President Biden’s Executive Orders and Keystone XL cancellation – what impact on Canada?

Incoming U.S. President Biden exceeded expectations with the climate change initiatives announced in week 1 of his term, and many have important repercussions for Canada.  The most obvious came on Day 1, January 20, with an Executive Order cancelling the Keystone XL pipeline and taking the U.S. back into the Paris Agreement.  Also of potential impact for the Canadian clean tech and auto industries – the Buy American policies outlined in Executive Order on Ensuring the Future Is Made in All of America by All of America’s Workers (Jan. 25). On January 27 ( “Climate Day ”), the Executive Order on Tackling the Climate Crisis at home and abroad (explained in this Fact Sheet ) announced a further series of initiatives, including a pause on oil and gas leases on federal lands, a goal to convert the federal government’s vehicle fleet to electric vehicles, and initiatives towards environmental justice and science-based policies. Essential to the “whole of government” approach, the Executive Order establishes the White House Office of Domestic Climate Policy to coordinate policies, and a National Climate Task Force composed of leaders from across 21 federal agencies and departments. It also establishes the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, “to be co-chaired by the National Climate Advisor and the Director of the National Economic Council, and directs federal agencies to coordinate investments and other efforts to assist coal, oil and natural gas, and power plant communities.”    

The New York Times summarized the Jan. 27 Orders as “a  sweeping series of executive actions …. while casting the moves as much about job creation as the climate crisis.” A sampling of resulting summaries and reactions: ‘We Need to Be Bold,’ Biden Says, Taking the First Steps in a Major Shift in Climate Policy” in Inside Climate News (Jan. 28); “Fossils ‘stunned’, ‘aghast’ after Biden pauses new oil and gas leases” in The Energy Mix (Feb. 1); “Biden’s “all of government” plan for climate, explained” in Vox (updated Jan. 27) ;  “Biden’s Pause of New Federal Oil and Gas Leases May Not Reduce Production, but It Signals a Reckoning With Fossil Fuels”  (Jan. 27) ; “Biden is canceling fossil fuel subsidies. But he can’t end them all” (Grist, Jan. 28);  “Activists See Biden’s Day One Focus on Environmental Justice as a Critical Campaign Promise Kept”  and  “Climate Groups Begin Vying for Power in the Biden Era as Pressure for Unity Fades” (Jan 21) in The Intercept , which outlines the key policy differences between the BlueGreen Alliance (which includes the Service Employees International Union, the American Federation of Teachers, and the United Steelworkers in the U.S.) and  the Climate Justice Alliance, a national coalition of environmental justice groups.

The Narwhal provides an excellent overview of the important issues for Canada in “Biden has hit the ground running on climate and environmental justice. How will Canada respond?

Focus: Cancelling the Keystone XL Pipeline

The January 20 Executive Order halting the Keystone XL pipeline construction was meant to be a highly symbolic break with the previous administration’s policies, as described by Bill McKibben in the New Yorker as “Joe Biden’s cancellation of the Keystone Pipeline is a landmark in the climate fight” . Inside Climate News wrote “Biden Cancels Keystone XL, Halts Drilling in Arctic Refuge on Day One, Signaling a Larger Shift Away From Fossil Fuels” (Jan. 21).       

