Will the fossil fuel industry hijack energy policy in Canada’s election?

As the Canadian federal election campaign counts down to October 21, The Narwhal’s Explainer from September remains one of the most readable and interesting overviews of the parties’ energy and environmental platforms;  the survey responses from a consolidated questionnaire from the major environmental advocacy groups remains the most complete.  Climate activism has been a backdrop to the campaign: according to Fridays for Future Canada, over one million Canadians in 245 communities participated in climate strikes between September 20 to September 27 (a summary from Energy Mix gives more details).  On October 7, Extinction Rebellion began their demonstrations, blockading  bridges in Vancouver, Victoria, Toronto, Edmonton and  Halifax –  and according to the Vancouver  Star, pledging to escalate actions.

New publications regarding the fossil fuel industry:

Canada’s relationship with its oil and gas industry was the subject of a country profile of Canada published by Carbon Brief on October 8, providing the basic facts and figures.  The Narwhal published an Opinion Piece highlighting  the issue of fossil fuel subsidies:  “Canada’s fossil fuel subsidies amount to $1,650 per Canadian. It’s got to stop.” The article is based on a May 2019 report from the International Monetary Fund  which estimated Canada’s fossil fuel subsidies at close to $60 billion in 2015, despite the government’s G20 commitments to phase out “inefficient” fossil fuel subsidies. A related report by Environmental Defence and the International Institute for Sustainable Development in February, Doubling Down with Taxpayer Dollars , examined $2Billion in fossil fuel subsidies in Alberta.

The Canadian Association of Petroleum Producers (CAPP)  Energy Platform – essentially  a “wish list” from the fossil fuel industry – calls for expanded production for oil and gas and Liquefied Natural Gas.  In report released on October 7, Environmental Defence estimates that the CAPP proposals would increase  oil and gas emissions by 60% from 2017 to 2030.  The report,  The Single Biggest Barrier to Climate Action in Canada – the Oil and Gas Lobby, documents the two types of barriers created by the oil and gas lobby: 1. the actual carbon emissions of the sector, which are responsible for 27% of Canada’s greenhouse gas emissions and for 80 % of the increase in Canada’s overall emissions; and 2. Industry campaigns and lobbying to block or weaken climate change policies.

env diefence re Oil-Lobbyin electionRegarding the economic benefits which the oil and gas industry claims, Environmental Defence states:  “… job creation in oil and gas is far from guaranteed even as the industry expands and reaps significant corporate profits. Despite growing production since 2014, almost 30,000 jobs (10 per cent of the workforce) have been axed in the oil patch in the following four years, with another 12,000 expected to be cut in 2019. That’s because oil and gas companies are moving increasingly towards automation, with the stated goal to “de-man” the industry. Meanwhile, the CEOs of companies such as Suncor, Encana, TransCanada, and CNRL rake in salaries north of $10 million per year.”

The report concludes: “ Canada is bigger than oil. The opportunities that are available to Canadian businesses, citizens, and governments get shortchanged when one industry is able to hijack public policy on energy development and environmental protection.”  Or, as Richard Heede wrote more bluntly in a new series in The Guardian called  The Polluters: “It’s time to rein in the fossil fuel giants before their greed chokes the planet” . Heede’s Opinion article is based on the latest research about the global fossil fuel industry by the Climate Accountability Institute.  The research found that “chiefly from the combustion of their products, the top 20 companies have collectively produced 480bn tonnes of carbon dioxide and methane since 1965 – 35% of all fossil fuel emissions worldwide in that time.”  The press release names the top 20 polluters, led by Saudi Aramco, Chevron, ExxonMobil, GazProm, and BP. All research and data is here .

