How to phase out Alberta’s Oil Sands by 2040, including Just Transition principles

Gordon Laxer, Professor emeritus at the University of Alberta and founding director of the Parkland Institute, has released a new report, Act or be Acted Upon. The case for phasing out Alberta’s Sands .  He summarized the report  in an article,  “The case for phasing out Alberta’s Tar Sands” , which appeared in Resilience  on May 23.   The full report reflects the author’s long and deep understanding of the political economy of Alberta. His fairly brief discussion of Just Transition principles occurs at the end of the report.

Syncrude_mildred_lake_plant

From Wikimedia, in the public domain. Syncrude Lake Mildred plant, Alberta.

Section 1 of Act or be Acted Upon discusses the market forces and policy environment in which the oil sands continues to operate – including a discussion of the cap on emissions put in place in the Alberta government’s Climate Leadership Plan , and the issues of divestment and stranded assets. Looking for lessons to be learned, Section 2 examines the international and Canadian progress in banning coal-fired power, with a detailed look at Ontario’s experience and Alberta’s current efforts. The author emphasizes the importance of the health-based  arguments in Ontario’s campaign against coal, and suggests two possible motivators for an Alberta campaign against the oil sands: first,  the under-reported  health effects on residents and workers around Fort McMurray, the Peace River country, and the Aboriginal community of Fort Chipewyan,  and second, the devastating wildfire in Fort McMurray in 2016.

Section 3: “Phasing out the oil sands”,  calls for a permanent moratorium on new projects and a schedule for shutting down older projects that have paid off their capital costs- starting with the Suncor and Syncrude projects  which are over 50 years old. Finally, the author calls for replacing the existing emissions cap under the Climate Leadership Plan with  “an annually lowering GHG ceiling on all remaining Sands projects until they collectively reach zero by 2040.”

The final section of the Green Paper states: “It’s vital that phasing out the Sands be accompanied by a well-thought-out plan to provide workers and communities in the Sands with alternative work and retraining…. A just transition is the right thing to do, but it is also needed because if workers involved in the Sands don’t see a sure-fire alternative, they will fight hard to hang on to the Sands jobs they currently have, which will hamper the changes Alberta and Canada need to make.”   Those looking for new approaches to Just Transition will have to hope that Professor Laxer writes another paper – in this one, he goes only so far as to endorse the Just Transition principles set out in the October 2016 paper from the UNFCCC,  Just transition of the workforce, and the creation of decent work and quality jobs  .  To recap, those are: • Develop skills and retraining for green jobs  • Develop green enterprises • Promote government programmes to help the unemployed find work • Provide social protection • Minimize hardship for workers and address their needs • Consult all stakeholders to plan for a just transition.

Recalling the huge federal and provincial government research subsidies in the 1960’s that launched the oil sands, Professor Laxer concludes with this:  “The same governments now need to devote as much research money in today’s dollars to plan useful employment for Sands workers necessitated by the shift to a low-carbon future.”

after the SandsAct or be Acted Upon. The case for phasing out Alberta’s Sands  is a “Green Paper”, commissioned by the Alberta Institute of Agrologists and presented to them in March 2017.  Related reading:  Gordon Laxer’s book from 2015 , After the Sands. Energy and Ecological Security for Canadians ;   and from the Parkland Institute:  Restructuring in Alberta’s oil industry: Internationals pull out, domestic majors double down (April 2017);  Five things to know about Alberta’s oil sands emissions cap   (Feb. 2017); Extracted Carbon: Re-examining Canada’s Contribution to Climate Change through Fossil Fuel Exports (Jan. 2017).

EU Industry pledges no new coal plants as Australians mobilize to fight the giant Adani coal project

The Union of the Electricity Industry (EURELECTRIC), representing 3500 companies across Europe, released a statement on April 5, pledging that no new coal-fired plants will be built in the EU after 2020.   “The European electricity sector believes that achieving the decarbonisation objectives agreed in the Paris Agreement is essential to guarantee the long-term sustainability of the global economy. EURELECTRIC’s members are committed to delivering a carbon neutral power supply in Europe by 2050, and to ensuring a competitively priced and reliable electricity supply throughout the integrated European energy market.” Poland and Greece remain outside the agreement, and apparently outside the mainstream.