In Canada, the Keystone XL cancellation set off a torrent of reactions – with  Alberta’s Premier immediately calling for trade retaliation  – summarized in “‘Gut punch’: Alberta premier blasts Biden on revoked Keystone XL permit” (National Observer, Jan. 20) . The federal government held an Emergency Debate on Keystone on January 25, the first day the House of Commons re-convened after Christmas break. Environmental groups, along with social justice groups, First Nations, and the B.C. Government Employees Union, sent an Open Letter to Prime Minister Trudeau and all cabinet ministers on January 26, approving of the Keystone cancellation and stating: “Canada must follow Biden’s lead on Keystone XL and cancel TMX because it directly conflicts with the federal government recently announced climate plan and it does not have permission or consent from affected Indigenous Nations.”  An opposite viewpoint was reported in  “Keystone XL denial will hurt communities, Indigenous business coalition leader says” (National Observer, Jan. 22). Consistent with the past policies of the construction unions in the U.S. and Canada, Canada’s Building Trades Unions issued a press release expressing deep disappointment in lost jobs as a result of the decision – as did their U.S. counterpart the North American Building Trades Union (NABTU) . (The discord amongst unions over pipeline construction has been long-standing and well documented – for example, in Contested Futures: Labor after Keystone XL by Sean Sweeney ( New Labor Forum, 2016.)  

What next for Canada, now that Keystone XL has been cancelled?

CBC reports  “Trudeau government looks to continental energy strategy in wake of Keystone cancellation” (Jan. 27), which summarizes the unimpressive history of international energy initiatives but strikes an optimistic note because of the new Biden administration.  Eric Grenier summarizes the political and public opinion landscape and concludes that “For Trudeau, there’s no political reason to fight for Keystone XL” , and Aaron Wherry expands on that theme in “How political symbolism brought down Keystone XL” (Jan 23). In “Cenovus unveils capital spending plan, confirms up to 2,150 layoffs still targeted” (Jan. 29)  the CEO of Cenovus states that while the Keystone XL pipeline cancellation was a  “tragedy” for the industry, it wouldn’t affect his company’s ability to move oil and that Biden’s pause on oil and gas leasing, “is probably good for the Canadian oilpatch” . The Cenovus layoffs announced are not related to Biden’s policies but come as a result of its takeover of Husky Energy- Cenovus had already announced it would cut 20 to 25 per cent of its combined employee and contractor workforce (approx. 1,720 and 2,150 workers) in October 2020. 

Warren Mabee wrote in The Conversation Canada (Jan.21) “Biden’s Keystone XL death sentence requires Canada’s oil sector to innovate” – (republished in The Narwhal here ) arguing that Canada and Alberta “need to decide if more pipeline capacity is really needed” and “The future of Canada’s oil sector may not be in volume, but in value” – for example, high value-added products such as plastics, rubber and chemicals.   But this is Canada, so pipeline battles will continue: “With Keystone XL cancelled, all eyes turn to Trans Mountain expansion battle” (Ricochet , Jan. 27) and “The cancellation of Keystone XL raises the stakes for Trans Mountain (Globe and Mail Opinion piece, Jan. 26) . David Hughes has written, most recently in October 2020, that the Trans Mountain pipeline capacity is not needed, and on December 8 2020, the Parliamentary Budget Office released a report with the same conclusion. An excellent overview on the status of the Trans Mountain issue appears from the West Coast Environmental Law, and the Dogwood Institute maintains an online petition against TMX here.

No new pipeline construction needed in Canada, and domestic fossil fuel consumption peaked in 2019

The key takeaway from a new flagship government report is that no new pipeline construction is needed in Canada, and  the current pipelines under construction – the TransMountain Expansion, Keystone XL, and Enbridge Line 3 Replacement- are sufficient to accommodate all future crude oil production.  The  new report, Canada’s Energy Future 2020: Energy Supply and Demand Projections to 2050, is the latest annual report by the Canada Energy Regulator CER- (formerly the National Energy Board) and discusses the future of all energy commodities under two scenarios – a Reference case and an Evolving Scenario, which includes a carbon price of $75 per tonne in 2040 and $125 per tonne in 2050.