With progressive policies, Canada’s clean energy sector will provide over 500,000 jobs by 2030

Two new economic studies project the potential for growth in the clean energy sector to 2030 in  Canada and in Nova Scotia.

fast laneOn October 3, Vancouver-based Clean Energy Canada announced  its new report, The Fast Lane , which predicts that “ Canada’s clean energy sector will employ 559,400 Canadians by 2030—in jobs like insulating homes, manufacturing electric buses, or maintaining wind farms. And while 50,000 jobs are likely to be lost in fossil fuels over the next decade, just over 160,000 will be created in clean energy—a net increase of 110,000 new energy jobs in Canada.”  That translates into a job growth rate of 3.4% a year for clean energy from 2020, compared to an overall job growth rate of 0.9% for Canada as a whole and a decline of 0.5% a year for the fossil fuel sector.

missing the bigger pictureNavius Research conducted the economic modelling underlying The Fast Lane, as well as a May 2019 Clean Energy Canada report, Missing the Bigger Picture  , which reports on clean energy investment and jobs from 2010 to 2017.  The more detailed economic modelling reports by Navius are available as  Quantifying Canada’s Clean Energy Economy: A forecast of clean energy investment, value added and jobs  , and Quantifying Canada’s Clean Energy Economy: An assessment of clean energy investment, value added and jobs (May).

The message for policy-makers is made clear in the introduction to The Fast Lane by Merran Smith, Executive Director of Clean Energy Canada: “The sector’s projected growth is modelled on policy measures either in place or announced in early 2019 at both federal and provincial levels. If climate measures are eliminated—as we’ve recently seen in Alberta and Ontario—our emissions will go up and Canadians working in clean energy could lose jobs.”

An article in The Energy Mix summarizes  The Fast Lane . It quotes Lliam Hildebrand, Executive Director of Iron and Earth , a worker-led non-profit which promotes upskilling and retraining for fossil fuel workers:  “It’s really important for people to know that most fossil fuel industry workers are really proud of their trades skills and would be excited—and are excited—about the opportunity to apply those skills to building a sustainable energy future …. But they need support in making that transition.”

A similar message comes through in “After oil and gas: Meet Alberta workers making the switch to solar”  , an article in The Narwhal which profiles three workers who have transitioned from jobs in the fossil fuel industry. The article also summarizes the policy environment in Alberta, where according to Statistics Canada, roughly 1 in every 16 workers in Alberta is employed in the category described as “forestry, fishing, mining, quarrying, oil and gas.” The Narwhal quotes  Rod Wood, national representative from Unifor, who states that the global energy transition “is going to happen in spite of Alberta…You’re either part of the conversation or you’re lunch. It’s just going to steamroll over you.” And  Mark Rowlinson of the United Steelworkers Union and BlueGreen Alliance Canada states: “ The market tends to move with its own feet. If the market sees that the future of the fossil fuel industry is not looking great, it will move quickly… And it will move without a plan. That means there will be wreckage left behind it, and that’s what we need to try to avoid.”

Clean economy policies could bring 180,000 jobs to Nova Scotia by 2030:

Nova Scotia’s Ecology Action Centre submitted what it calls a “Green Jobs Report” to the province’s consultation on its proposed Environmental Goals and Sustainable Prosperity Act, just ended on September 27.  EAC proposed six policy choices, including supplying 90% of the province’s electricity from renewables by 2030, with a summary  here.  A detailed report, Nova Scotia Environmental Goals and Sustainable Prosperity Act: Economic Costs and Benefits for Proposed Goals  was prepared by economic consultants Gardner Pinfold and estimates the benefits of each proposal,  with the conclusion that the proposed policies could create over 15,000 green jobs per year in Nova Scotia, for a total of just less than 180,000 job-years between now and 2030.

 

What if the financial sector moved away from fossil fuel investments?

On September 17, Bill McKibben, a leader of the divestment movement, wrote Money is the oxygen on which the fire of global warming burns , published in The New Yorker. The essay traces the progress of the divestment movement and asks, What if the banking, asset-management, and insurance industries moved away from fossil fuels?. On the same day came the announcement that “ University of California drops fossil fuels from its $80 billion portfolio”.   An article in Rolling Stone  quotes the UC representatives, stating “it wasn’t moral or political pressures that convinced them to phase UC’s hundreds of millions of dollars in fossil-fuel investments. Instead, they say, it was the growing realization that fossil fuel investments no longer made financial sense and weren’t a worthwhile investment.”

