Newfoundland government primes the pump with funding for offshore oil ahead of February election

Newfoundland and Labrador Premier Andrew Furey has called a  provincial election for February  13 –and according to a CBC report, one reason for the quick timing is to get ahead of the forthcoming Interim Report of the provincially-appointed Provincial Economic Recovery Team (PERT), scheduled for late February. The PERT is also called the Greene team for its chair, Dame Moya Greene, who brings a business background, having previously been head of Britain’s Royal Mail and Canada Post, as well as positions at TD Securities, CIBC and Bombardier. Another CBC article highlights that the economic report is going to be a controversial election issue, and discusses the January withdrawal from the team by Mary Shortall, president of the Newfoundland and Labrador Federation of Labour. Shorthall called the exercise “window dressing” , and stated: “I can say that the lack of transparency, top-down approach, rushed timeline, lack of real collaboration and an overall feeling that not all perspectives were being considered, or appreciated, are the overarching themes for my decision”.  Shortall’s departure is also discussed in an article in The Independent .

Another key election issue is likely to be the role of the oil and gas industry in the Newfoundland economy. The election announcement was preceded by a series of provincial funding announcements: on January 14, a government pledge of  $175 million funding as well as royalty incentives to Suncor to prop up the Terra Nova Offshore oil field; $38 million  for the Hibernia offshore project in December 2020; and $41.5 million for Husky Energy’s  White Rose project – all of which are funded by $320 million of federal funds, announced in September 2020. (Note that Husky Energy laid off workers at one of the worksites just days after the funding was announced) .

On January 12, the  Environment and Climate Change Minister issued his decisions under the Impact Assessment Act, allowing Chevron Canada, Equinor Canada, and BHP Petroleum to drill exploratory wells offshore from St. John’s – although further permits will be required, as explained in this new “Toolkit” regarding the process from the East Coast Environmental Law .  Provincial approval is likely to be forthcoming, given the pro-industry views expressed by the provincial Oil and Gas Recovery Task Force appointed in October 2020 to distribute the federal funding. Reflecting this favourable environment, Equinor announced that it is consolidating its Canadian offices and moving staff from Calgary to St. John’s, according to a Financial Post report (Jan. 12) .

What’s ahead for Canadian climate and energy policy in 2021?

The Canadian government has a full climate change agenda ahead when it reconvenes Parliament on January 25, not the least of which will be the debate and passage of Bill C-12, the Net-Zero Emissions Accountability Act , analyzed by the Climate Action Network here.  After its introduction in November, C-12 was criticized for lacking urgency and specific plans – for example, in an article by Warren Mabee in The Conversation which calls for three per cent to four per cent GHG reductions “every year, starting now.”

On December 11, the government  released its latest climate plan,  A Healthy Environment and a Healthy Economy, previously discussed in the WCR and noted primarily for its proposed carbon tax hike to $170 per tonne by 2050. According to  “The good, the bad and the ugly in Canada’s 2030 climate plan” (The National Observer, Jan. 18):  “The good news is that …The government’s recently announced A Healthy Environment and a Healthy Economy plan contains enough new climate policy proposals that, if implemented, will allow Canada to reach its 2030 target. The bad news is….Climate laws enacted by Canadian politicians to date don’t come anywhere close to meeting our 2030 target. With time running out and a gigantic emissions gap to close, Canada needs to enact climate laws now.”

Clean Fuel Standard, Hydrogen, and Small Nuclear Energy Policies released

On December 19, the government released the long-awaited draft regulations for a Clean Fuel Standard, triggering a 75-day consultation period, with final regulations expected in 2021, to take effect in 2022.   According to the government Q&A  website, the new regulations differ from previous drafts in that they apply only to liquid fossil fuels : gasoline, diesel and oil.  Producers and importers of fossil fuels will be required to reduce their carbon content by 2.6% by 2022 and by 13% by 2030 over 2016 levels.  Clean Energy Canada compiled the reactions of several environmental groups here .  The Pembina Institute called the regulations “both fair and cost-effective” in a press release reaction.  Their report , The Clean Fuel Standard: Setting the Record Straight (Nov. 2020) stated: “ The Clean Fuel Standard is expected to create as many as 30,000 jobs as new clean fuel facilities are built, supplied and operated. While some job losses could result from choices made under the CFS, robust modelling shows a net gain for Canadian workers: Energy-economic modelling suggests the CFS will yield a net employment gain resulting in between 17,000 and 24,000 additional jobs.” These projections are taken from on a technical analysis, conducted by Navius and EnviroEconomics consultants before the switch in scope to liquid fossil fuels only.  

