Phase-out, not expansion of fossil fuels – some recommendations for Canada

Oil, Gas and the Climate: An Analysis of Oil and Gas Industry Plans for Expansion and Compatibility with Global Emission Limits was published by the Global Gas and OilGas-ReportCoverOil Network (GGON) in December 2019.  The report analyzes the expansion plans of the oil and gas industry in relation to the global Paris climate goal of a 1.5C warming limit, and concludes that “if the world uses all the oil and gas from the fields and mines already in production, it will push us beyond 1.5°C of warming. This is true even if global coal use were phased out overnight, and if cement emissions were drastically reduced.” This report is the latest to sound this alarm: for example, Oil Change International, part of the GGON , began to publish such warnings in 2016 with The Sky’s Limit: Why the Paris Climate Goals Require a Managed Decline of Fossil Fuel Production , followed by Drilling towards Disaster in 2019.

Oil, Gas and the Climate states that from now until 2024, oil and gas companies are set to invest a further $1.4 trillion U.S.  in new oil and gas extraction projects – with 85% of that expansion in North America, and with the impact of the U.S. alone putting a 2 degree warming target out of reach.  Further, it states that over 90% of U.S. expansion would be shale production dependent on fracking.  It highlights that the Permian Basin (west Texas and southeastern New Mexico) would account for 39% of new U.S. oil and gas production by 2050. “It holds the greatest risk for new oil and gas development in the United States and in the world.”

Projected Canadian investment is a distant second to that of the U.S., but even so, the report states that “new oil and gas development in Canada between now and 2050 could unlock an additional 25 GtCO2 , more than doubling cumulative emissions from the sector.” The report highlights the approved Exxon Aspen Oil Sands project and the pending Teck Frontier Mine, but warns  “…Shale gas extraction, particularly the Montney Shale Basin in British Columbia, is a major focus of the industry…From 2020 to 2050, new gas projects could be responsible for as much CO2 as new oil projects.” (For a recent overview of the extent of Canada’s LNG infrastructure, see The New Gas Boom, published by Global Energy Monitor in June 2019).

“A better future is possible”, and here’s how to get there:

Despite the grim projections, Oil, Gas and the Climate  argues that “a better future is possible” and calls for “the launch of a well-planned phase-out of oil and gas production that addresses the needs of workers and communities impacted by fossil fuel developments. ” The report recognizes the impact of recent civil society actions such as Fridays for Future and Extinction Rebellion, and calls on governments and investors to catch up with such leadership.

Based on the findings of the report, Environmental Defence makes the following recommendations to support Canada’s phase-out:

Clear new federal rules under our environmental assessment law that review possible expansions of oil and gas projects against our commitment to climate goals. If we cannot credibly demonstrate how investing in a fossil fuel project is consistent with a 1.5C warmed world then the project should not be permitted to go ahead.

Institutional investors should apply a similar screen that will guide their decisions regarding whether to provide financing for new projects.

The federal government must invest in research and development of new energy technologies like geothermal electricity that have huge employment and energy production opportunities in places like Alberta and northern British Columbia. At a minimum, the government should make available an amount equivalent to the billions in subsidies that have been given to the fossil fuel industry through tax breaks or direct investment in pipeline infrastructure (e.g. Trans-Mountain) – subsidies that should be phased out rapidly. Success will create skills-linked jobs and massive supply of electrical energy for export to a North America that must replace the energy of fossil fuels.

Domestic demand for fossil fuels must be rapidly driven down through improved efficiency (e.g. buildings, appliances, manufacturing), electrifying transportation and home heating and increased renewables generation and storage.

The Oil, Gas and the Climate report is a project of the Global Gas and Oil Network , supported by Oil Change International; 350.org; Center for Biological Diversity; Center for International Environmental Law; CAN-Rac Canada; Earthworks; Environmental Defence Canada; Fundacin Ambiente y Recursos Naturales:FARN; Global Witness; Greenpeace; Friends of the Earth Netherlands (Milieudefensie); Naturvernforbundet; Observatorio Petrolero Sur; Overseas Development Institute; Platform; Sierra Club; Stand.Earth.

British Columbia sets new GHG reduction targets, reviews environmental assessment process

Amidst the noise and fury of the B.C.-Alberta feud over the Kinder Morgan TransMountain pipeline,  the province of British Columbia is moving forward with reform of its climate change policies. On April 25, the  B.C. Climate Solutions and Clean Growth Advisory Council released a detailed letter to the Minister of Environment and Climate Change Strategy , describing the Council’s principles, supporting much of the government’s current direction, and making recommendations, based on the 2015 recommendations of the province’s Climate Leadership Team. Shortly thereafter, on May 7, a government press release  committed to  a new provincial climate action strategy to be released in autumn 2018, including plans for GHG emission reduction  for buildings and communities, industry and transportation sectors.

