Two new reports call for end to subsidies and phase-out of Canada’s oil and gas industry

Two new reports expose Canada’s continuing financial support of the fossil fuel industry and call for a phase-out. These appeared in the same week as the federal government reported Canada’s latest National Inventory of Emissions to the United Nations’ UNFCC, showing that the oil and gas industry is the top source of carbon emissions in Canada.

The first report, by Environmental Defence, is Paying Polluters: Federal Financial Support to Oil and Gas in 2020 , released on April 15. It estimates that the government has provided or promised at least $18 billion to the oil and gas sector in 2020 alone, including  $3.28 billion in direct subsidy programs and $13.47 billion in public financing. Paying Polluters decries the lack of transparency – especially for funding through Export Development Canada  – but nevertheless attempts to list the tax subsidies and direct spending programs, in an Appendix at the end of the report. In addition to obvious subsidies, the tally includes loans for pipeline construction, research into new technologies for cleaner processes, job subsidies for reclamation of oil wells, and even policing costs for pipeline construction – think $13 million taxpayer dollars paid to the Royal Canadian Mounted Police to protect the construction site of the Coastal GasLink pipeline.

Environmental Defence concludes with five recommendations, including a call for greater transparency, and for “a roadmap to achieve Canada’s commitment to phase out inefficient fossil fuel subsidies before 2025, and shift these investments and public finance towards supporting a path to resilient, equitable zero-carbon societies.” It should be noted that the government first pledged to phase out these subsidies in 2009. The report is summarized, with reactions, by Sarah Cox in The Narwhal, on April 16.  

A second report, Correcting Canada’s “One-eye shut” Climate Policy, was released on April 16 by the Cascade Institute. It summarizes Canada’s history of fossil fuel production, and refutes those who argue that we are a small country whose emissions don’t compare to those of China or the U.S. Calling on Canada to accept its global responsibility, the authors state that “Canada’s 2021-2050 oil and gas production would exhaust about 16 percent of the world’s remaining carbon budget. Canada is indeed a “carbon bomb” of global significance.”  This is the first of many hard-hitting, frank statements in the report, including a highly critical discussion of the “fool’s gambit” of hydrogen production, and an assessment that “A highly resourced and well-organized “regime of obstruction” has developed in Canada to block effective climate action and ensure increased fossil fuel extraction.”

Correcting Canada’s “One-eye shut” Climate Policy references the Environmental Defence  Paying Polluters report, agreeing with the call for a phase-out of government support and subsidies. It also offers more information about subsidies – for example, an estimate that the provincial supports, including royalty credits, constitute an additional estimated $4.2 billion a year. Other less-than-obvious examples of support for oil and gas:  subsidies that encourage fossil fuel consumption, like aviation or mobility investments,  and over $250 million  directed to four oil sands major companies under Canada’s Emergency Wage Subsidy during Covid-19.  The report states that Imperial Oil alone received $120 million in wage support while concurrently issuing $320 million in dividends. Yet on the issue of oil and gas jobs, the authors state that in 2019, the oil and gas sector represented just 1 percent of direct employment in Canada, and 5.5 percent in Alberta. “To save costs, the industry has aggressively cut jobs, by 23 percent over the 2014 to 2019 period, even as oil and gas production increased by 24 percent, reaching record highs, over that same period.”

The One-Eye Shut report goes further, offering specific policy options within the federal jurisdiction to phase out the industry, including: “prohibiting the leasing of federal lands and waters for fossil fuel production and infrastructure; implementing a “climate test” on all new fossil fuel projects and removing federal impact review exemptions; canceling the Trans Mountain expansion pipeline; divesting federal public investment funds from fossil fuel production; and removing federal subsidies and public financing that supports fossil fuel exploration, production, or transportation, including federal funding for technologies that delay a transition away from oil and gas.”

