, Corson said both the federal government and the Alberta provincial government understand the issues, and are committed to seeing the proposed project go ahead.
“So I'm optimistic that if it's not in the budget speech, it will be soon thereafter that we will get not just clarity, but resolution - so we can move forward on these projects,” Corson said.
Alberta's oil and gas sector is the country's largest polluter, and while oilsands companies have managed to reduce their emissions per barrel, total emissions from the oilsands have more than doubled since 2005 due to increased production.
This report by The Canadian Press was first published Jan. 31, 2023.
Calgary Top Stories
CTVNews.ca Top Stories
Canada makes amendments to foreign homebuyers ban – here's what they look like
Months after Canada's ban on foreign homebuyers took effect on Jan. 1, the Canada Mortgage and Housing Corporation has made several amendments to the legislation allowing non-Canadians to purchase residential properties in certain circumstances.
'Leave this with me': Alberta premier heard on call with COVID-19 protester
Alberta Premier Danielle Smith, in a leaked cellphone call, commiserated with a COVID-19 protester about his trial while divulging to him there was an internal dispute over how Crown prosecutors were handling COVID-19 cases.
What is the grocery rebate in federal budget 2023? Key questions, answered
To help offset rising living expenses, the Government of Canada has introduced a one-time grocery rebate for low- and modest-income Canadians. Here is what we know about the rebate.
RCMP arrest 5 while executing search warrant at Wet'suwet'en protest camp
RCMP officers executed a search warrant at a protest camp on Wet'suwet'en traditional territory near the under-construction Coastal GasLink pipeline Wednesday.
'Compostable' food packaging may contain hazardous 'forever chemicals': Canadian study
As Canada phases out single-use plastics, more restaurants are opting to use 'compostable' takeout containers. But a new study suggests some of these supposedly eco-friendly containers may pose hazards to our health and the environment.
Could Usain Bolt outrun a 900-pound dinosaur? Physics professor poses the question
A new academic paper pits legendary sprinter Usain Bolt against a 900-pound dinosaur to see who could run a 100-metre distance the fastest.
Recalled in Canada: Change tables over entrapment hazard, hoodies due to risk of choking
Health Canada has issued two recalls, one for change tables over an entrapment hazard and another for bamboo nursing hoodies due to a risk of choking.
Many Canadians like to tell 'white lies' about home-cooked meals: survey
Have you ever had to lie about the quality of a home-cooked meal to protect someone's feelings? According to a new survey by Research Co. you’re not the only one.
Spending to increase economic capacity is fiscally responsible, Freeland says in post-budget defence
Defending her latest federal budget, Deputy Prime Minister and Finance Minister Chrystia Freeland said spending that increases economic capacity is fiscally responsible.
Online video between Danielle Smith and Artur Pawlowski raises questions over interference
In an online video, Alberta Premier Danielle Smith is heard speaking with outspoken Calgary pastor Artur Pawlowski, creating questions about her influence on Alberta court cases.
Man found dead in SUV, Edmonton homicide detectives on the case
Police are looking for help in the suspicious death of a man found in a vehicle in north Edmonton Wednesday morning.
'Serious labour shortage' holding Alberta's tourism sector back: industry advocates
Alberta's tourism sector has a "serious labour shortage" that can threaten its long-term viability, a new labour study has found.
City of Vancouver considering requiring grant recipients to be 'respectful' in order to get funding
Vancouver city council has asked staff to shape a policy that would require grant recipients to engage with officials in a "respectful manner," a move that one political scientist says suggests an attempt to prevent or punish criticism.
'A freeze response of shock': Expert weighs in on bystanders not stepping in during fatal Vancouver stabbing
After a man was fatally stabbed outside of a Vancouver Starbucks in front of dozens of witnesses, video of the attack is circulating on social media, raising questions about why nobody stepped in to help.
Broadway Plan moves full speed ahead, council votes against pace-of-change policy
Vancouver city council has voted overwhelmingly against a new policy that was meant to slow down the rate of redevelopment for the Broadway Plan.
N.S. mass shooting inquiry report must deliver 'clear commentary': family lawyer
A lawyer who represents Nova Scotia mass shooting victims' families said in an interview they are hoping "for clear commentary on what things went wrong and what things ought to have been done better or differently."
Cold front to sweep mix of snow, rain across the Maritimes Thursday
A low-pressure system moving north of the St. Lawrence River valley will sweep a cold front across the Maritimes on Thursday.
How Portapique residents past and present are dealing with reminders of the 2020 mass shooting
The eve of the release of the final report from the inquiry into Nova Scotia’s 2020 mass shooting is a reminder for residents of Portapique of their small community’s traumatic past.
IIO investigating after man driving construction vehicle shot, seriously injured by police in Duncan, B.C.
A man was taken to hospital with serious injuries following a police shooting in Duncan, B.C., on Tuesday evening.
Police investigating 'targeted' attempted arson at home in Saanich
Police are investigating what they believe was a targeted arson attack at a home north of Victoria.