Investment performance of Fossil fuel companies

In what has been seen as an historical turning point, ExxonMobil lost its spot on the S&P Index list of “Top Ten Companies” in August 2019 –  the first time it had not appeared since the Index launched in 1957.  In 1980,  the energy sector as a whole represented 28% of the S&P 500 Index; as of August 2019, it represents  4.4%.  According to a summary by the Institute for Energy Economics and Financial Analysis (IEEFA), the energy sector claimed last place in the S&P rankings of sector performance in August 2019, following similar results in 2018 and 2017.“This is not some temporary aberration. The oil and gas sector is in decline, profits are shrinking and investment options problematic …. This is true even for companies like ExxonMobil that historically have deep pockets.”

The full Briefing Note,  ExxonMobil’s Fall From the S&P 500 Top Ten: A Long Time Coming (August 2019) also includes discussion of the role Canada’s oil sands have played in the decline of the industry.  Carbon Tracker Initiative provides further information in Exxon’s New Clothes – the tale of why Exxon lost its prized position in the S&P 500 .

Are the banking, asset-management, and insurance industries moving  away from fossil fuels?  

New initiatives launched at U.N. Climate Summit in New York in September point in that direction:

  1. 130 banks from 49 countries signed on to the Principles for Responsible Banking (PRBs), committing to align their business operations with the Paris Climate Agreement and the Sustainable Development Goals. Despite the fact that the Bank of Canada issued a report flagging the investment risks of climate change in May, the only signatories from Canada were the National Bank of Canada and the Desjardins Group . Hardly surprising, given the April 2019 Fossil Fuel Report Card from Banktrack , which showed that Canada’s big banks rank 5th, 8th, 9th and 15th in the world for fossil fuel invesment since the Paris Agreement in 2015. In response to the PRI pledge, civil society groups issued a statement, “No More Greenwashing: Principles must have Consequences ”  which highlights the lack of concrete plans and the slow time frame: signatory banks are allowed up to four years to demonstrate their implementation of the principles.  A thorough discussion published by Open Democracy asks “The UN banking principles are welcome – but do they go far enough to stop climate destruction?
  2. A new Net Zero Asset Owner Alliance  was launched, convened by the U.N. Environmental Program’s  Finance Initiative and the Principles for Responsible Investment, and supported by WWF as part of its Mission 2020 campaign. The Net Zero Asset Owner Alliance signatories are insurance and pension fund management companies which hold approximately $2.3 U.S. Trillion. Their commitment document  pledges to re-balance those investment portfolios to make them carbon neutral by 2050, with intermediate targets set for 2025, 2030 and 2040. Founding members include   German insurer Allianz, the California Public Employees’ Retirement System (CalPERS), Swedish pension fund Alecta, PensionDanmark, Swedish pension manager AMF, Nordea Life & Pension, Norwegian insurer Storebrand, and Swiss RE.
  3. European investment bank-logo-enThe European Investment Bank strengthened its climate commitments at the U.N. Climate Summit  pledging to “ position the EIB as an incubator for climate finance and expertise to mobilise others, helping our societies and economies transform to a low carbon future.” Specifically, the bank pledged that 50% of new investments will be for climate action and environmental sustainability by 2025 (previously the target had been 30% by 2020). Also,  “we aim to align all our financing activities with the principles and goals of the Paris agreement by the end of 2020. As an important first step, we will phase out energy projects that depend solely on fossil fuels.”
  4. financing the low carbon futureThe Climate Finance Leadership Initiative (CFLI) , chaired by Michael Bloomberg, released  Financing the Low Carbon Future  , a thorough but readable analysis of how clean energy investment works globally, with practical recommendations . The CFLI is composed of  senior executives of seven major private-sector financial institutions– Allianz Global Investors, AXA, Enel, Goldman Sachs, HSBC, Japan’s Government Pension Investment Fund (GPIF) and Macquarie.
  5. Over 500 environmental and advocacy groups from 76 countires supported the Lofoten Declaration at the U.N. Climate Action Summit. The Lofoten Declaration , (named after the Lofoten Islands of Norway where it was first drafted in 2017) states in part: “It is the urgent responsibility and moral obligation of wealthy fossil fuel producers to lead in putting an end to fossil fuel development and to manage the decline of existing production.”  Canada is one of those countries, and Catherine Abreu of Climate Action Network Canada was one of the supporters, stating: “True leadership in response to the climate emergency means having the courage to commit to ending the expansion of oil and gas production and make a plan to transition communities and workers to better opportunities.”  A summary  appears in “If a House Is on Fire, You Don’t Add Fuel’: 530 Groups Back Call to Rapidly Phase Out Fossil Fuels Worldwide” in Common Dreams (Sept. 23); Background to the Lofoten Declaration here  .