Next, on December 16, the Minister of Natural Resources Canada released A Hydrogen Strategy for Canada: Seizing the Opportunities A Call to Action, another long-awaited strategy document which is the result of three years of study, analysis, and consultations, along with collaboration with industry associations: the Transition Accelerator, the Canadian Hydrogen and Fuel Cell Association (CHFCA), the Canadian Gas Association, and others . The report states that the government will now establish a Strategic Steering Committee, with several targeted task teams, to implement recommendations.  Key highlights of the Hydrogen Strategy are here; the government’s Hydrogen website is here . 

From page 86, a glimpse into the thinking behind the report:

“The energy transition will fundamentally shift the Canadian economy and alter value chains in many related sectors. One shift of particular importance is the transition away from the direct burning of fossil fuels without carbon abatement. Canada’s energy sector accounted for 900,000 direct and indirect jobs as of 2017, with assets valued at $596 billion . This industry’s significant energy expertise and infrastructure can be leveraged to support the development of the future hydrogen economy in Canada. Hydrogen will be critical to achieving a net-zero transformation for oil and natural gas industries. It provides an opportunity to leverage our valuable energy and infrastructure assets, including fossil fuel reserves and natural gas pipelines, providing a pathway to avoid underutilizing or stranding these assets in a 2050 carbon neutral future. Leveraging these valuable assets will not only be instrumental in achieving the projected economic growth for the domestic market, but also presents the opportunity for Canada to position to become a leading global clean fuels exporter.”

Regarding regulatory changes, the report states: “Policies and regulations that encourage the use of hydrogen technologies include low carbon fuel regulations, carbon pollution pricing, vehicle emissions regulations, zero emission vehicle mandates, creation of emission-free zones, and renewable gas mandates in natural gas networks. Mechanisms to help de-risk investments for endusers to adapt to regulations are also needed.”  There is no mention of training or transition policies, although the report  forecasts a  job creation potential for hydrogen which might reach more than 350,000 jobs in 2050 at the upper end  – “a combination of new job growth and retrained and reskilled labour”. (pages 85 and 86).  

 An article in The National Observer discusses the strategy, the state of hydrogen initiatives in Alberta , and reaction of environmental groups, including a quote from  Environmental Defence, saying: “…. “a focus on fossil hydrogen only serves the interests of the oil and gas sector as they seek to create new markets for their products.” Similarly, Clean Energy Canada released a statement saying, “Canada’s long-awaited federal hydrogen strategy … falls short of what some other nations have put forward in terms of investment and ambition.”   A New Hope, published in October 2020, fleshes out Clean Energy Canada’s recommendations about hydrogen in Canada.

Finally, on December 18, Canada’s Minister of Natural Resources released a national Small Nuclear Reactor Action Plan (SMR) , which responds to the 53 recommendations identified in Canada’s SMR Roadmap from November 2018. The list of organizations endorsing the SMR Agenda reflects the entrenched “who’s who” of Canada’s “ 75-year nuclear energy heritage.”  Each of these organizations – governments, public utilities, Indigenous groups, and unions, contributed a chapter to the Plan – available here. Individual endorsements include: the International Brotherhood of Electrical Workers; The International Union of Operating Engineers ; Power Workers Union – which highlights the pending closure of the Pickering Nuclear Generating Station in 2025 and the need to transition that workforce; and the National Electrical Trade Council (NETCO) a workforce development organization for Red Seal electrical trades in Canada, jointly led by  the Canadian Electrical Contractors Association (CECA) and the International Brotherhood of Electrical Workers (IBEW) .

Over 400,000 Clean Energy jobs lost in the U.S. since the start of the pandemic

U.S. government employment figures for December 2020 show that the U.S. clean energy sector added 16,900 jobs in December. However, analysis released on January 13 reveals that the recovery is slow, and the industry now has its lowest number of  workers since 2015, having suffered a loss of over 400,000 jobs (12%) during the Covid-19 pandemic.

