Mister renewables

 By Andrew Burger

Following nine years of Conservative Party rule, a sea change in energy and climate change policy is in the air. Voters elected Liberal Party leader Justin Trudeau to be Prime Minister this past October while a provincial election in Alberta provided an even greater surprise as the New Democratic Party won the provincial election on a platform of ending coal-powered generation and adding more renewables. The surprise political wins have raised expectations that energy policies more friendly to and supportive of renewables will be instituted. Those hopes showed signs of materializing following the UN climate change conference in Paris, at the conclusion of which some 195 national governments signed a historic accord that includes pledges to significantly reduce greenhouse gas (GHG) emissions and reliance on fossil fuels. Can Canada’s New PM Succeed in Bridging the Energy-Climate Divide…?

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Akin to its neighbor to the south, Canada takes on something of a ¨Jekyll and Hyde¨ aspect when it comes to energy and climate change. That’s a generalization, but a valid and useful one in that it conveys a sense of the central role mining and fossil-fuel energy have played in Canadian politics, as well in its economy and across society.

Campaign promises to take stronger climate change actions and spur investment in and deployment of renewable energy and clean technology helped propel the Liberal Party and Justin Trudeau – son of former Prime Minister (PM) Pierre Trudeau – to an unexpected victory in national elections last October.

It has only been around two months since he was sworn in as Canada’s second youngest PM, but Trudeau and Cabinet leaders have shown they’re intent on realizing these campaign promises. They also have shown signs that they’re willing to reach out to all stakeholders and take an open, inclusive approach in crafting what will be Canada’s first national energy strategy.

Forging Canada’s First National Energy Strategy

Trudeau is expected to present his administration’s National Energy Strategy (NES) to the nation in March. That should offer another early, but solid and far reaching, indicator regarding the new federal government’s capacity to build political bridges and forge an integrated climate-energy policy framework capable of delivering the reductions in carbon and GHG emissions promised in the historic UNFCCC accord signed by Canada and some 195 nations in Paris this past December.

As is the case in the U.S., climate change and energy are very much partisan political issues in Canada. Whether for or opposed to fossil fuels or distributed renewable energy and smart grids, which policy stance a Canadian considers Jekyll and which Hyde correlates well with his or her political party affiliation.

A recent study of national opinion regarding climate change carried out by the Environics Institute and David Suzuki Foundation lends legitimacy and support to Trudeau’s expressed intention of developing an integrated climate-energy policy framework. According to Focus Canada 2015 , approximately 6 in 10 Canadians (61%) said they are in favor of government taking stronger climate change action, even if it means sacrificing something in the way of economic growth.

Tracking national opinion regarding climate change is a long-term research project for the Suzuki Foundation, Director of Science & Policy Ian Bruce explained in an interview. ¨Many surveys show even greater support, but we wanted to test just how deep was Canadians’ commitment and support,¨ he said.

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Growing Confidence in Renewable Energy and Cleantech

It follows that many of those Canadians also lean strongly towards national and provincial energy policy stances that favor promotion of distributed renewable energy and clean technology as opposed to traditional fossil fuel energy resources.

¨There’s a strong sentiment in Canada that renewable energy and cleantech is an effective solution, and a strong belief that we can shift to cleaner, more efficient sources,¨ Bruce continued.

Moreover, Canadians have become more optimistic regarding renewable energy and cleantech’s role and potential to realize such a transformation. ¨Nearly 3/4 believe renewables and cleantech can meet Canada’s energy needs today,¨ Bruce added. ¨Where there is a little bit of concern is around politics: Canadians see there are solutions, but they’re concerned about government playing politics with the issue.¨

Those pro climate and renewable energy sentiments were borne out in December’s provincial election in Alberta, home to the massive Athabasca Oil Sands. Canadian and multinational oil and gas majors invested more than C$274 billion ($200 billion) from 2000-2013 to develop Alberta’s oil sands into a source of unconventional petroleum fuels and liquids.

A New Democratic Party (NDP) victory this past December brought an end to four decades of Progressive Conservative Party leadership in Alberta. Among the first actions the new NDP-led government took was to raise the required rate of greenhouse gas (GHG) reductions and double the costs of not achieving targets specified in legislation.


