Energy and Ecological Security for Canadians

Submission to Let’s talk climate action

Gordon Laxer

(Author of After the Sands. Energy and Ecological Security for Canadians. Douglas & McIntyre 2015 and founding Director of Parkland Institute at the University of Alberta)

 

 

  • The Paris climate accords were strong on aspirations - keep the world below a 2 degree or even a 1.5 degree Celsius global temperature rise - but very weak on delivery. To meet its commitments, each country must find its own unique road map. Canada doesn’t yet have one. I outline a bold one in my book . Energy and Ecological Security for Canadians. (Douglas & McIntyre. 2015)

 

  • Canada’s environmental policy has not been credible. We will have to make major changes to Canada’s economic direction to make it credible. Incremental changes will not get us there. Canada ratified the international Kyoto Accord in 2002, pledging to cut Canada’s greenhouse gases by 6% by 2012. Instead they’re up 18%. Do Canadians have the right to spew two per cent of the world’s carbon emissions when they comprise 0.5% of the world’s people?

 

  • Despite prime minister Justin Trudeau’s Paris statement that Canada is “back”, Ottawa has so far stuck to Stephen Harper’s pathetic climate targets that were submitted before the federal election in October 2015.

 

  • The EU and US each plan to reduce emissions by 2.8% a year between 2020 and 2030. If Canada sticks with Harper’s foot dragging plan, we will reduce emissions by only 1.7 percent a year. However, unless Canada changes course and deals with the largest sources of emissions – those coming from the production and export of oil and natural gas - it is very doubtful Canada will reach even Harper’s feeble goal.

 

  • Canada is oil insecure. Atlantic Canadians and Quebecers depend heavily on imported oil. Yet NAFTA’s energy proportionality rule obligates Canada to look after US energy security instead of Canadians’ energy security. The Americans no longer need Canadian oil to gain their energy security, but eastern Canadians do. We’ve got to replace all oil imports with conventional, non-fracked, Canadian oil. And build and fill strategic petroleum reserves to guarantee Canadians with oil during international supply crises that can be caused by wars in the Middle East and natural disasters. Twenty-six of the other 28 members of the International Energy Agency (IEA) have strategic petroleum reserves. Only Canada and Australia do not.

 

  • To ensure their people have sufficient supplies, most countries frame their energy policies in terms of energy security. Canada does not but it should. In the carbon constrained future, renewable energy will supply less total energy than carbon fuels do today. When there will be less energy for everyone to share, it is imperative that Canada’s environmental and energy policies guarantee that all citizens and residents have access to a sufficient amount of energy. Energy security for all Canadians should be recognized as a human right.

 

  • The road to energy security and effective climate action are inseparable in this country. Canada can’t control its emissions level if it allows the unlimited growth and export of carbon fuels. Oil and natural gas production are Canada’s greatest and fastest growing source of greenhouse gases (GHGs). To curb these, Canada must phase out Alberta’s Sands for fuel production and phase out all carbon fuel exports over the next 15 years.

 

  • Canada has just enough conventional, non-fracked oil and natural gas liquids to meet Canadians’ current use, but not enough to continue exporting.

 

  • As domestic conventional oil output declines, a strong conservation plan is needed to reduce Canadians wasteful carbon energy use at least as quickly. There is no good reason Canadians use much more carbon fuels per person than do cold, sparsely populated countries such as Sweden and Norway. Conservation rests on a basic principle. It’s better to save a unit of carbon energy than to dig one up, and burn and emit it.

 

  • Emissions from Alberta’s Sands are as intense as they were in 2005. They are not improving. Environment Canada assumes their emissions intensity will stay flat until 2030. Technical improvements are being entirely negated by the shift from surface mining to more energy intensive extraction (eg. SAGD or Steam Assisted Gravity Drainage) from deeper sources of bitumen and by declining reservoir quality.

 

  • Even before the beast of a fire in May 2016, the area around Fort McMurray had been an environmental sacrifice zone, full of tar pits that leak into rivers, raised cancer deaths among local people including indigenous people.

 

  • The Sands occupy a quarter of Alberta, an area bigger than the three Maritime provinces.

 

  • Alberta’s climate leadership plan is deficient. It will prevent Canada from reaching its Paris climate promises. Alberta’s plan targets the 28 per cent of Alberta's greenhouse gases that come from electrical power generation and transportation and leaves the 46 per cent of its emissions from the production of oil and gas almost scot-free. Under Alberta's plan, the Sands and other oil and gas emissions can grow by 43 per cent by 2030.

 

  • If allowed to stand they will entirely cancel out Alberta’s emission reductions in electrical power, vehicles & methane over the next 10 to 15 years. In effect, ordinary Albertans will reduce their carbon pollution so "big oil" can expand Sands emissions and profits.