Correcting Canada’s “One-eye shut” Climate Policy: Meeting Canada’s climate commitments requires ending supports for, and beginning a gradual phase out of, oil and gas production  is a Technical Paper written by University of Waterloo professor Angela Carter and PhD. Student Truzaar Dordi, and published by the Cascade Institute.   Participating Institutions include the Corporate Mapping Project, University of Waterloo, Royal Roads University, and the McConnell Foundation.

Canadian Energy Centre: promoting the message that “Canadian oil and natural gas can make this country and the world better”

alberta energy war roomOn December 11, the Alberta government of Jason Kenney launched its “rapid-response war room” – deceptively called the Canadian Energy Centre –  using $30 million to argue for the benefits of the oil and gas industry and attack any criticism as “misinformation”. By January 6, in an article in the Edmonton Journal, the provincial NDP party reviews the agency’s performance to date and calls for it to be shut down.   Chris Turner also describes the inept launch of the CEC in an Opinion piece in the National Observer, calling it  a “$30 million bonfire”, and the criticism reaches its peak in “The Silly, Scary Truth about Alberta’s New Ministry of Truth” by Andrew Nikoforuk in The Tyee (Jan. 1) .

Despite the ridicule and criticism it has earned, the publicly-funded Canadian Energy Centre continues to post supportive, good news stories about Teck’s Frontier oil sands mine, the Trans Mountain pipeline, Enbridge Line 3,  Coastal GasLink, and more – using its  Twitter account  with almost 5,000 followers, Facebook,  and its web site . Readers should be aware that in an unguarded moment in an interview with Global News, CEO Tom Olsen explained: “We are not about attacking, we are about disproving true facts.”

Update: National Energy Board suspends Energy East hearings, Regulatory review process underway

On September 9, public outcry about  the NEB “Charest Affair” became too strong to resist, and the NEB announced  that the Energy East hearings are adjourned, that all three panelists have voluntarily recused themselves, and the hearings will be reconvened once a new panel can be constituted.  In addition, the the Chair and Vice-Chair are recusing themselves  from administrative functions related to the Energy East process, and will not be involved in the selection of the new panel.   For a recap of this unexpected turn of events,  and the series of investigative reports which led to the exposure of the entire “Charest Affair” , go to the National Observer.  See also the Environmental Defence blog (Sept 9)    and the Energy Mix coverage here and here.

In mid-summer, WCR  wrote:  “Canada’s National Energy Board was served a legal notice on August 11, the latest fall-out from news reports in July which revealed  that Jean Charest, former Premier of Quebec and a paid consultant to TransCanada at the time, met privately with NEB Board members to discuss the Energy East pipeline proposal. The panelists met privately with other registered intervenors, including the Board of Trade of Metropolitan Montreal  and Équiterre – a Quebec-based environmental group, despite NEB’s own rules that require it to review projects in public, keeping a full record of discussions, and to use a fair and transparent process.  The revelations would not have come to light without the digging of a National Observer reporter and his Freedom of Information requests;  the NEB has now apologized for the meetings and released some records and emails.  According to a series of reports in the Globe and Mail in March 2016 (here  and here)  Jean Charest has also been investigated for his attempts to contact the Prime Minister’s Office about Energy East, but was cleared of breaking lobbying rules in March.

The NEB officials who conducted the “off-the-record”  meetings  are now panelists on the NEB hearings on Energy East,  currently underway in New Brunswick . The legal letter  sent on August 11 demands that the Energy East hearings be suspended; a new panel be struck  to conduct hearings into the private meetings; and two senior members of the NEB ( the Chair and Vice-Chair) who both participated in the controversial meetings, must be excluded from any duties related to Energy East during the course of the investigation . The legal letter was sent on behalf of two Quebec advocacy groups: Stratégie Énergétiques and the Association Québécoise de la Lutte contre la Pollution Atmosphérique (AQPLA).