Under the Evolving Scenario of increased policy intervention, Canada’s domestic fossil fuel consumption peaked in 2019 and by 2050, it will be 35% lower than the 2019 level. However, the report states that even under the Evolving Scenario, fossil fuel consumption is forecast to make up over 60% of Canada’s fuel mix in 2050.  It is worth noting that these CER reports have been criticized in the past for overestimating fossil fuel demand – for example, by the Pembina Institute in 2019, in “Why Canada’s Energy Future report leads us astray” . In 2020, Pembina calls for changes to the modelling assumptions for future reports, saying “the scenarios modelled in the report are still not aligned with commitments set out in the Canadian Net-Zero Emissions Accountability Act. This model of Canada’s energy future is not consistent with the future that Canada has committed to in the Paris Agreement.” Further, it points out “Canada’s Energy Future 2020 report does not reflect the range of recent scenarios for global oil demand, such as those recently released by the International Energy Agency and BP, where demand is predicted to fall by 50 to 75 per cent over the next 20 to 30 years in order to achieve net-zero emissions.”

Other reactions to the CER report focus on the forecast of declining need for pipelines , summarized in  “No Future Need for Trans Mountain, Keystone XL Pipelines, Canadian Energy Regulator Report Shows”  (The Energy Mix, Nov. 25), and even echoed in the conservative Financial Post .  Followers of David Hughes will recognize this argument that he has made many times, most recently in Reassessment of Need for the Trans Mountain Pipeline Expansion Project , published by the Canadian Centre for Policy Alternatives at the end of October .

The press release and summary from the Canada Energy Regulator report is here, with data sets and interactive tables here  and an archive of past annual reports here.  Beyond fossil fuel projections, this year’s Report includes a discussion of the transition to a  Net-Zero Emissions energy system, focusing on  personal passenger transportation, oil sands production, and remote and northern communities. It also briefly notes the impact of  the Covid pandemic, stating  “Canadian end-use energy demand will fall by 6% in 2020 compared to 2019, the biggest annual drop since at least 1990. Energy to move people and goods will fall the most due to less travel and increased remote work and learning.” (A report  published by the World Meteorological Office on Nov. 23 provides preliminary estimates of a reduction in the annual global emission between 4.2% and 7.5% because of Covid).

 

 

 

Export Development Canada continues to undermine climate change goals, using Covid-19 recovery to fund Coastal GasLink pipeline

Reforming Export Development Canada:  Climate-Related Risk Management and the Low Carbon Transition  is an important new report released on June 9,  commissioned by advocacy groups Above Ground and Oil Change International.  The report analysis was conducted by consultancy Horizon Advisors, who calculate that the crown corporation Export Development Canada (EDC) has provided roughly $45 billion in support for the oil and gas sector since 2016, compared to $7 billion for clean technology. “These investments not only undermine Canada’s international climate efforts but also increase EDC’s exposure to carbon risks.”  The report recommends that the government amend the Export Development Act to bar EDC from supporting any fossil fuel energy projects, including new fossil fuel infrastructure such as pipelines, and that the agency should “stress-test its investment decisions against Canada’s climate targets.”

The Reforming Export Development Canada report is not the first time EDC has been examined for its fossil-friendly investment strategy  and criticized for undermining Canada’s climate change progress. Oil Change International and Above Ground published  Risking it All: How Export Development Canada’s Support for Fossil Fuels Drives Climate Change in 2018,  which documents investments of more than $10 billion a year to oil and gas between 2012 and 2017 ( twelve times more support than it offered for clean technologies).

Fossil fuel companies cashing in on Covid-19 Recovery Funds in Canada and worldwide

RiskingItAllcoverDianne Saxe, the former Environmental Commissioner of Ontario, cited the 2018 Risking it All report in her April 2020 Opinion piece in the National Observer, reacting to the federal $750 million Emissions Reduction  funding as part of the Covid-19 Recovery stimulus.  Environmental Defence voiced similar suspicions in their April response :  “… hidden inside this new law were changes that will make it easier for Canada’s export credit agency, Export Development Canada, to funnel billions more towards domestic oil and gas operations — without public scrutiny.”

