Are there lessons for Newfoundland in a Just Transition strategy for the U.K. Offshore oil industry?

sea-change-cover-212x300Sea Change: Climate Emergency, Jobs and Managing the Phase-Out of UK Oil and Gas Extraction was released on May 15 by Oil Change International, in partnership with Platform and Friends of the Earth Scotland.  The press release summary is here . The report examines the offshore oil and gas industry in the U.K., with special attention to the transition for workers and communities currently dependent on oil  – making it highly relevant to Canadians, especially Newfoundlanders.   Sea Change argues that  with the right transition policies, clean industries could create more than three jobs for every North Sea oil job at risk, which can enable an “equivalent job guarantee” for every oil worker.

The report contrasts two pathways available for the U.K. and Scotland to stay within Paris climate limits:   1. Deferred collapse, in which the countries “continue to pursue maximum extraction by subsidising companies and encouraging them to shed workers, until worsening climate impacts force rapid action to cut emissions globally; the UK oil industry collapses, pushing many workers out of work in a short space of time.” Or  2. Managed transition: in which countries “stop approving and licensing new oil and gas projects, begin a phase-out of extraction and a Just Transition for workers and communities, negotiated with trade unions and local leaders, and in line with climate change goals, while building quality jobs in a clean energy economy.”

To achieve the clearly superior “managed transition” pathway, the report recommends that the U.K. and Scottish Governments:

  • Stop issuing licenses and permits for new oil and gas exploration and development, and revoke undeveloped licenses;
  • Rapidly phase out all subsidies for oil and gas extraction, including tax breaks, and redirect them to fund a Just Transition;
  • Enable rapid building of the clean energy industry through fiscal and policy support to at least the extent they have provided to the oil industry, including inward investment in affected regions and communities;
  • Open formal consultations with trade unions to develop and implement a Just Transition strategy for oil-dependent regions and communities.

offshore oil rigOffshore Oil and Gas in Newfoundland: In Newfoundland, the importance of the offshore oil industry is evidenced by the fact that a  snap election was called shortly after the province reached agreement with the federal government on royalty payments on April 1.  The two governments announced agreement on  a “renewed Atlantic Accord”  – including the “Hibernia Dividend Backed Annuity”, valued at $2.5 billion for the province, according to a CBC report . This is new money that comes from Ottawa’s 8.5 per cent stake in the Hibernia offshore project, and will be paid out in annual installments over 38 years. According to the Q1 2019 Company Benefits Report ,   Hibernia operations employ 1,458 workers, of which 90.8% are Newfoundlanders.

The federal and provincial governments are also closely intertwined in a new consultation process which was launched for the Regional Assessment of Offshore Oil and Gas Exploratory Drilling East of Newfoundland and Labrador  in April, along with the Canada-Newfoundland and Labrador Offshore Petroleum Board. The provincial Minister is quoted in the federal press release:  “Our government is committed to working collaboratively with our federal partners to ensure responsible development of our oil and gas industry. The Regional Assessment is an important step towards exempting routine, low impact activities, such as exploration wells, where potential impacts and standard mitigations are well known, from federal assessment. This is another step we are taking to achieve the vision we set out in Advance 2030 to benefit all Newfoundlanders and Labradorians.”

The Advance 2030 document, released in 2018, is subtitled:  A Plan for growth in the  Newfoundland and Labrador Oil and Gas Industry, and is based on the government’s commitment “to resource development as a key economic driver and to positioning the industry for continued growth.”   In releasing the Advance 2030 report, the government announced some long-term targets, including the direct employment of at least 7,500 people in operations, drilling of over 100 new exploration wells by 2030, and doubling oil production by 2030.  That same Liberal government was returned to power as a minority government on May 16, and compiles news of oil and gas development  here .