The Guardian calls the EU position   a “death knell for coal”,    and in a separate piece, summarizes the decline of coal-fired electricity around the world.  “Coal in ‘freefall’ as new power plants dive by two-thirds”  (March 22)    quotes a new report by Greenpeace  , Sierra Club USA,  and Coalswarm   :  Boom and Bust 2017: Tracking The Global Coal Plant Pipeline.   Its findings show a 62 percent drop in new construction starts, and an 85 percent decline in new Chinese coal plant permits. A senior Greenpeace official states: “2016 marked a veritable turning point”.  “China all but stopped new coal projects after astonishing clean energy growth has made new coal-fired power plants redundant, with all additional power needs covered from non-fossil sources since 2013. Closures of old coal plants drove major emission reductions especially in the U.S. and UK, while Belgium and Ontario became entirely coal-free and three G8 countries announced deadlines for coal phase-outs.”

Stop-Adani-LogoYet in Australia, environmentalists are waging an epic environmental battle against a giant, $16.5-billion coal mine adjacent to the Great Barrier Reef, proposed by Indian energy conglomerate Adani. Government supporters, including the Prime Minister and politicians in Queensland, have argued that the mine would bring jobs and would not increase GHG emissions globally because Australian coal is cleaner than any other that India would be able to source from other countries; see an article in Climate Home for the rebuttal to that.  Voices in opposition include Bob Brown, a former Green Party leader, who states  : “This is the environmental issue of our times and, for one, the Great Barrier Reef is at stake. The Adani corporation’s dirty coalmine is an impending disaster with effects which will reach far beyond Australia.”  Or read:   “It’s either Adani or the Great Barrier Reef – are we willing to fight for a Wonder of the World?”   in The Guardian.   Thirteen community groups, claiming to represent 1.5 million Australians have joined the Stop Adani Alliance since its launch in March, and the Australian Conservation Foundation is behind another high-powered campaign . For context, see “The coal war: Inside the fight against Adani’s plans to build Australia’s biggest coal mine” from the Sydney Morning Herald.   For a catalogue of “the ten most-absurd things about the Adani mine ” , see “Australia’s Climate bomb: the senselessness of Adani’s Carmichael coal mine”    in The Conversation (April 12).

UPDATE:  An April 24 analysis  of the bleak prospects of the Carmichael Mine proposed by Adani for Australia  “Adani: Remote Prospect: Carmichael Status Update 2017”  .

Just Transition proposals for Australia’s Coal Industry workers

Flag_of_Australia.svgOutside of the United States, it seems that there is general recognition that the coal industry is in decline, and that this demands a planned response to transition both the energy mix and the communities and workers.  The Institute for Sustainable Development and International Relations (IDDRI) in Paris, for example, is coordinating a Coal Transitions Project, bringing together researchers from Australia, South Africa, Germany, Poland, India and China, to publish reports examining past experiences in the six countries in March 2017, culminating with a global report and a consideration of the future of coal by 2018.

Australia’s coal production has a long and highly-political  history – summarized in  “The long-term future of Australian coal is drying up”  in The Conversation (October 2015), or “Australia’s Addiction to Coal” in the New York Times (November 14, 2016) . Amidst this highly political climate, the current government established a  Senate Inquiry into the Retirement of Coal Fired Power Stations in October 2016,  to examine “the transition from ageing, high-carbon coal generation to clean energy”  in light of the Paris Agreement commitments on emissions reductions , and the Agreement’s  provisions re just transitions. The deadline for the Inquiry’s Final Report has been extended to the end of March; an  Interim Report was released at the end of November 2016, with Chapter 4 devoted to options for managing the transition for workers and communities.   Submissions to the Senate committee are here, listed by author. Three  noteworthy examples: the Australian Psychology Association reviews the “flow-on psychosocial impacts on individuals, families and whole communities” of mass closures, but argues for the possibility of  building “vibrant, diversified, energy sustainable communities with good local jobs, and capable of lifting the prospects of all citizens”. The submission states: “Community-led transitions that identify the community’s needs and resources, involve the community in the formulation and control of change, and strengthen the local people’s capacity for action, are critically important components of planned transitions. “”  The Appalachian Transition  and Renew Appalachia are cited as models of community building.