 

  • Alberta’s emissions cap is not much of a cap. It should be renamed “Alberta’s carbon polluting licence”. It kills Jack Layton's dream

 

  • In 2008 and 2010, the House of Commons passed Layton's Climate Change Accountability Act to cut carbon emissions by 80 per cent from Canada's 1990 level of 613 million tonnes (MT) by 2050. Unelected Conservative senators defeated the bill. Yet Layton’s bill had great influence. The next year all G8 members (including Canada) promised to cut GHG emissions by 80% below 1990 levels by 2050. Ontario’s climate plan for instance, uses the Layton target of 80% GHG reduction by 2050 from 1990 level. Thank you Jack Layton for your farsightedness.

 

  • Cutting Canada's 1990 emissions by 80 per cent by 2050 would leave 123 mega tonnes (Mt)only 23 Mt above Alberta's Sands cap of 100 Mt. If emissions from Alberta’s Sands are allowed to rise and stay that high, they will take up 81 per cent of Canada's emissions in 2050. Canadians would have to shut down just about all other oil uses like driving to work, just so Big Oil could grow Alberta's Sands output, emissions and profits.1

 

  • If Canada reaches its target of 524 Mt by 2030 and Alberta Sands emissions rise to 100 mega tonnes a year by then, the oil and gas sector will have accounted for 44% of Canadian emissions. The rest of the economy would have to cut emissions by almost half - 47% in 13.5 years.

 

  • The incredible impact of emissions from the Sands and other carbon fuels produced in Alberta can be seen another way. With 4.2 million people, Alberta produces almost 10 percent more greenhouse gases (274 Mt to 253 Mt) than do both Ontario and Quebec with a combined population of 22 million. That’s more than five times as much per capita. It’s not mainly caused by Albertans driving more vehicles. The latter account for only 11 percent of Alberta’s GHGs.

 

  • BC and Alberta have carbon taxes. Quebec has a cap and trade system and Ontario is setting one up. Both systems are good initiatives but neither plan is anywhere nearly sufficient to bring about the scale of emissions cuts needed.

 

  • The richest ten percent of the world’s people cause fifty percent of global emissions. A carbon tax high enough to curb their carbon pollution would be so high that low and middle income people could be stranded in unheated homes. With our cold winters, lower income Canadians could freeze in the dark.

 

  • The one percent and the ten percent have no more right to emit into the earth’s common, fragile biosphere than anyone else. Everyone, regardless of income, must be guaranteed the same right to clean air and drinking water and a resilient natural environment.

 

  • In the carbon constrained future, there will be less energy period. If we let energy prices determine who has access to lower supplies, the rich and the military will hog most of it.

 

  • My book outlines a much fairer and more effective way to reduce the emissions of the well to do and the rich than through carbon taxes or cap and trade. That way is through “personal tradable energy” permits or quotas (TEQs) (http://www.teqs.net/). The plan was developed in Britain where its Parliament passed them into legislation in 2008. But they have not been implemented yet. Canadians and their governments should give them serious scrutiny because they have been given a great deal of parliamentary, research and media scrutiny. They stood up well.

 

  • In the TEQs plan, individuals are given free weekly carbon permits but corporations and governments must buy theirs. An individual’s carbon use is calculated every time she or he buys carbon energy in one transaction using their credit or debit cards. There would be no charge for renewable energy purchases, so the plan would tilt the playing field toward them and towards conservation. I won’t outline how they will work here. Suffice it to say that they give great incentives to conserve and switch to renewables in flexible ways that suit individuals and communities unique needs and preferences.

 

  • Quebecers and Atlantic Canadians are energy insecure because they import the majority of the oil they use. Oil is imported from offshore and increasingly from the US. [The train that tragically blew up at Lac Mégantic Quebec carried fracked, shale oil from North Dakota.]

 

  • If anyone thinks U.S. oil provides Canadians with greater security than Middle East oil, think again. Matt Simmons, a former energy advisor to George W. Bush warned Canadians that the U.S. would shut Canada off from US oil exports in an international oil supply emergency. If Donald Trump becomes president of the United States, would Washington continue to export crude and refined oil to Canada during an international oil shortage?

 

  • Reducing oil use by promoting electric and hybrid cars, and building much more high speed transit and inter-city trains will move Canada toward energy and ecological security and independence.

 

  • Proposals for new pipelines ignite controversy and opposition in Canada because if built they would lock Canada into continuing to expand Sands oil production and emissions and cause environmental devastation in many places.

 

  • More pipelines will lead to more environmental devastation - oil tankers running aground in the turbulent waters off BC, pipelines bringing bitumen across hundreds of rivers to the West and east coasts. Unlike conventional oil, bitumen sinks and can’t easily be cleaned up. The people living beside the Kalamazoo River in Michigan learned this in 2010.

 

  • The proposed Energy east line is mainly a Sands oil export line. Mark Sherman, plant manager at the Irving oil refinery in St. John New Brunswick, said that the Energy East line would send “way more than we would ever use at this refinery, so the bulk of it would all be exported.”

