Ontario Teachers’ pension fund invests in Abu Dhabi oil pipelines

The Ontario Teachers’ Pension Plan (OTPP), has outdone the May decision of AimCo in Alberta to invest in the Coastal GasLink pipeline,  with its announcement on June 23d that it is part of a consortium which has invested $10.1 billion  in a  gas pipeline network under development by the state-owned Abu Dhabi National Oil Company.  Details appear in the Globe and Mail    and Energy Mix on June 23.  The consortium partners are Toronto-based Brookfield Asset Management, New York-based Global Infrastructure Partners (GIP), and investors from Singapore, South Korea, and Italy.  The Ontario Teachers Pension Plan  is quoted by the Globe and Mail, stating: “This strategic transaction is attractive to Ontario Teachers’ as it provides us with a stake in a high-quality infrastructure asset with stable long-term cash flows, which will help us deliver on our pension promise.”

Advocacy group Shift Action for Pension Wealth and Planet Health responded with a scathing statement , which says:

“Investments like the OTPP’s in fossil fuel infrastructure are betting the hard-earned retirement savings of thousands of Ontario teachers against the long-term safety of our climate… Ensuring the growth of pensions in the long-term requires ending investments that lock-in fossil fuels and redeploying massive pools of finance into climate solutions like renewable energy and clean technology.”

Shift also links to a 25-page Toolkit for OTPP members on the risks of fossil fuel investment of their pension funds. (May 2020).   The OTPP Statement on Responsible Investing for 2019 is here.

Alberta Pension fund invests in Coastal GasLink pipeline, the latest risky fossil fuel investment

Carbon Tracker, the group which originated the term “stranded assets, published two new reports about the financial risks of fossil fuel investment in June:  It’s Closing Time: The Huge Bill to Abandon Oilfields Comes Early  and Decline and Fall: The Size & Vulnerability of the Fossil Fuel System on June 4 .  Banking giant Goldman Sachs also released a new report, Carbonomics: The Future of Energy in the age of climate change , which sees a fundamental shift from fossils to renewable energy investments.

Yet even as the drumbeat of fossil fuel decline continues, the public sector pension funds of Alberta and South Korea purchased a majority ownership stake in the Coastal GasLink pipeline from TC Energy on May 25,  using  the  retirement savings of millions of individuals.  “Alberta and South Korea’s pensions just bought the Coastal GasLink pipeline: 8 things you need to know” in The Narwhal (June 10) analyses the situation and cites a report from Progress Alberta :  Alberta’s Failed Oil and Gas Bailout , with this subtitle provided: “How AIMCO invested more than a billion dollars of pensioners and Albertans money into risky oil and gas companies with more than $3 billion in environmental liabilities and how the people running those companies got rich through huge salaries, share buybacks, dividends and conservative political connections.” Besides exposing the political shadows and environmental liabilities of many AimCo energy investments, the report makes recommendations, including for a public review of the investment performance and governance of Aimco; to divest from risky fossil fuel investments; to allow pension plans whose funds are being managed by AIMCo to appoint representatives to its board ; and to allow pension funds the freedom to leave AIMCo.

The recommended reforms are necessary because of the changes made by the Kenney government in November 2019,  described by WCR here and by Alberta unions in:  Union leaders tell UCP: ‘The money saved by Albertans for retirement belongs to them, not to you!’    Alberta’s Failed Oil and Gas Bailout   report urges: “The mismanagement of pensions and the Heritage Fund today offers opportunities for unions, political parties, civil society groups and organizers to engage and activate people who otherwise might never get involved in political collective action. People’s retirements and Alberta’s savings fund from its fossil fuel wealth are at stake.”

International Energy Agency roadmap for a sustainable recovery forecasts job growth led by retrofitting and electricity

The International Energy Agency, in cooperation with the International Monetary Fund, released a roadmap which would require global investment by governments of USD 1 trillion annually between 2021 and 2023 to create jobs and accelerate the deployment of clean energy technologies and infrastructure.  The World Energy Outlook Special Report: Sustainable Recovery , released on June 18th states:  “Through detailed assessments of more than 30 specific energy policy measures to be carried out over the next three years, this report considers the circumstances of individual countries as well as existing pipelines of energy projects and current market conditions.” The report data and analysis will form the basis for the IEA Clean Energy Transitions Summit on July 9 2020, where decision-makers in government, industry and the investment community will meet to discuss policy options for economic recovery post Covid-19.