 

Newfoundland and Labrador announces its “lax tax” on carbon

offshore oil rigA “ Made-in-Newfoundland and Labrador Approach to Carbon Pricing” was announced and  described in a press release on October 23 , with a carbon tax rate of $20 tonne starting on January 1, 2019.  The details are many, as published here . Exemptions are granted for consumers (e.g. for home heating fuel) , and for industry – specifically “for agriculture, fishing, forestry, offshore and mineral exploration, and methane gases from venting and fugitive emissions in the oil and gas sector.”  These exemptions make sense in light of the province’s Oil and Gas  growth strategy announced in February 2018,  Advance 2030 , which aims for 100 new exploration wells to be drilled by 2030.

Despite the weakness of the provincial plan, it has been accepted by the federal government – thus, Newfoundland will avoid the stricter regime which would have been imposed by the federal backstop plan in 2019.  For a brief overview: “Why the lax tax? Finance minister says Muskrat burden played role in carbon pricing” (CBC) . In depth analysis appears in  “Newfoundland’s carbon tax gives ‘free pass’ to offshore oil industry” in The Narwhal.   (Nov. 9)

Oil workers in Newfoundland training for wind and solar energy jobs

Iron and Earth, the worker-led group which helps oil and gas industry workers transition to clean energy jobs, announced  a Memorandum of Understanding with Beothuk wind-farm-311837_1280Energy   in mid-July 2016.  Beothuk, headquartered in St. John’s, Newfoundland, is proposing to build six offshore wind farms in Atlantic Canada with a combined capacity of  4000+ MW of energy, and estimates that it will create 10 jobs for each MW produced. The MOU is not available online, but is reported to encourage apprenticeships and retraining in wind energy.

On August 8, the Newfoundland and Labrador chapter of Iron and Earth began to crowdfund  for a demonstration greenhouse project: to build a greenhouse incorporating solar and one other site-specific technology (micro-hydro, wind or geothermal) to power, heat and light a greenhouse year-round.  Concurrently, the project will demonstrate a solution to food security issues by powering LED grow lights even in the winter months, and will offer a solar energy course to  increase the region’s renewable energy skill set. Iron and Earth states that Newfoundland has no training programs for renewable energy, and a goal of this project is to retrain oil and gas workers. Bullfrog Power, the leading Canadian green energy provider, has pledged to  match any donations made to the  Greenhouse crowdfunder until the goal is reached; click here for details or to donate.

Fisheries in the News: Collaboration is Moving Newfoundland’s Cod Fishery to Sustainability

The Fishery Improvement Project (FIP) on the southern Newfoundland shore announced on March 13th that it has entered full assessment against the Marine Stewardship Council (MSC) standard for sustainable and well-managed fisheries.

After the collapse of the cod fishery in the 1990’s, this is an historic milestone, and according to World Wildlife Fund Canada (WWF) President David Miller: “It demonstrates that good management and collaboration can lead to the recovery of cod populations – and that struggling fisheries can once again thrive, not only in Atlantic Canada but across the world”. The recovery of the fishery is indeed the result of extensive collaboration and co-operation- led by Icewater Seafoods Inc. and Ocean Choice International, partnering with WWF (formerly World Wildlife Federation) to manage the FIP, with additional financial support from the Newfoundland and Labrador Department of Fisheries and Aquaculture, the Resources Legacy Fund, and High Liner. The Fish, Food and Allied Workers Union (FFAW) and Fisheries and Oceans Canada are also cited as key supporters.

Read the press release at WWF at: http://www.wwf.ca/newsroom/?14901/Newfoundland-cod-fishery-announces-milestone-sustainability-assessment. Read about the FFAW Stewardship Program at: http://www.ffaw.nf.ca/?Content=Science_Research/Fisheries_Stewardship_Program, and an overview of the WWF Conservation Program in Atlantic Canada at: http://www.wwf.ca/conservation/oceans/atlantic_canada/.

Newfoundland says No to Fracking, for now

The Newfoundland Minister of Natural Resources announced on November 4th that the government “will not be accepting applications for onshore and onshore to offshore petroleum exploration using hydraulic fracturing”. The suspension will allow the government time to review fracking rules in other jurisdictions, fully assess potential environmental impacts, and allow for public comments. See the press release at: http://www.releases.gov.nl.ca/releases/2013/nr/1104n06.htm.