Behind the Energy Climate 8-Ball

The balance between fossil fuels and clean energy development that Trudeau and the federal government’s Cabinet Climate Committee strike in producing Canada’s first-ever National Energy Strategy remains to be seen. What has become clear is that Canada has a long way to go if it is to even have a chance of reducing GHG emissions to the extent pledged in the UNFCCC climate accord.

The latest report on national GHG emissions from Environment and Climate Change Canada projects that Canada will pump the equivalent of 768 megatons of CO2 into the atmosphere by 2020, and 815 megatons by 2030. The projections, moreover, do not include forestry sector emissions.

In sum, the researchers project that Canada’s CO2 emissions will increase nearly 17% by 2030. That stands in stark contrast to its UNFCCC pledge, which targets a 30% decline from 2005 levels.

One political commentator pointed out a sign that Trudeau may be developing a national energy policy framework akin to U.S. President Obama’s ¨all of the above¨ energy strategy. Obama’s approach has helped spur growth in U.S. oil and gas investment and production while at the same time defusing opponents’ ¨pushback¨ by taking executive actions to reduce GHG emissions and foster growth in renewable energy and cleantech.

Perhaps the most promising prospect in an otherwise gloomy outlook for Canada's oil and gas sector businesses, employees and investors are cleantech innovations...

Climate Change and Canada’s Oil & Gas Industry

The example cited is Trudeau advocating in support of TransCanada’s proposed 4,600-km (2,858-mile), C$16 billion Energy East pipeline, which would transport oil sands petroleum all the way from Alberta to New Brunswick and then on to international markets.

The dramatic crash in oil prices triggered by OPEC’s strategic shift to manage supply and demand so as to gain market share as opposed to maximizing revenues has taken a heavy toll on Canada’s oil and gas industry. That’s especially the case in Alberta, where synthetic crude oil and bitumen royalties accounted for about C$5.2 billion ($3.8 billion), almost 55%, of Alberta’s C$9.6 billion ($7 billion) non-renewable resource revenue.

In the context of energy and climate change, ¨a key concern for the oil and gas sector is market access, in the form of moving production out of western Canada into the U.S. or on to other jurisdictions. That includes liquefied natural gas (LNG), oil and oil products,¨ Alan Fogwill, president and CEO of the Canadian Energy Research Institute, explained in an interview.

Investment in new oil and gas project development in Alberta has been cut nearly in half since the oil price crash began. That has led to thousands of layoffs and substantial investor losses, Fogwill pointed out during a recent CBC News Calgary interview.

Canada’s leading oil and gas companies have and continue to propose building new pipelines, such as Keystone XL and Energy East, as the safest and least emissions-intensive means of transporting Alberta oil and natural gas within and outside Canada. They’ve been met by staunch opposition from environmentalists and other public interest groups, including local indigenous communities.

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Therein Lies the Rub

¨The real question is whether or not movements Alberta and the federal government have made within the last six months regarding discussions around climate change offer a more constructive dialogue regarding the issue of market access,¨ Fogwill told Eniday.

Perhaps the most promising prospect in an otherwise gloomy outlook for Canada’s oil and gas sector businesses, employees and investors are cleantech innovations, he pointed out.

¨I don’t subscribe to the idea that taking stronger actions on climate change would necessarily constrain production – in fact, that probably would not be the case… There’s definitely a need to reduce the industry’s carbon footprint, but the oil and gas industry has a lot of options available, including more efficient technologies and production processes.

¨It will require a more detailed consideration of production costs and how companies can improve their carbon footprint, but we produced a paper last August showing carbon emissions could be significantly reduced by making use of new environmental technology that not only has the ability to reduce emissions, but overall costs as well. It’s a situation where oil and gas companies can improve their environmental and financial performance.¨

And therein lies hope that Canada’s new PM and Liberal Party-led government can strike a deal and build a national consensus in support of Canada’s first National Energy Strategy, one that establishes a foundation that would lead to greater energy access and security, as well enable Canada to fulfill its UNFCCC pledge and contribute to global GHG emissions reductions efforts.

about the author
Andrew Burger
Andrew Burger has been reporting on energy, technology, political economy, climate and the environment for a variety of online media properties for over five years.