Much remains to be done:  Consider the September 2019 report by Carbon Tracker Initiative.  Breaking the HabitWhy none of the large oil companies are “Paris-aligned”, and what they need to do to get there. The report examines oil company investment activities , and concludes:

  • Last year, all of the major oil companies sanctioned projects that fall outside a “well below 2 degrees” budget on cost grounds. These will not deliver adequate returns in a low-carbon world. Examples include Shell’s $13bn LNG Canada project and BP, Total, ExxonMobil and Equinor’s Zinia 2 project in Angola.
  • No new oil sands projects fit within a Paris-compliant world. Despite this, ExxonMobil sanctioned the $2.6bn Aspen project last year – the first new oil sands project in 5 years.
  • The oil and gas in projects that have already been sanctioned will take the world past 1.5ºC, assuming carbon capture and storage remains sub-scale.

And Global Trends in Renewable Energy Investment 2019 , commissioned by the United Nations, was published in September, reporting the good news that  global investment in new renewable energy capacity, led by solar power, “ is set to have roughly quadrupled renewable energy capacity (excluding large hydro) in the decade ending in 2019. Renewables accounted for 12.9 percent of global electricity in 2018—and if hydropower is also included, the renewable’s share of global electricity production is  measured at 26.3%.  Cost-competitiveness of renewables has “risen spectacularly over the decade, as the levelised cost of electricity has been steadily decreasing, down 81 percent for solar photovoltaics and 46 per cent for onshore wind since 2009.”

Yet despite this good news, the report states: “Overall, we note that these figures represent a small share of the overall economic transition required to address climate change…. global power-sector emissions are likely to have risen by at least 10 percent between the end of 2009 and 2019.”

 

New modelling forecasts 46 million jobs by 2050 in a 100% renewable energy scenario

achieving paris goals teske coverA newly-released book, Achieving the Paris Climate Agreement Goals, provides detailed discussion of the the implications, including job implications,  of a transition to 100% renewable energy.  The  book’s findings are summarized by Sven Teske of the Institute for Sustainable Futures, University of Technology Sydney, in “Here’s how a 100% renewable energy future can create jobs and even save the gas industry”,  which appeared in The Conversation (Jan. 23). That article states: “The world can limit global warming to 1.5℃ and move to 100% renewable energy while still preserving a role for the gas industry, and without relying on technological fixes such as carbon capture and storage, according to our new analysis.” The scenario is built on complex modelling – The One Earth Climate Model  – and foresees a gradual transition from gas to hydrogen energy, so that “by 2050 there would be 46.3 million jobs in the global energy sector – 16.4 million more than under existing forecasts….  Our analysis also investigated the specific occupations that will be required for a renewables-based energy industry. The global number of jobs would increase across all of these occupations between 2015 and 2025, with the exception of metal trades which would decline by 2%. ”

The article summarizes a book with a daunting title:  Achieving the Paris Climate Agreement Goals: Global and Regional 100% Renewable Energy Scenarios with Non-energy GHG Pathways for +1.5°C and +2°C . It is the culmination of a two-year scientific collaboration with 17 scientists at the University of Technology Sydney (UTS), two institutes at the German Aerospace Center (DLR), and the University of Melbourne’s Climate & Energy College, with funding provided by the Leonard DiCaprio Foundation and the German Greenpeace Foundation.   It was published in January 2019 by Springer as an Open Access book , meaning it is free to download the entire book or individual chapters without violating copyright.  Of special interest:  Chapter 9,  Trajectories for a Just Transition of the Fossil Fuel Industry , which provides historical production data for coal, oil and gas production, discusses phase-out pathways for each, and concludes with a discussion of the need “to shift the current political debate about coal, oil and gas which is focused on security of supply and price security towards an open debate about an orderly withdrawal from coal, oil and gas extraction industries.”