The Australian Council of Trade Unions (ACTU) submitted a thorough, 30-page proposal:  Sharing the challenges and opportunities of a clean energy economy: Policy discussion paper. A Just Transition for coal-fired electricity sector workers and communities.  Amongst the recommendations: establish  a “national independent statutory authority”, named Energy Transition Australia (ETA), within the environment and energy portfolio, and reporting to the Minister and parliament.   The  ETA would be overseen by a tripartite advisory board comprised of industry, unions and government, with a mandate to  oversee a planned and orderly closure of Australia’s coal fired power stations;  “manage an industry-wide multi-employer pooling and redeployment scheme, where existing workers would have an opportunity to be redeployed to remaining power stations or low-emissions generators; and  develop a labour adjustment package to support workers obtain new decent and secure jobs, including by providing funding for workers to access job assistance support, retraining, early retirement and travel and relocation assistance.”

Finally, a submission by Professor John Wiseman  of the Melbourne Sustainable Society Institute lists and synthesizes many of the recommendations from recent  Just Transition publications, including   Life After Coal: Pathways to a Just and Sustainable Transition for the Latrobe Valley  (October 2016). This report by the Environment department of the province of Victoria  focuses on the four Hazelwood coal-fired power plants, scheduled to close as early as April 2017.

Union Proposals for a Just Transition for Alberta’s coal workers

The phase-out  of the Alberta’s  coal -fired electricity generation  is in the works, with regulations begun by the Harper government and continued by the current provincial government in its Climate Leadership Plan  . Approximately 3,000 workers at 18 coal-fired electricity plants and their associated mines will be affected by the end of the phase-out in 2030.  In September 2016, consultant Terry Boston submitted recommendations to the government on how to transition the electricity supply; for public consultation about transition issues for workers and communities, an  Advisory Panel on Coal Communities  was established, and is scheduled to release its report “in early Spring 2017”.

On March 3, the union-based  Coal Transition Coalition  unveiled its detailed policy recommendations for the Advisory Panel.    Getting it Right: A Just Transition Strategy for Alberta’s Coal Workers , aims  to influence discussion early on in the planning process,  to ensure that issues such as  pensions, severance, labour-retention strategies and

coal transition coalition

Coal Transition Coalition logo

economic diversification are built in from the start. Getting it Right chronicles government policies and the coal mines to be affected, then describes in detail four case study examples of coal transitions in the U.S. and the Rhuhr Valley in Germany .  These case studies form the basis of the    “Lessons learned”  section, which in turn form the basis of the recommendations.

The Coalition’s recommendations emphasize  the advantage of a long-lead time available, the importance of unique, community-led plans, and the importance of public and political acceptance of the Transition programs.  Income replacement and severance benefits are a central concern – calling for enhanced federal Employment Insurance program benefits, and a provincial pension bridging trust fund with adequate reserves to help workers just shy of retirement in 2030. The Coalition also recommends that the province conduct an audit of existing pensions and their coverage and gaps, and prepare a plan to ensure pensions are fully funded and mandated to  meet their obligations.  The report cites a separate report commissioned by the Alberta Federation of Labour, Pension And Benefit Plans In A Just Transitions Strategy For The Alberta Coal-Fired Electricity Industry (November 2016)), which is not available online.