With that same press release, the government announced Bill 34, the Climate Change Accountability Act,  which amends the Greenhouse Gas Reduction Targets Act (2007), repealing the emissions reduction target for 2020 (generally deemed unachievable)  and sets new targets: reduction of GHG’s by 40% from 2007 levels by 2030, 60% by 2040, and 80% by 2050.  Accountability looms large in the responses to Bill 34.  The Pembina Institute  notes the failure of recent GHG emissions reductions, and calls for “a robust accountability mechanism to ensure history doesn’t repeat itself ”. In addition, Pembina notes that any development of emissions-intensive industries, such as liquefied natural gas, would jeopardize the province’s climate progress.

In “Looking for accountability in BC’s Climate Change Accountability Act”,  West Coast Environment Law reviews B.C.’s emissions reduction progress , summarizes responses by other environmental groups to Bill 34, and recommends how the government can incorporate principles of accountability and transparency in its new policies.  Similar concerns are discussed in “A Carbon Budget Framework for BC: Achieving accountability and oversight”  by Marc Lee, in CCPA’s Policy Notes (May 22).

Another policy issue under review in B.C. is environmental assessment, with a 12-member advisory committee appointed in March 2018, a public discussion paper promised for May, and reforms to come in Fall.  The government portal to the “Revitalization” process is here ;  “B.C. Moves Ahead With Review of Controversial Environmental Assessment Process”  (Mar 8) summarizes the situation.   On May 9,  twenty-three environmental, legal, social justice and community organizations released  Achieving Sustainability: A Vision for Next-Generation Environmental Assessment in British Columbia , which calls for an independent environmental assessment body which will involve the public, and require decision-makers to demonstrate that their decisions are based on science and Indigenous knowledge. A summary, with links to more detailed discussion  is provided by West Coast Environmental Law.  Analysis and practical examples are provided by Sarah Cox in  “Time For a Fix: B.C. Looks at Overhaul of Reviews for Mines, Dams and Pipelines”, which  appeared in April in the newly-named newsletter from DeSmog Canada, The Narwhal.

Low-carbon technologies to the rescue: Solar PV, Electric Vehicles, CCS, and a replacement for cement

cover-expect-the-unexpected-300x225Expect the Unexpected: The Disruptive Power of Low-carbon Technology  is a new report by the Grantham Institute at Imperial College London and the Carbon Tracker Initiative. The report models energy demand by combining up-to-date solar PV and electric vehicle cost projections with climate policies based on the UNFCC Nationally Determined Contributions statements. The results are contrasted with the current “Business as Usual” scenarios of the major fossil fuel companies, and demonstrate how Big Oil underestimates the impact of solar and EV technologies. Expect the Unexpected forecasts peak oil and gas by 2020, with electric vehicles accounting for over two-thirds of the road transport market by 2050, and states that  Solar PV  “could supply 23% of global power generation in 2040 and 29% by 2050, entirely phasing out coal and leaving natural gas with just a 1% market share.”

The report and addresses the question, “What contribution can accelerated solar PV and EV penetration make to achieving a 2°C target?”   It  provides various scenarios, but concludes that decarbonisation of heavy industry (specifically iron and steel, cement, chemcials)  will  also be required and essential.  On this front, the report states that Carbon Capture and Storage (CCS) is unlikely to be financially viable in power generation, but “ In non-power sectors such as heavy industry, however, CCS is likely to have a much more important role because there are currently few viable low-carbon alternatives for achieving deep decarbonisation. Furthermore, if CO2 can be utilised in other industrial processes, this added value will serve to improve the viability of CCS.”

One such low-carbon alternative for cement production – albeit one which is still in development – is reported in a  recent article by University of Victoria’s Pacific Institute for Climate Solutions .  Based on the premise that most of the CO2 produced in cement manufacture is not in the kiln-heating process, but rather by the chemical reaction of turning limestone into quicklime, researchers at McGill University in Montreal  have developed a building product called Carbicrete, which  replaces Portland cement with steel slag (a waste product) as its main binding agent.   Read details in “Solving the Thorny problem of Cement Emissions”   (Feb. 1).

Use this link to view The Expect the Unexpected main report, a technical report, and an interactive dashboard allowing readers to manipulate elements of climate policy, technology price, and energy demand are available here.

 

Trudeau welcomes Trump’s Keystone pipeline decision – can we really have it both ways?