And sure enough, following the recovery stimulus announcement,  in May EDC signed an agreement to loan up to $500 million to Coastal GasLink pipeline  – the same pipeline project which Wet’suwe’ten First Nations had blockaded, causing RCMP arrests which triggered Canada-wide solidarity  protests and crippling rail blockades  in Ontario and Quebec in the winter of 2020.  (And despite objections from the Wet’suwe’ten  Hereditary chiefs, reported in the Toronto Star ). “Meet Export Development Canada , the secretive crown agency financing the big oil bailout” (May 27) is a blog by Environmental Defense Canada, calling  out EDC investments and calling for greater transparency.

Oil Change International and Friends of the Earth U.S. address this ongoing issue Still-Digging-Cover-Image-pdf in  Still Digging: G20 Governments Continue to Finance the Climate Crisis , released on May 27.  From the Oil Change International Press release: “G20 countries have provided at least $77 billion a year in public finance to oil, gas and coal projects since the Paris Climate Agreement was reached. This government-backed support to fossil fuels from export credit agencies, development finance institutions, and multilateral development banks is more than three times what they are providing to clean energy. China, Japan, Canada, and South Korea are the largest providers of public finance to oil, gas, and coal, together making up over two-thirds of the G20 total.” The report is endorsed by Environmental Defense Canada and Climate Action Network Canada , among many others.

From Still Digging, a warning:

“with the health and livelihoods of billions at immediate risk from Covid-19, governments around the world are preparing public spending packages of a magnitude they previously deemed unthinkable.…. The fossil fuel sector was showing long-term signs of systemic decline before Covid-19 and has been quick to seize on this crisis with requests for massive subsidies and bailouts. We cannot afford for the wave of public finance that is being prepared for relief and recovery efforts to prop up the fossil fuel industry as it has in the past. Business as usual would exacerbate the next crisis—the climate crisis—that is already on our doorstep.”

Government gives the go- ahead to Trans Mountain pipeline despite declaring a climate emergency

climate emergencyOn June 18, in a controversial but expected move, the federal cabinet approved the expansion of the Trans Mountain pipeline, which would triple the capacity of the existing pipeline, and allow up to 890,000 barrels per day of bitumen to travel from the Alberta oil sands to a marine terminal in Burnaby, British Columbia.  The approval was described by The Energy Mix as “the height of cynicism” because the House of Commons had only 24 hours previously approved a government resolution declaring a climate emergency.  Although the government put on a positive face by predicting that “shovels will be in the ground” by September, the project still has to satisfy conditions set out by the National Energy Board,  including negotiated approval from First Nations.  As described in  “Why we’ll be talking about the Trans Mountain pipeline for a long while yet” in The Narwhal: “The embattled oilsands pipeline has become a proxy battle, pitting the urgency of the climate crisis against near-term economic concerns”.

A sampling of  Reaction and Analysis:

An Angus Reid poll, Shovels in the Ground was released on June 21.  It reports that 56% of Canadians agree with the government’s  approval of  TMX, compared with 24% who disagree. The primary concerns for Canadians, both those who support and oppose the TMX, are the possibility of a tanker spill due to increased traffic in the Burrard Inlet (68%) and the increased burning of fossil fuels from pipeline expansion (66%).

Canada approves Trans Mountain pipeline expansion for second time”  in the National Observer (June 18).  This general overview of the decision is part of the ongoing Special Report on Trans Mountain by the National Observer.

Trans Mountain approval makes mockery of climate emergency declaration” press release from the Council of Canadians.

“Cognitive Dissonance: Canada declares a national climate emergency and approves a pipeline” by Warren Mabee of Queen’s University  in The Conversation (June 20).

“Trudeau Declared a Climate Crisis, then Backed Trans Mountain Again” in The Tyee (June 18), which summarizes reactions from British Columbia, and states that B.C. will  take its case to the Supreme Court of Canada as it seeks the legal right to regulate the shipment of materials (including oil and gas)  within the province.

“Transmountain  pipeline approval triggers lawsuits leaves fossils unsatisfied”    in The Energy Mix (June 19).

