The gassy elephant in our living room

Gordon Laxer

The Globe and Mail

May 6, 2006

 

Rona Ambrose, Canada’s Environment Minister, headed into this week’s meeting in Bonn as chair of the United Nations Convention on Climate Change with our international reputation in tatters. Having declared that Canada will not meet its international Kyoto commitments to reduce greenhouse-gas emissions, the Conservatives tout a relaxed “made in Canada” policy, instead. It’s more like a policy made in corporate boardrooms in Calgary and Houston to divert attention from the gassy elephant sitting in the living room - Alberta’s tar sands.

 

The tar sands are the single largest contributor to the growth of greenhouse-gas emissions in Canada, because it takes so much of Canada’s diminishing supply of natural gas to make tar sands oil. Greenhouse-gas intensity in the tar sands is almost triple that of conventional oil. As Jim Dinning, Alberta’s former treasurer and front-runner to replace Ralph Klein as Alberta’s premier, recently quipped, “Injecting natural gas into the oil sands to produce oil is like turning gold into lead.”

 

Alberta now emits more greenhouse gases than Ontario, despite having only 26 per cent of that province’s population. To draw attention away from the tar sands elephant, Ms. Ambrose said we would have to take every train, plane and automobile off the streets in Canada to comply with Canada’s Kyoto accord targets. Did she point her finger at transportation that everyone uses, to undermine popular support for Kyoto?

Environment Canada, a unit in Ms. Ambrose’s own ministry, tells a different story. It is oil production, not oil consumption, that is the fastest growing source of Canada’s emissions. “Growth in oil and gas exports, almost all to the United States, contributed significantly to emission growth between 1990 and 2003.”

 

And tar sands production is scheduled to at least triple to three million barrels a day in the next 10 years. Most of that increase is for export to the United States. So, the refusal by the new Conservative government to meet Kyoto targets is due in part to Canada’s role in feeding what President George Bush called America’s “addiction to oil.” To meet its Kyoto targets, why does Canada not just reduce oil and natural gas exports to the U.S.? Then, instead of building more tar sands plants at $10-billion a project, provincial and federal governments could adopt policies to reduce energy usage for a fraction of the cost.

Of course, reducing exports, though necessary to achieve greenhouse-gas reductions, runs smack into the increasingly dysfunctional North American free-trade agreement. NAFTA has a proportionality rule, which states that Canada must export at least the same proportion of energy to the U.S. as it has in the past three years, even if Canada faces shortages. Proportionality stands in the way of a tough Canadian environmental policy.

 

The proportionality clause must go. Mexico is in NAFTA but never agreed to give up control over its energy supply. Proportionality does not apply to Mexico. Canada needs to get a Mexican exemption on proportionality to help Canada meet its Kyoto commitments.

 

In the post-9/11 world, where “security trumps trade,” many countries, including the U.S., are pursuing national energy security strategies. Canada should adopt a “Canada first” energy security strategy, too. Such a strategy would greatly help Canada reduce greenhouse-gas emissions.

 

A Canadian strategy would also ensure that the “Eastern bastards” won’t freeze in the dark when the next international oil-supply crisis hits. Atlantic Canadians and Quebeckers now get 90 per cent of their oil from imports, much of them from unstable sources. With a Canada-first strategy, much of Western oil and gas exports would be redirected to Eastern Canada. Would such a policy be seen as anti-Alberta? In elite circles, yes, but not among most Albertans, as long as a security strategy recognized provincial rights to energy revenues and the need for a federal-provincial partnership.

 

A recent poll showed that more than 60 per cent of Albertans feel our leaders should do more to control foreign access to Canadian energy resources. Albertans still remember the national energy program and associate it with prolonged recession in the 1980s when the rest of Canada was booming. But a Canadian energy security strategy would be very different. In contrast to the NEP, it is an initiative from Albertans and would enhance, rather than take away, the power and revenues of the producing provinces.

 

In its dying days, the Klein government would brand any Canadian energy security strategy as anti-Alberta. But this view isn’t shared by all Albertans, most of whom are concerned by the overly frenetic pace of the current boom.

 

Easing the breakneck pace of tar sands development would relieve escalating wage and supply costs, labour shortages, and strains on municipal budgets in Alberta. It would also stretch out employment for oil, construction and service workers, who feel the boom but would like to see it last so they can put down roots in the communities where they work. Given the choice, most workers would rather have 15 years of steady, 40-hour-a-week employment than five years of non-stop work, followed by a bust.

 

Ms. Ambrose calls breaking Canada’s commitments to Kyoto a “made in Canada” policy. It is no such thing. Canada should show international leadership by meeting its Kyoto targets. But we cannot do so unless we adopt a “made in Canada” energy security strategy.