Clean Energy Employment Initial Impacts from the COVID-19 Economic Crisis, December 2020  was prepared by BW Research Partnership, commissioned by industry groups E2 (Environmental Entrepreneurs), E4TheFuture, and the American Council on Renewable Energy (ACORE) . The 17-page report provides data by state and by technology, with energy efficiency leading the losses with 302,164 total jobs lost nationally between February and December 2020. California was the hardest hit state. 

This is the latest in a monthly series of reports tracking the impact of Covid-19 on clean energy jobs – the series is available at the E2 website here. These reports document the dramatic shift in clean energy employment in the U.S; the E2 Clean Jobs America 2020 annual report  outlines the industry’s policy recommendations for recovery as of April 2020.     

  

81% of carbon captured to date used in Enhanced Oil Recovery according to new report

Canada’s newly-released climate plan, A Healthy Environment and a Healthy Economy   (Dec. 2020)  states that one of the government’s objectives is to: “Develop a comprehensive carbon capture, use and storage (CCUS) strategy and explore other opportunities to help keep Canada globally competitive in this growing industry.” As a  clue to where that is going, the government also states: “The broad range of compliance strategies allowed under the proposed Clean Fuel Standard will give fossil fuel suppliers the flexibility to choose the lowest cost compliance actions available. The same compliance strategies that will support the Clean Fuel Standard will also ensure Canada becomes a leader in carbon capture, utilization and storage, hydrogen production, and other technologies that will allow Canada to extract energy from its resources while significantly reducing and eventually eliminating carbon pollution.”  The government is no doubt influenced by such views as those in the energy-industry Public Policy Forum, which calls for a favourable regulatory environment in Carbon Capture Utilization and Storage – The Time is Now (July 2020). (this report is mainly focused on energy industry applications but also discusses decarbonization of industrial processes briefly).

A December report commissioned and released by Friends of the Earth Scotland and Global Witness focuses only on energy industry applications, and comes to a different conclusion. A Review of the Role of Fossil Fuel Based Carbon Capture and Storage in the Energy System concludes that carbon capture and storage systems will not be as effective in reducing GHG emissions as would  ramped up renewable energy generation and  energy efficiency measures. Further, the authors state that “2030 emissions reduction targets are being set up to fail due to the huge emphasis placed on CCS.”  The authors, from the UK’s Tyndall Centre for Climate Change Research, highlight three main barriers to success: prohibitive costs;  time to reach commercial scale;  and the residual emissions from CCS, especially methane. Canada’s Boundary Dam coal-fired power plant in Saskatchewan is discussed, and cited as an example of prohibitive costs, with capital costs of approximately US$455 million and a capture cost of US$100 per tonne of CO2.  The report notes that there are just 26 operational CCS plants in the world, and significant scale is not forecast until at least 2030.  And the authors state that 81% of carbon captured to date has been used for Enhanced Oil Recovery (EOR) – a process which pumps captured carbon underground to push previously unreachable fossil fuels up for extraction, extending the life of oil fields.  This contributes to the problem of CCS-linked emissions of carbon dioxide and methane .

A Review of the Role of Fossil Fuel Based Carbon Capture and Storage in the Energy System is summarized in an Executive Summary and by the Climate News Network . The International Energy Agency has released a number of reports related to CCUS , most recently Special Report on Carbon Capture Utilisation and Storage; CCUS in clean energy transitions.  Another source of information is the Global Carbon Capture and Storage Institute which maintains a database of information and advocates for CCUS adoption in its publications.  

Global Just Transition case studies from a trade union viewpoint

Just Transition: Putting planet, people and jobs first” is the theme of a special issue of Equal Times, published in December 2020. The compilation of articles provides a trade union point of view  to describe the just transition experiences in Bangladesh, Tunisia, Argentina, and Senegal, as well as the more frequently cited experiences in Spain and Scotland.  The complete Special Issue is here , and was supported financially by the Friedrich-Ebert-Stiftung.

Although Spain’s 2018 agreement regarding coal transition is well known, this article is a welcome English-language text, translated from the original Spanish version written by Spanish journalist María José Carmona. Another useful English text on the topic is The Just Transition Strategy within the Strategic Energy and Climate Framework, translated and published by the Spanish government in 2019.  And an earlier report from the Central Confederation of Finnish Trade Unions (SAK) provides brief summaries of Spanish and other Just Transition frameworks, in A Fair Climate Policy for Workers: Implementing a just transition in various European countries and Canada (2019). It covers Germany, Spain, France, The Netherlands, Norway, Scotland, and Canada in a brief 32 pages.