The House of Commons Standing Committee on Natural Resources delivered its report on The Future of Canada’s Oil and Gas Industry  in September 2016; see the WCR coverage from September here.   On January 19, the Government released its Official Response to the Committee Report, with this introductory statement: “It is clear to our Government that in order for the energy sector to continue to be a driver of prosperity and play a part in meeting global demand for energy, resource development must go hand in hand with the environmental and social demands of Canadians.”  Not surprising then, that when Donald Trump opened the door for construction of the Keystone Pipeline on January 24, Justin Trudeau and his cabinet members welcomed the news .

ccpa_extractedcarbon_shareYet author Marc Lee reinforces what others have stated in his January 25 article in CCPA Policy Notes.   “Canada can’t have it both ways on environment”  demonstrates that “the amount of fossil fuel removed from Canadian soil that ends up in the atmosphere as carbon dioxide—has grown dramatically. ”  Although not technically “counted” in our own emissions reporting under the Paris Agreement, the emissions from Canada’s fossil fuel exports, counted in the countries where they are burned, is greater than Canada’s total GHG emissions within the country.  Lee goes on: “Based on our share of global fossil fuel reserves, Canada could continue to extract carbon at current levels for between 11 and 24 years at most (the smaller the carbon budget, the less the damages from climate change). This means a planned, gradual wind-down of these industries needs to begin immediately.”

Marc Lee’s article summarizes  a more complete report he authored for the Corporate Mapping Project, jointly led by the University of Victoria, Canadian Centre for Policy Alternatives and the Parkland Institute.  Extracted Carbon: Re-examining Canada’s contribution to climate change through fossil fuel exports  updates a 2011 CCPA report, Peddling GHGs: What is the Carbon Footprint of Canada’s Fossil Fuel Exports?  in the context of the Paris Agreement and Canada’s contribution to the global carbon budget.  It concludes that “Plans to further grow Canada’s exports of fossil fuels are thus contradictory to the spirit and intentions of the Paris Agreement. Growing our exports could only happen if some other producing countries agreed to keep their fossil fuel reserves in the ground.  The problem with new fossil fuel infrastructure projects, like Liquefied Natural Gas (LNG) plants and bitumen pipelines, is that they lock us in to a high-emissions trajectory for several decades to come, giving up on the 1.5 to 2°C limits of Paris.”  It follows that “Canadian climate policy must consider supply-side measures such as rejecting new fossil fuel infrastructure and new leases for exploration and drilling, increasing royalties, and eliminating fossil fuel subsidies.”

Recommendations by House of Commons committee is at odds with GHG reduction

The House of Commons Standing Committee on Natural Resources  released its second report, The Future of Canada’s Oil and Gas Sector: Innovation, sustainable solutions and economic opportunities  on September 21. The report summarizes the comments from 33 witnesses who appeared before the committee in 7 meetings, and makes recommendations, including: “1. The Committee recommends that the Government of Canada continue to promote the benefits of investing in Canada’s Natural Resources sectors, including oil and gas, which shall include the continued encouragement of innovation, research and development.” And “2.The Committee recommends that the Government of Canada work in collaboration with industry and the indigenous, provincial, territorial, and municipal governments to develop the supporting infrastructure needed to create a favourable environment for natural resource development and transportation, and to deliver oil and gas products to strategic domestic and international markets.”    The Dissenting Report from the Conservative members goes even further to support the fossil fuel industry, making 5 recommendations which include:   “We strongly encourage the government not to impose any additional tax or regulation on the oil and gas sector or the Canadian consumer that our continental trading partners and competitors do not have. This includes measuring the upstream greenhouse gas emissions from pipelines…”  The Opinion statement by the New Democratic Party members of the Committee calls for speedy, permanent changes to the National Energy Board assessment process, and for the Government to honour its obligation for a Nation to Nation relationship with Indigenous peoples, including proper consultation and accommodation on all energy projects and the protection of Indigenous rights.   The NDP also states its support for the testimony of Gil McGowan, President of the Alberta Federation of Labour, calling for support for  value-added development of the oil and gas industry, “because these kinds of investments not only create jobs directly in upgrading, refining, and petrochemicals but also create other jobs”.

Contrast these recommendations with the message released on the next day, September 22,  by Oil Change International in its report,  The Sky’s Limit  .  The report states that developed reserves of oil and gas alone would take the world beyond 1.5°C, even if coal were phased out immediately, and lists examples of some of the biggest projects around the world that cannot go ahead – in the U.S., Canada, Australia, India, Russia, Qatar and Iran .   It concludes that “To stay within our carbon budgets, we must go further than stopping new construction: some fossil fuel extraction assets must be closed before they are exploited fully. These early shut-downs should occur predominantly in rich countries.”   (This urgency is in the spirit of a recent Dutch parliamentary vote in favour of closing down all remaining coal-generation power plants, even though 3 of them were just opened in 2015: see the article in The Guardian ).

The Sky’s the Limit states further, “extraction should not continue where it violates the rights of local people – including indigenous peoples – nor should it continue where resulting pollution would cause intolerable health impacts or seriously damage biodiversity.”  Finally, in a discussion of Just Transition, “ The most critical questions lie in how industry and policymakers will conduct an orderly and managed decline of fossil fuel extraction, with robust planning for economic and energy diversification.”