From the report: ” Our new IEA energy employment database shows that in 2019, the energy industry – including electricity, oil, gas, coal and biofuels – directly employed around 40 million people globally. Our analysis estimates that 3 million of those jobs have been lost or are at risk due to the impacts of the Covid-19 crisis, with another 3 million jobs lost or under threat in related areas such as vehicles, buildings and industry. “ The recommendations promise to save or create approximately 9 million jobs per year, with the greatest number in building retrofitting for energy efficiency, and in the electricity sector.  The Sustainable Recovery Plan also seeks to avoid the kind of rebound effect which occurred after the 2008/2009 recession, claiming that it would stimulate economic growth while achieving annual energy-related greenhouse gas emissions which “would be 4.5 billion tonnes lower in 2023 than they would be otherwise”,  decreasing air pollution emissions by 5%, and thus reducing global health risks.

Under the heading of “Opportunities in technology innovation”, the report examines four specific technologies: “hydrogen technologies, which have a potentially important role in a wide range of sectors; batteries, which are very important for electrification of road transport and the integration of renewables in power markets; small modular nuclear reactors, which have technology attributes that make them scalable as an important low-carbon option in the power sector; and carbon capture, utilisation and storage (CCUS), which could play a critical role in the energy sector reaching net-zero emissions. We also compare the near-term job creation potential of some of these measures.” The IEA is preparing an Energy Technology Perspectives Special Report on Clean Energy Technology Innovation, which will be released in early July 2020.

Pembina proposes a low-carbon blueprint to create 67,2000 jobs in Alberta

alberta emerging economyA report released on June 15 calculates  that, with supportive government policies, 67,200  jobs could be created in Alberta by 2030 in four key areas: renewable electricity; transit and electric vehicle infrastructure; energy efficiency in buildings and industry; and environmental cleanup and methane reduction in the oil and gas industry.  Alberta’s Emerging Economy: A blueprint for job creation through 2030  was funded by the Alberta Federation of Labour  and written by researchers at the Pembina Institute.  It provides detailed data for each of the four sectors, along with well-informed policy discussion. Notably, the number of jobs forecast represents a significant diversification of the labour market for the province: 67,200 jobs is equal to 67% of the total workforce of the mining, and oil and gas extraction industry in 2019.

Alberta’s Hydrogen initiative

Alberta’s Emerging Economy does not consider the potential jobs from new technologies such as carbon capture and storage, or hydrogen production.  Fundamental to understanding that technology is the difference between “grey hydrogen”,  “blue” hydrogen and “green” hydrogen”- explained by an expert at the International Energy Agency here , or in Green Tech Media in “The Reality Behind Green Hydrogen’s Soaring Hype”.

On May 14, the Alberta Industrial Heartland Hydrogen Task Force was launched as “an independent working group created to develop a framework to implement a hydrogen economy in the region” and “produce a public report detailing the approach and steps needed to advance a zero-emission fuel economy in Alberta’s Industrial Heartland.” The Task Force includes local mayors from Alberta and Saskatchewan (including  Edmonton Mayor Don Iveson). The full list of Task Force members and advisors is here , and is organized by Transition Accelerator – itself launched in 2019, by the University of Calgary research group CESAR.  A recent report in their  “The Future of Freight” series, Implications for Alberta of Alternatives for Diesel  advocates for “blue hydrogen” production (hydrogen made from natural gas by steam-methane reforming (SMR) coupled to carbon capture and storage (CCS)).

Hydrogen production is described in the Globe and Mail on June 14, “Ottawa, Alberta develop new hydrogen strategies” .  An overview in Corporate Knights magazine on May 14  claims “Hydrogen can make Canada an energy superpower again”.  It concludes:

We live in Alberta, so know the danger in including the words ‘national’ and ‘energy’ in the same sentence. But picture a Canada where hydrogen is the focus of a pan-Canadian strategy that would have all provinces working together for a net-zero emission energy future that revitalizes our economy and again positions Canada as an energy superpower.