B.C. parents win battle to put son's Indigenous name on his birth certificate
After 13 months of fighting, the parents of a Campbell River, B.C., boy have received a birth certificate that accurately reflects the spelling of his name.
BREAKING | Man pulled from house fire in Toronto's Junction Triangle dies in hospital
A man is dead after being pulled from a fire at a home in Toronto’s Junction Triangle neighbourhood.
A rare weather phenomenon strikes southern Ontario again
Thundersnow has struck southern Ontario for a second time this month.
Why is there no cell service on the TTC? Riders say it could increase safety
The Toronto Transit Commission signed a deal in 2012 to provide cellular service on the subway network, but over a decade later, few are able to make a call in an emergency—something the TTC board members, riders and parents say has to change in the wake of the death of Gabriel Magalhaes.
Bill 15: Quebec tables legislation to overhaul health system
The CAQ government has unveiled its long-promised plan to improve Quebec's public health network. Tabled at the Quebec legislature Wednesday by Health Minister Christian Dubé, Bill 15 promises a major shakeup.
'I lost a brother': Funeral held for teen who died in Old Montreal fire
Almost two weeks after his death, a funeral was held in Laval Wednesday for a teenager who died in the fire in Old Montreal.
Flooded and fed up: St-Leonard homeowners file class-action suit over heavy rain damages
A group of homeowners in St-Leonard has filed a class-action lawsuit against their borough and the City of Montreal, claiming municipal authorities are to blame for repeated floodings during heavy rain.
LRT | Stage 2 of Ottawa LRT faces further delay
The long-awaited southern extension to Ottawa's light rail network is facing a further delay, a city committee heard Wednesday.
Truck held together with bungee cord pulled off the road in eastern Ontario
Quinte OPP says officers stopped the vehicle on Trenton-Frankford Road on Wednesday with a bungee rope stretching across the back of the truck.
Migrants' influx helps Cornwall, Ont. labour shortage
Hundreds of migrants, who have crossed the Canadian border at Roxham Road in Quebec and have settled in Cornwall, were on the hunt for jobs on Wednesday.
'Fairly emotional for everybody': Teen struck by LRT visits emergency crews who rescued him
Several weeks after a teen was stuck under an LRT train in Kitchener, he’s now up and walking and visited the emergency crews who helped rescue him.
Cambridge municipal election candidate suing city after names left off ballot
A retired political science professor says he was “stunned” by the way the Cambridge municipal election unfolded.
Businesses weigh in on government’s plan to reduce credit card fees
The federal government is touting plans to help small businesses by reducing credit card fees, but some local merchants say while they welcome the measure, the actual impact it will have on their operations will be minimal.
Saskatoon police release video of 3 people placing 'large container' in dumpster where body was found
Saskatoon Police Service is asking for the public’s help in identifying three individuals they believe are connected to a suspicious death.
Saskatoon murder trial on hold as police investigate new revelations
A Saskatoon murder trial is being adjourned to allow police to follow-up on "significant information" that just came to the Crown prosecutor's attention Wednesday.
Dog that attacked five-year-old Saskatoon boy involved in three other attacks
CTV News has learned a dog that attacked a five-year-old boy last week had been declared dangerous in February 2022, but the city had lost track of the owner a year ago.
Northern Ont. family ‘ecstatic’ as 25-year-old murder mystery finally solved
Robert Steven Wright was convicted Wednesday of murdering Renee Sweeney, a little more than 25 years after her brutal killing shocked the community.
B.C. man pleads guilty to northern Ont. shooting, Crown drops attempted murder charge
A man who admitted to shooting up a home in Greater Sudbury in 2020 over a drug theft pled guilty Wednesday to reduced charges.
Driver caught travelling 200km/hr on major Ontario highway
A 20-year-old has been charged with careless driving after travelling double the speed limit on a major Ontario highway.
Manitobans should prepare for a gas price hike according to an expert
Come the weekend, Manitobans will be paying more for gas and the price could climb even higher in the coming weeks and months according to a gas expert.
Brandon pauses public engagement on 30-year vision over 'inappropriate and unsafe behaviour'
The City of Brandon has paused its public consultation on its 30-year plan for the city due to 'inappropriate and unsafe behaviour' from some residents.
Manitoba family launches lawsuit over COVID-19 vaccination
A Manitoba family has launched a lawsuit alleging their 23-year-old son had a stroke days after receiving a dose of a COVID-19 vaccine, leaving him legally blind.
City council waiting for next steps in Experience Regina rebrand
The City of Regina is waiting for an update regarding the next steps for the Experience Regina rebrand.
Regina's Dewdney Avenue strip to undergo 2 year renovation project
The Dewdney Avenue strip between Broad Street and Albert Street is about to undergo a major two year renovation project.
Saskatchewan to spend $6 million for some hip and knee surgeries in Calgary
The Saskatchewan government is set to spend up to $6 million to send patients to Calgary for hip and knee surgeries.