 

  • The Energy East pipeline is not needed. Current pipelines from Canada to the US Gulf coast now have sufficient spare capacity because the international oil price crash mothballed much of Alberta’s future oil output.

 

  • Almost half the oil projects cancelled in the world in 2015 were in Alberta’s Sands. Peter Tertzakian, a prominent Calgary energy economist, predicts that none of the 17 major Sands projects withdrawn between November 2014 and April 2016 will likely revive even if oil prices rebound.

 

  • The Energy East pipeline to New Brunswick isn’t needed. Why run a pipeline 4,600 kilometres from Alberta when Newfoundland has enough non-fracked conventional oil to supply all east coasters? Most Atlantic Canadians live on or near a coast. Why pipe it to them when it can be shipped by tanker from Newfoundland’s oil fields?

 

  • Oil tankers could be phased out as Atlantic Canadians’ oil use falls in a Canada-wide energy conservation plan, whereas a new pipeline to New Brunswick would need at least three decades of shipping mainly Sands oil at full volume to amortize building costs.

 

  • The era of oil’s dominance is nearing its end. Until 2015, OPEC and Big Oil assumed that oil left in the soil would grow in value. They’re beginning to realize that it may be less valuable in future. That’s why Saudi Arabia announced Vision 2030 to wean the Kingdom off dependence on oil and why it’s selling so much oil today even though that holds down the international oil price.

 

 

  • A combination of factors will shrink future demand for oil government-mandated, rising vehicle efficiency, the reduction or ending of gasoline subsidies in OPEC countries, growing gasoline carbon taxes, and cheaper batteries starting a shift to electric vehicles. Instead of peak oil, experts now point to peak oil demand.

 

  • Leading oil expert Amy Myers Jaffe predicts that world oil use could fall by as much as 20 percent by 2040.

 

  • If that happens, oil prices will fall, dooming new Alberta Sands projects that need oil prices above $68 to $100 a barrel to be profitable. Prices have been much below that level for almost two years.

 

  • If Alberta’s Sands expansion is halted, there will be no need for more oil takeaway capacity. Building the Energy East pipeline, would not help Alberta’s economy.

 

  • Alberta’s government and Big Oil are on the wrong side of history. They are betting that the age of carbon fuels will continue for decades. That’s unlikely. Alberta must now join the international transition to a low carbon future, or be left behind in a fossil fuel backwater of abandoned oil wells and tar ponds that resemble the U.S. “rust belt” and coal states

 

Canada should adopt the following principles and take the following steps:

  • A unit of carbon of energy saved creates more jobs than a unit of carbon energy dug up, burned and emitted.

 

  • To move to a low carbon future, Canada and the provinces and territories must bring in a “Just Transition” program for energy and construction workers in Alberta’s Sands and other carbon energy projects, to help them move to other useful work, especially in renewable energy and conservation.

 

  • Replace all oil imports with domestic conventional (non-fracked) oil to give oil security to Eastern Canadians (Atlantic Canada, Quebec, Ontario). Domestic conventional oil should power our transition to a low carbon future.

 

  • Phase out carbon energy exports - oil, coal and natural gas.

 

  • End NAFTA’s energy proportionality rule that forces Canada to make available the majority of its carbon fuel production for export to the US. Mexico demanded and got an exemption from the proportionality rule. Canada should demand a similar “Mexican exemption”.

 

  • Following the far-sighted example of Alberta phasing out coal-fired electricity generation by 2030, Alberta should phase out Sands for fuel production in the same period.

 

  • Canada should phase out electricity exportsInstead of exports, the hydro rich provinces - BC, Manitoba, Quebec and Newfoundland and Labrador - should send hydro power to the six hydro-poor provinces. That would help them end coal and natural gas-fired, electric power plants in Alberta, Saskatchewan, Nova Scotia, and New Brunswick more quickly. Manitoba Hydro could sell surplus hydro-power to Saskatchewan, as long as Saskatchewan agrees to use it to close out coal fired electricity more quickly than now planned. Quebec could help supply Ontario to assist the phasing out of its nuclear and natural gas generation of power. BC’s hydro-power could help phase out power generation from natural gas in Alberta, as well as from coal. Finally, as along as Newfoundland and Labrador does not export its prodigious hydro power to the U.S., it has enough to end coal-fired electricity in Nova Scotia and New Brunswick and phase out nuclear in the latter province.

 

  • Inter-provincial transmissions would greatly lower Canada’s carbon emissions, and prepare Canada for rapidly rising electricity demand to power up electric vehicles, rapid, electrified, inter-city rail, subways and LRTs.

 

  • Partner with indigenous nations as sovereign peoples. Respect their stewardship over their traditional lands and adopt the indigenous world-view as the Canadian world view. Indigenous nations have led virtually all of the environmental victories in Canada.