 

Global reports call for renewables to lead a green recovery from Covid-19

Renewable Power Generation Costs in 2019 was released on June 2 by the International Renewable Energy Agency (IRENA), showing that “more than half of the renewable capacity added in 2019 achieved lower power costs than the cheapest new coal plants.” The analysis spans around 17,000 renewable power generation projects from around the world, and includes discussion of job impacts in the industry. A statistical dashboard is searchable by country  , including Canada, and by jobs statistics.

The report emphasizes the importance of renewables in a global economic recovery strategy, stating:

“Renewables offer a way to align short-term policy action with medium- and long-term energy and climate goals.  Renewables must be the backbone of national efforts to restart economies in the wake of the COVID-19 outbreak. With the right policies in place, falling renewable power costs, can shift markets and contribute greatly towards a green recovery.”

On June 10, the Global Trends in Renewable Energy Investment report was released by the U.N. Environment Programme, with a press release  with a similar message:  “As COVID-19 hits the fossil fuel industry, the GTR 2020 shows that renewable energy is more cost-effective than ever – providing an opportunity to prioritize clean energy in economic recovery packages and bring the world closer to meeting the Paris Agreement goals. ….. In 2019, the amount of new renewable power capacity added (excluding large hydro) was the highest ever, at 184 gigawatts, 20GW more than in 2018.” The 80-page Global Trends in Renewable Energy Investment  is an annual report commissioned by the UN Environment Programme in cooperation with Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance, produced in collaboration with Bloomberg NEF, and supported by the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety.

The argument for the cost advantage of clean energy is demonstrated with detailed modelling for the United States by researchers at the University of California Berkeley Goldman School of  Public Policy. Their new report,  2035: The Report: Plummeting solar, wind and battery costs can accelerate our clean electricity future  “uses the latest renewable energy and battery cost data to demonstrate the technical and economic feasibility of achieving 90% clean (carbon-free) electricity in the United States by 2035. “The 90% Clean case avoids over $1.2 trillion in health and environmental costs, including 85,000 avoided premature deaths, through 2050”… and “ supports a total of 29 million job-years cumulatively during 2020–2035. ….These jobs include direct, indirect, and induced jobs related to construction, manufacturing, operations and maintenance, and the supply chain. Overall, the 90% Clean case supports over 500,000 more jobs each year compared to the No New Policy case.”

renewables 2020Another report,  Renewables 2020 Global Status Report   was released by REN21 on June 16, with a  36-page summary of Key Findings . The report provides detailed global statistics re capacity and investment trends, and  also discusses the considerable impact of the coronavirus. There is much good news – for example, over 27% of global electricity now comes from renewables, up from 19% in 2010…. The share of solar photovoltaic (PV) and wind power has grown more than five times since 2009” .  But there is also an urgent call to end fossil fuel subsidies and for other policy actions under the heading: “Momentum in renewable power hides a profound lag in the heating, cooling and transport sectors”.  The report states:

“It would be short-sighted to celebrate advances in the power sector without acknowledging the alarmingly low shares and slow uptake of renewables in the heating, cooling and transport sectors. …. Renewable shares in heating and cooling are low (10.1%) and struggle to increase, even as the sector accounts for more than half of total energy demand. Similarly, energy demand in transport – which accounts for a third of total energy demand – is growing the fastest by far, yet renewable shares barely exceed 3.3%. Ongoing dependence on fossil fuels for heating, cooling and transport is related to a lack of policy support for renewables in these sectors. There is still no level playing field. Many countries continue to uphold fossil fuel subsidies, which in 2018 increased 30% from the year before. Global fossil fuel subsidies totalled USD 400 billion, more than double the amount that governments spent on renewable power. ….. The massive support for fossil fuels hinders the already difficult task of reducing emissions and must be brought to a halt. “ In 2019, a record 200 gigawatts (GW) of renewable power capacity was added, more than three times the level of fossil fuel and nuclear capacity. Over 27% of global electricity now comes from renewables, up from 19% in 2010.– a remarkable rise attributed largely to continued cost declines for these technologies.”

On  June 11, the U.S.  Solar Energy Industry Association released its Solar Market Insight Report for the 2nd Quarter of 2020, forecasting a 31% drop in solar installations in 2020 over 2019, mostly  as result of Covid-19.   The SEIA  press release estimates that 72,000 workers in the U.S. have lost their jobs .  The Executive Summary  discusses the impact of the coronavirus extensively; only the Executive Summary is available for free. The report analysis is done by Wood MacKenzie consultants, and the full report is pricey.