“Business leaders welcome pipeline approval but fear it may not be completed”  in The National Observer. The article states:  “Mark Scholz, CEO of the Canadian Association of Oilwell Drilling Contractors, who said in a statement the pipeline approval is “trivial” and will do little to help a suffering western Canadian drilling sector. Approval doesn’t make up for the federal government’s pursuit of Bills C-69 and C-48, bills reviled by the industry to revamp the regulatory system for resource projects and impose an oil tanker ban on the B.C. coast, he said.”

Minister Morneau in Calgary to talk about the Trans Mountain Expansion project and the future of Canada’s Energy Sector “ (June 19)  a press release that lays out  the government’s best case for Albertans, and states that: “Every dollar the federal government earns from the project will be invested in Canada’s clean energy transition. The Department of Finance estimates that additional corporate tax revenues could be around $500 million per year once the project is online. These funds and any profits earned from the sale of the pipeline will be invested in the clean energy projects that power our homes, businesses and communities for years to come.”

billion-dollar-buyout LaxerA substantial analysis from a different viewpoint, Billion Dollar Buyout: How Canadian taxpayers bought a climate-killing pipeline  was just published by the Council of Canadians. Written by Gordon Laxer, professor emeritus at the University of Alberta, the report summarizes the long history of the Trans Mountain project, with a special interest in how it fits in to the United States Mexico Canada trade agreement (USMCA) and the energy goal of integrating Canadian oil and natural gas into the U.S. market.  Laxer also authored an OpEd in the Toronto Star on June 12, Don’t waste any more money on the Trans Mountain pipeline  .

Not all First Nations Oppose the Trans Mountain pipeline:  The National Observer summarizes First Nations opposition in “As Trans Mountain gets shovels ready for pipeline, First Nations vow to protect territory” (June 19), which  states that the Tsleil-Waututh Nation and Squamish Nation will use “all legal tools” available to challenge the TMX approval.  The Tsleil-Waututh Nation has commissioned an independent environmental assessment and an economic study which estimates that TMX expansion will cost Canada $11.8 billion, in addition to the environmental costs. It also predicts lower demand than the government has anticipated and unused capacity. The 127-page economic study, Public Interest Evaluation of the Trans Mountain Expansion Project is dated June 2019 and was written by Thomas Gunton, a professor at the  School of Resource and Environmental Management at  Simon Fraser University, and by Chris Joseph, a B.C. consultant.

Project Reconciliation  is an Indigenous-led coalition which aims to buy part of the pipeline and direct any profits to a Sovereign Wealth and Reconciliation Fund.  Their press release on June 18 applauds the government’s TMX decision.  A January 2019 article by CBC gives background on the group.  The Indian Resource Council is another group, composed of 134 First Nations bands most of whom are also interested in the economic benefits of  pipelines. CBC describes their meeting in  “More than 100 First Nations could purchase the Trans Mountain expansion pipeline” (Jan. 2019).  More recently, in June, the Iron Coalition  launched – “an Alberta-based Indigenous-driven organization with the sole purpose of achieving ownership in the Trans Mountain Pipeline (TMX).”  Iron Coalition leaders are from the Nakota Sioux Nation, the Papaschase First Nation and the Fort McKay Métis, and state that “all profits generated by Iron Coalition will be directed back to each member community to bring lasting economic benefit to Métis and First Nations in Alberta.”

 

Public opinion polls: on carbon tax, pipelines, and a growing fear of climate change around the world

On February 8, Clean Energy Canada released results from an online survey of 2,500 Canadian adults, conducted by Abacus Data. Across Canada, 35% support a federal carbon tax, 37% say they are open to considering it, and 28% oppose it  – with the highest opposition from Alberta (41%). When told that revenues would be rebated to households (the ford and carbon tax infographicCarbon Incentive Plan),  support climbed by 9 points – and even more in Alberta. Asked if they agreed with  Ontario Premier Doug Ford’s statement that a carbon tax will bring a recession, 64% of Canadians  and 63% of Ontarians disagreed – and when asked a follow-up question asserting that many economists disagree with Premier Ford, 74% of Canadians and 73% of Ontarians stated they would trust the economists over the Premier.