Reaction to the controversy is summarized in  “Charest pipeline controversy flares as May calls for resignation from federal panel”   in the National Observer (August 8).  And Chantal Hebert sums it all up succinctly in “National Energy Board’s credibility as an independent agency at stake: Hébert”  in the Toronto Star, (August 11). To date, the federal Minister of the Environment and Climate Change hasn’t addressed the NEB controversy directly, but urged Canadians to have confidence in the system during a news conference in Halifax in August.

In September, environmental groups, including Greenpeace Canada, the David Suzuki Foundation, the Association québécoise de lutte contre la pollution atmosphérique, Nature Québec, and the Council of Canadians sent a letter to the Minister of Natural Resources,   demanding a suspension of hearings and an investigation into the NEB. (See a summary at the National Observer ) .

The National Energy Board controversy is part of the poisoned chalice passed down from the Stephen Harper government, which the current Liberal government is attempting to deal with through regulatory review.  In June,  the federal government announced   a comprehensive review of environmental and regulatory processes – including “modernizing” the National Energy Board, and restoring protections in the Fisheries Act.  On August 15, a second announcement  described the creation of a four-member Expert Panel to undertake the review of federal environmental assessment processes, and stated that public consultation would begin in September. The Terms of Reference for the Panel are here   ; the Review website is here.

In anticipation of the Review, the West Coast Environmental Law Research Foundation convened a Summit of Experts in May 2016, and in August, published an Executive Summary of the proceedings, setting out twelve “pillars” of a next-generation environmental assessment,  based on the key principles discussed.  Amongst the pillars: a call for recognition of the rights of Indigenous people, improved consultation and information flow to the public, and the consideration of the impact on Canada’s GHG reduction targets as agreed to in the Paris agreement.

Mapping the power of the Oil and Gas Industry in Canada

The Canadian Centre for Policy Alternatives (B.C.) announced a new initiative, funded by a $2.5 million partnership grant from the Social Sciences and Humanities Research Council of Canada on November 12, 2015.  Mapping the Power of the Carbon-Extractive Corporate Resource Sector will bring together “researchers, civil society organizations, and Indigenous participants to study the oil, gas and coal industries in British Columbia, Alberta and Saskatchewan.” The goal of the 6-year project is to identify the major corporate interests in the fossil fuel sector, and uncover their influence in policy decisions.

 

Was the Oil and Gas Lobby Behind Bill C-38?

A report released in December 2013 by ForestEthics alleges that recent changes to Canada’s Environmental Assessment Act under Bill C-38 were drawn from a report from the Energy Policy Institute (EPIC), an organization whose members include all the major oil and gas companies. EPIC’s recommendations, written in August 2012 but only recently uncovered, included eliminating external costs including climate change, greenhouse gas emissions, and upstream and downstream effects from energy project analysis, completing assessments early and only asking for details later, and excluding effects that are common to other projects. Who Writes the Rules? A Report on Oil Industry Influence, Government Laws and the Corrosion of Public Process asserts that Bill C-38 violates the public right to voice opinions during project review processes. The bill granted the National Energy Board (NEB) the authority to select hearing participants from those who submitted a newly-required nine-page application. Further, all concerns regarding external costs, such as downstream health effects, can no longer be included in project analysis.

Similar concerns were voiced in a December 2012 report from the Polaris Institute, which said federal cabinet ministers met six major oil industry players 53 times during the year Bill-38 was being developed. During the same period, a minister met an environmental group only once.

Read the backgrounder for Who Writes the Rules? A Report on Oil Industry Influence, Government Laws and the Corrosion of Public Process at:  http://www.forestethics.org//sites/forestethics.huang.radicaldesigns.org/files/ForestEthicsAdvocacy_Who-Writes-The-Rules-BACKGROUNDER.pdf, and the full report at: http://forestethics.org/sites/forestethics.huang.radicaldesigns.org/files/Who_writes_the_rules.pdf.

Big Oil’s Oily Grasp (2012) by the Polaris Institute is available at: http://polarisinstitute.org/bigoilsoilygrasp.