The days of infinite growth in Alberta’s oilsands are over with the Alberta government’s blockbuster climate change announcement on Sunday, which attracted broad support from industry and civil society.
“This is the day that we start to mobilize capital and resources to create green jobs, green energy, green infrastructure and a strong, environmentally responsible, sustainable and visionary Alberta energy industry with a great future,” Premier Rachel Notley said. “This is the day we stop denying there is an issue, and this is the day we do our part.”
Notley and Environment & Parks Minister Shannon Phillips released a 97-page climate change policy plan, which includes five key pillars.
1) Carbon will be priced economy-wide at $30/tonne by 2018.
2) Coal-fired power plants will be phased out by 2030.
3) Oilsands emissions will be capped at 100 megatonnes (Mt) per year (recent Environment Canada figures predicted a 2020 output of 103 Mt from the sector), which amounts to allowing current construction to go ahead, but that’s it. That means to expand production beyond current projects, per barrel emissions will need to be reduced.
4) Methane emissions from oil and gas operations will be cut by 45 per cent in 2025.
5) 30 per cent of all electricity will be generated by renewables by 2030.
It is a staggeringly significant proposal, one that far surpasses anything the former Progressive Conservative government imagined in the course of its 43-year reign. The announcement — delivered at Edmonton’s Telus World of Science — was benefitted by appearances from CEOs of Suncor, Canadian Natural Resource Ltd. (CNRL), Shell and Cenovus, something far-right activist Ezra Levant dismissed by alleging the massive energy companies “don't represent the industry.”
Environmental groups such as the Pembina Institute and Clean Energy Canada were also on stage. Getting all of those players in support of one climate strategy is a huge testament to the leadership of University of Alberta energy economist Andrew Leach, who chaired the climate change panel.
Climate Change Policy Plan Garners Broad Support
With the exception of the rabidly conservative Wildrose Party and former deputy premier Thomas Lukaszuk, it seemed every serious player in politics and industry celebrated the announcement. The NDP-affiliated Broadbent Institute, headquartered in Toronto, concluded: “On a public policy Richter scale, Alberta’s new Climate Leadership Plan is an 11.”
Shell Canada announced that “these measures provide predictability and certainty and will help ensure that producers can responsibly develop and grow this significant Canadian resource while also addressing global concerns about climate change.”
Prime Minister Justin Trudeau congratulated Notley in a tweet now favourited over 1,300 times as “a very positive step in the fight against climate change.” Political blogger Dave Cournoyer accurately dubbed it a “pigs fly” situation.
All of this means a whole lot given the impending Paris Climate Change Conference (COP 21).
Canada ranks 15th out of 17th countries for greenhouse gas emissions according to the Conference Board of Canada, with Alberta contributing 36 per cent of national emissions in 2013 despite only accounting for 11 per cent of the country’s population.
The expected spike in oilsands expansion was widely expected to nullify all other sources of emissions reductions in the Canada. The fact that Alberta, and by extension Canada, is now going into COP 21 with a detailed plan to address the province’s largest source of emissions – oilsands development and coal-fired power plants – speaks volumes about the desire to be taken seriously on the world stage.
Climate Plan May Increase Social Licence for Oilsands Operations
Another component that ostensibly drove oil execs to hop on the green bandwagon was the need to accrue “social licence,” or the support required to build pipelines to export its products. The veto of TransCanada’s Keystone XL pipeline represents what happens when such social licence isn’t secured.
By addressing runaway emissions, Alberta-based companies might actually stand a chance to build infrastructure like the Energy East pipeline, which would transport 1.1 million barrels of diluted bitumen from Alberta to Quebec and New Brunswick every day.
“The province’s climate strategy may allow our sector to invest more aggressively in technologies to further reduce per barrel emissions in our sector and do our part to tackle climate change,” said Tim McMillan, Canadian Association of Petroleum Producers’ president and chief executive officer, in a statement.
“We encourage the province to follow a balanced approach, recognizing that our sector can only become a global supplier of responsibly produced oil and natural gas if we are competitive on the world stage.”
The fight over pipelines is unlikely to dissipate. While Sunday’s announcement was a giant step in the right direction, it’s still not enough to avoid catastrophic global warming, according to a statement from Greenpeace.
“These policies are important first steps, but much bigger emission reductions will be needed for Alberta to do its part to keep global warming below 2 degrees Celsius,” Alberta climate and energy campaigner Mike Hudema said.
Hudema also noted that the province still has no short or long-term emission reduction targets.
“Targets give an important signal to business, let the world know where Alberta is headed, and help ensure that direction leads to the reductions that science and equity demand,” he said.
The Pembina Institute has historically supported a higher carbon tax than what was proposed on Sunday – with $40/tonne in 2016, $50/tonne in 2017 and $60/tonne in 2018 — but the plan is an indisputably major upgrade from the Specified Gas Emitters Regulation (SGER), which taxed Alberta’s largest emitters (103 at last count) at the equivalent of $1.80/tonne.
George Hoberg, professor in the forest department at the University of British Columbia, notes there’s still plenty of work to be done but that: “Today is a day for celebration. Alberta has bent its carbon emissions curve, and provided a lever to Canada to show real climate leadership.”
Ultimately, the future of Canada’s environmental reputation may rely on the work that Trudeau and Environment and Climate Change Minister Catherine McKenna complete during and after the Paris conference. But Sunday’s announcement out of Alberta sets quite the standard.
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