The core recommendation is to establish an Alberta Economic Adjustment Agency , free of political interference, to develop “a just transition plan that places the interests of affected workers, their families and communities as its highest priority”.  Programs would be funded through an  Alberta Economic Adjustment Trust Fund, governed by an independent board of trustees to guard against any  political or industry interference, and financed through  contributions “on the order of $10 million to $20 million per year” leading up to 2030.   The report is silent on who will provide the funding.

The Coal Transition Coalition is led by the Alberta Federation of Labour and includes the following unions:  Canadian Energy Workers Association, CSU 52, International Brotherhood of Electrical Workers,   Ironworkers Local 720 , Unifor, United Steelworkers, and United Utility Workers Association.

Canadian government announces a phase-out of “traditional” coal-fired electricity by 2030

On November 21, the federal Environment Minister announced  that the four remaining provinces with coal-fired electricity  (Alberta, Saskatchewan, New Brunswick, and Nova Scotia) must  speed up the their emissions reduction targets. All traditional coal-fired units (i.e. those without carbon capture and storage)  will be required to meet a performance standard of 420 tonnes of carbon dioxide per gigawatt hour by no later than 2030, and performance standards must be developed  for new units to ensure they are built using efficient technology.  Details are set out in a Backgrounder  .  To allow for flexibility, Equivalency Agreements can be negotiated under the Canadian Environmental Protection Act , and both Nova Scotia and Saskatchewan are pursuing such agreements.  Nova Scotia, which announced  on November 21 that  it would  implement a cap and trade system which would  meet or exceed the federal emissions reduction target , will be allowed to continue to use coal in high-demand winter months even after 2030, (with no  specific date set yet for full compliance) .  Saskatchewan, which relies heavily on carbon capture and sequestration technology to meet its recent emissions reduction plan, is “displeased”  about the coal phase-out plan, according to a CBC report .  Alberta has already announced its own plans   for a coal phase-out by 2030, promising  support for workers and communities.  See the “Liberals present plan to phase out coal-powered electricity by 2030” CBC (Nov. 21) for a good overview.

 What does this mean for coal workers?  Currently, coal-fired power  generated at 35 plants represents over 70% of emissions in Canada’s electricity sector, but provides  only 11% of our  electricity.  The coal industry employs approximately 42,000 direct and indirect workers.   In “Canada’s rejection of coal will clear the air but impact workers and power bills” , the CBC (Nov. 22) examines the likely higher  electricity bills in store for consumers, and  the likely job losses.  The CBC article quotes Warren Mabee, a researcher with the Adapting Canadian Work and Workplaces to Climate Change project and the associate director of the Queen’s Institute for Energy and Environmental Policy: he states that many workers in coal mines will be laid off  “while others will shift to extracting metallurgical coal, which is used in the steel-making process.”  It is important to note that the government press release explicitly promises:“ The Government of Canada will work with provinces and labour organizations to ensure workers affected by the accelerated phase-out of traditional coal power are involved in a successful transition to the low-carbon economy of the future.”

Much of the government’s motivation for its initiative comes down to the health benefits of removing pollutants of coal-fired electricity – carbon dioxide, sulphur dioxide, nitrous oxide, mercury and other heavy metals .  The Pembina Institute, along with the Canadian Association of Physicians for the Environment, Canadian Public Health Association   and others, released   Out with the coal, In with the new: National benefits of an accelerated phase-out of coal-fired power  on November 21.  The report estimates that a  national coal phase-out by 2030 would prevent  1,008 premature deaths, 871 ER visits, and health outcomes valued at nearly $5 billion (including health and lower productivity costs) between 2015 and 2035.  The Pembina Institute reacted to the government announcement, calling it “timely” and “necessary .  Clean Energy Canada responded with  Quitting coal will drive clean growth and cut pollution.   BlueGreen Canada, which includes the United Steelworkers union, recently published the  Job Growth in Clean Energy report, which recognizes the world-wide decline of the coal industry, and states that, “if properly supported now, Alberta’s renewable energy sector will create enough jobs to absorb the coal labour force”.