The transition to a low carbon economy started long before anyone heard of COVID 19. According to a 2019 report from Clean Energy Canada, there are already 298,000 Canadians working in the clean energy sector. Yet as a result of the global pandemic, the demand for oil has fallen to 1995 levels. The Canadian Association of Petroleum Producers (CAPP) did not hide the fact they have been been working closely with the Trudeau government to “identify important areas for urgent action to help Canada’s energy sector survive the current economic crisis.”
Energy = Fossil Fuels
From the oil sector’s perspective, and to a certain extent the federal government’s, energy = fossil fuels.
Thus we find that while the world is calling for transition to a low carbon economy, the Canadian government expects to increase oil production by approximately 1.5 million barrels per day by 2040.
27% of Canada’s Emissions
“The oil and gas sector is the greatest and fastest rising source of carbon pollution in Canada, now responsible for 27% of the country’s greenhouse gas (GHG) emissions. Its emissions have almost doubled since 1990, representing 80 per cent of Canada’s increase in emissions over that time,” wrote the authors of a recent report from Environmental Defence. ”Despite all the rhetoric from industry about ‘taking the carbon out of the oil barrel,’ average carbon emissions per barrel of Canadian oil keeps getting worse, increasing by 16% since measurements began in 1990.”
The Canadian Government confirmed that, “Between 1990 and 2018, emissions increased by 20.9%” and one of the principal contributors is “increased emissions from mining and upstream oil and gas production as well as transport.”
Cleaning Up The Oil Sands
This it is not surprising to find that two of the three items in the Federal Relief package announced Friday, April 17, pertained to cleaning up the oil sands.
- a $750 million Emission Reduction Fund (“ERF”) to be managed by Natural Resources Canada.
- Providing up to $1.7 billion in funding to the governments of Alberta, Saskatchewan, and British Columbia to clean up orphan and/or inactive oil and gas well sites.
“The first priority is helping and protecting workers who have lost their jobs. So it is good to see $1.7 billion earmarked for cleaning up oil and gas sites—a win-win for employment and the environment. We understand that the Alberta government has committed to policy changes that will prevent these liabilities being shifted from oil and gas companies to landowners and the public,” said Merran Smith, executive director at Clean Energy Canada.
“We are also pleased to see $750 million dedicated to methane-reducing initiatives, which are key to reducing carbon pollution from the oil and gas sector.”
While pointing out that the estimated cost of cleaning up the mess left behind by oil companies is $100 billion, Julia Levin of Environmental Defence also issued a favourable release:
“ … The government’s measures, announced today, seem to acknowledge that the vast majority of Canadians want our government to focus on transitioning workers and provinces towards a clean energy economy as the world moves away from oil to address climate change … However, reducing methane is very cheap, and the government should not be giving loans worth almost $700 million for companies to comply with existing regulations.”
My favourite comment was from Peter McCartney of the Wilderness Committee, “At the end of the day, you and I have to clean up our messes, so oil companies should have to do the same.”
Business Credit Availability Program
The third item of Trudeau’s relief package is expanding eligibility for the Business Credit Availability Program to support at-risk medium-sized energy companies and help them maintain operations and keep their employees on the job. Up to $15-16 million per company is available. The Business Credit Availability Program, the Business Development Bank of Canada and Export Development Canada will provide up to $65 billion in direct lending and other types of financial support, such as loan guarantees and co-lending programs for small and medium enterprises.
McCartney is sceptical, “There’s a reason nobody will lend oil companies money, and Canada should not be providing credit when we know many of them will never be able to pay it back.”
Oil Company Lobbyists
There has been a great deal of concern about the influence oil company lobbyists have been exerting on the government. One study showed that, between 2011 and 2018, they met with the Canadian government almost four times a day. In a leaked memo, dated March 27, CAPP asked theTrudeau government to defer, or suspend, reporting on a number of environmental concerns.
“…It is good news that the government has not given in to the enormous pressure being exerted by the oil and gas industry and the Province of Alberta – who have been asking for a $30 billion bailout,” said Levin
McCarthy adds, “We need a clear signal that the federal government understands the realities facing the global climate and global oil markets.”
Top photo credit: Tanker on English Bay by Steven Coutts via Flickr (CC BY SA, 2.0 License)
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