The data presented in Chapter 9 form the foundation of Chapter 10,  Just Transition: Employment Projections for the 2.0 °C and 1.5 °C Scenarios . This consists of quantitative analysis, ( the overall number of jobs in renewable and fossil fuel industries) and occupational analysis – which looks into specific job categories required for the solar and wind sector, and the oil, gas, and coal industry. The chapter provides projections for jobs in construction, manufacturing, operations and maintenance (O&M), and fuel and heat supply across 12 technologies and 10 world regions. The conclusion:  “Under both the 1.5 °C and 2.0 °C Scenarios, the renewable energy transition is projected to increase employment. Importantly, this analysis has reviewed the locations and types of occupations and found that the jobs created in wind and solar PV alone are enough to replace the jobs lost in the fossil fuel industry across all occupation types. Further research is required to identify the training needs and supportive policies needed to ensure a just transition for all employment groups.”

The Fossil fuel industry in Alberta: public opinion, and mapping ownership

Parkland provincesapart_coverIn Provinces Apart? Comparing Citizen Views in Alberta and British Columbia,  released by the Parkland Institute on October 25, the authors re-visit the data from a survey conducted in February – March 2017, and conclude that what differences exist between citizens of Alberta and British Columbia are attributable more to their political self-identification than to their province, age, or educational status. While the Trans Mountain Pipeline expansion was certainly an active issue at the time, the survey pre-dated the bitter political battle and subsequent media attention which ensued from the federal government’s purchase of the project, and the Court decision which suspended construction. After a brief review the political events of the most recent Trans Mountain controversy, the authors conclude “the governing and opposition parties in both provinces have exacerbated this partisan divide.”

In those calmer days when the survey was conducted, citizens’ views on political influence, the fossil fuel industry, climate change, and the role of protests in a democracy were not as divergent as stereotypes tell us.   Findings of particular interest: 53% of respondents in Alberta and  69% in B.C. agreed that “we need to move away from using fossil fuels;” 76% in Alberta and 68% in B.C. thought the petroleum industry has too much influence over governments, (fewer than one-third said the same about either environmentalists, labour unions or Indigenous groups).

Parkland 2018 who_owns_fossil fuel coverThe Parkland Institute also published Who Owns Canada’s Fossil-Fuel Sector? Mapping the Network of Ownership & Control   in October, as part of the Corporate Mapping Project, in partnership with the Canadian Centre for Policy Alternatives B.C. and Saskatchewan, and the University of Victoria.  The analysis covers the period from 2010 to 2015, and demonstrates that the production, ownership and control of the fossil fuel industry is highly concentrated: “The top 25 owners together account for more than 40 per cent of overall revenues during this period.”  At 16%, foreign corporations are the largest type of majority owners (led by ExxonMobil) ; asset managers and investment funds are the 2nd largest; banks and life insurers are the third-largest type of owner (approximately 12% of revenues), with the big five Canadian banks (RBC, TD, Scotiabank, BMO and CIBC) among the top investors. The federal Canadian government, combined with provincial governments, own 2%.  The report provides a wealth of information, including names and ranks of specific companies in the network of ownership and control, points out the importance of divestment campaigns, and “identifies the need to shift from fossil-fuel oligarchy to energy democracy, in which control of economic decisions shifts to people and communities, such as through public ownership of renewables and much greater democratic participation in energy policy.”

For more insight into Alberta and its energy economy, the Parkland Institute is hosting a conference, Alberta 2019: Forces of Change   from November 16 – 18. Presentations include: Opening Keynote, “In the Eye of the Storm”, by Lynne Fernandez (Errol Black Chair in Labour Issues, Canadian Centre for Policy Alternatives- Manitoba); “The Alberta Economy in Context” by Angella MacEwen; “Just Transitions in the Belly of the Beast” by Emily Eaton ( University of Regina); and “Boom, Bust, and Consolidation: Corporate Restructuring in the Alberta Oil Sands” by Ian Hussey (Research Manager at Parkland Institute).

bluegreen alberta 2018Also from Alberta:  the 2018 event from BlueGreen Canada,  Just Transition and Good Jobs for Alberta 2018 was held in Edmonton on October 22 and 23, with active participation and sponsorship of USW, Unifor, and the Alberta Federation of Labour.  This is the third annual event –  summaries from 2017  and 2016  are here.