The Angus Reid Institute  has tracked opinion about a carbon tax in Canada since April 2015, and are due to release new survey results in winter 2019 . Their online survey conducted in October 2018 (just after the announcement of the federal Carbon Incentive plan), showed that support for a carbon tax had increased nationally  from 43% in July 2018 to 54% in October.  The leading cause of opposition to the carbon plan is the sense that it is a “tax grab”, followed by the opinion that it will not help reduce emissions. Also notably, “six-in-ten Canadians say they do not trust information about climate change from their provincial government – with  only 24% of Manitobans  trusting their government.  Who do Canadians trust on this issue?  78% trust university scientists; 56% trust “international organizations doing work in this field”.

Angus ReidI can help cc

From Angus Reid Institute, “Duelling realities” poll

Other recent Angus Reid analysis of Canadians’ overall attitudes on climate change was released on November 30 in “Dueling realities? Age, political ideology divide Canadians over cause & threat of climate change”.   Only 9% of Canadians do NOT perceive climate change as a threat, with 55% of 18 to 34-year-olds  said they believe climate change to be a very serious threat.  Yet  a survey  released in January 2019, “Six-in-ten Canadians say lack of new pipeline capacity represents a crisis in this country” details the polarized opinions about oil pipelines, showing that 53% of Canadians surveyed support both the Energy East and TransMountain pipeline projects, and  six-in-ten say the lack of new pipeline capacity constitutes a “crisis”. Opinions are divided by region, ranging from 87% in Alberta and 74% in Saskatchewan seeing a crisis, versus 40% in Quebec.

Opinion in the United States:  Results from the December 2018 national survey, Climate Change in the American Mind ,  reveal that 46% of Americans polled have personally experienced the effects of global warming, and a majority are worried about harm from extreme events in their local area –  including extreme heat (61%), flooding (61%), droughts (58%), and/or water shortages (51%).  This longstanding survey (since 2013) is conducted by the Yale Program on Climate Change Communication and the George Mason University Center for Climate Change Communication. It also updates the results in the series, “Global Warming’s Six Americas” , which categorizes attitudes from  “Alarmed”, to “Concerned”, all the way to “Doubtful” and “Dismissive” –  showing that in December 2018, the “Alarmed” segment is at an all-time high of 29% , while the “Dismissive” and “Doubtful” responses have declined to only 9%.  The full report   also includes responses concerning emotional responses to global warming, perceived risks, and personal and  social engagement – which includes such questions as “How much of an effort do your family and friends make to reduce global warming?”

Australian women are re-considering having children:  A survey released in February by the Australian Conservation Foundation and the  1 Million Women organization reports on climate change attitudes of Australian women, in the lead-up to the country’s federal election in 2019.  Of the 6514 Australian women who responded to the survey between September – October 2018, nearly 90% are extremely concerned about climate change.  Again, concern is highest in the under-30 bracket, where  one in three are so worried about what global warming that they are reconsidering having children.  A four page summary of survey results is here 

Finally, international attitudes are reflected in a survey published in February by Pew Research Center:  “Climate Change Still Seen as the Top Global Threat, but Cyberattacks a Rising Concern”.   This top-level survey of 26 countries shows that climate change was perceived as the most important threat in 13 countries:  including Canada,   Germany, Greece, Hungary, Spain, Sweden, U.K., Australia, South Korea, Kenya, Argentina, Brazil, and Mexico.  In the U.S., the top threat was seen to be cyberattacks from other countries (74%), followed by attacks from ISIS (62%). Global climate change was the third-ranked threat at 59% .