No federal party offers clear path on how to wind down fossil fuel production

None of Canada’s national political parties in the 2021 federal election campaign can say exactly how their platforms would address the findings of a new scientific study that concluded the country needs to keep more than 80 per cent of its oil, gas and coal in the ground in order to respond to the global climate crisis.

The Narwhal reached out to the Liberal Party, the Conservative Party, the NDP and the Green Party in the wake of the study, published on Sept. 8 in Nature by scientists from University College London. While some listed examples of their climate policies and promises, none would say whether they could meet the target recommended by the peer-reviewed article.

Overall, the scientists concluded that nearly 60 per cent of the world’s oil and gas and 90 per cent of its coal must not be extracted in order to give the planet a 50 per cent chance of limiting warming to 1.5 C by 2050.

For Canada, the study, Unextractable fossil fuels in a 1.5 C world, said those numbers are higher. Approximately 83 per cent of the country’s oil reserves, 81 per cent of its gas reserves, and 83 per cent of its coal reserves must stay in the ground to achieve climate targets, the study found.

“There is an important leadership role here,” the study’s lead author, Dan Welsby, told The Narwhal by email. “A managed decline of fossil fuel production now, with government assistance in areas with high employment in fossil fuel production, will be critical.”

“Removing subsidies and tax incentives for fossil fuel producers is also an important aspect of this,” he added.

Welsby, a researcher at University College London’s Institute for Sustainable Resources, said the modelling used in the study is based on the assumption that all regions are committed to the 2015 Paris Agreement, a legally binding treaty that has a goal of limiting global temperatures to well below 2 C and preferably 1.5 C below pre-industrial levels.

“Our analysis suggests that global oil and gas production needs to have already peaked and enter decline at a global average of around three per cent a year out to 2050,” he said in an email.

Some federal election promises to slash pollution

In the federal election campaign, it was not clear how any of the parties intended to wind down oil and gas production, in line with the study’s findings, although all parties have introduced plans that they say would slash pollution from this sector.

Liberal Party spokesperson Alex Deslongchamps told The Narwhal in an email statement the party’s focus is getting to net-zero by 2050 by “ensuring emissions from the oil and gas sector only go down from here.”

The Liberals will put a cap on emissions and ensure they decline at the required pace to achieve net-zero by 2050, Deslongchamps explained. On subsidies for oil and gas, the party intends to eliminate them by 2023 instead of the previously proposed 2025. Public financing of the fossil fuel sector will also be phased out.

The Green Party’s spokesperson Imre Szemen said the party’s proposed policies include cancelling all new pipeline projects, cancelling all new oil exploration projects, ending the leasing of federal lands for fossil fuel production and retiring existing licences and banning fracking.

The Conservative Party of Canada did not respond to The Narwhal by publication time, while a spokesperson for the NDP said it was working on a response.

In their election platform, the Conservatives commit to introducing policies to reduce greenhouse gas emissions that would include finalizing regulations proposed by the Liberal government to reduce pollution from fuel and pursuing a price on pollution for industrial emissions that is tied to the U.S. and the European Union. On the other hand, the Conservatives also propose some policies that would expand fossil fuel production such as reviving the Northern Gateway pipeline project and encouraging the growth of what it describes as “renewable natural gas.” The Conservative platform also proposes to develop a new national clean energy strategy that includes nuclear, hydrogen, natural gas and renewable energy.

The NDP says in its platform that its policies are aimed at achieving net-zero emissions while creating a million new jobs, it also wants to boost cleantech research and incentivize environmentally friendly technology in the hopes of transitioning off fossil fuels.

Carbon budget shows Canadian energy sector is facing struggles

The Nature study examined how much carbon pollution can go into the atmosphere before global temperatures surpass 1.5 C above pre-industrial levels. Under that scenario, it estimated how much fossil fuel can be developed and how much needs to stay in the ground. Researchers and policy makers often refer to these types of calculations as a way of determining what they describe as a carbon budget.

The study also considered the cost of production of fossil fuels, the carbon intensity of extracting them, and the costs of low and zero-carbon alternative technologies in the region. As a result, Canada’s fossil fuels that need to stay in the ground are higher than the global average, particularly because of the high cost of production in the oilsands region where producers need to use large amounts of energy and water to separate bitumen, a heavy and thick oil, that is mixed with clay in the ground.

The oilsands contain massive deposits of bitumen that are part of what makes Canada home to the world’s third largest reserves of crude oil after Saudi Arabia and Venezuela, according to government estimates. The region has been both a source of significant revenues and jobs, as well as exponential growth in greenhouse gas emissions since the 1990s.

“Despite cost reductions in recent years, Canadian oilsands struggle to compete with other oil producing regions in our model in a rapidly declining market given the levels of demand reduction we see in order to keep within our 1.5 C carbon budget,” Welsby said.

The model used in the study notes carbon intensity from oilsands production is higher than conventional oil. Even if the energy involved in the production is decarbonized, it just makes for “additional costs to an already struggling position of Canada in terms of competitiveness vis-a-vis other producers.”

As Canada’s oilsands are subsidized by the federal government, “this would make subsidizing oilsands even more costly,” Welsby said.

Rapid reductions are anticipated in U.S. fossil fuel consumption

The 1.5 C scenario model also projects rapid reductions in U.S. fossil fuel consumption, which ultimately affects Canada’s oil and gas industry due to declining exports to south of the border.

This would make it harder for any Canadian oil and gas projects to achieve economic success.

“More countries are coming around to saying that they’re going to take strong climate action,” which makes it harder to sell them a carbon intensive product, said Mason Inman, oil and gas program director at Global Energy Monitor, a San Francisco-based climate research and advocacy group.

“Another part of it is that the development of renewable energy is coming along really well,” he added, which means those options are becoming cheaper.

Inman doubts any new oilsands or pipeline projects in Canada would be economical at the kinds of prices expected for them. Those new projects are at serious risk of becoming stranded assets, he added.

“Canada’s oil production sector is really going to be in trouble, because they are very high cost producers,” Inman said. “People have been warning about this kind of risk of stranded assets for several years, but the oil industry in Canada keeps continuing with adding more and more projects, nonetheless.”

Concordia University climatologist Damon Matthews’ internationally recognized research examines carbon budgets and emission allowances. He agrees that much of Canada’s oil and gas reserves are less economically viable than other global reserves.

“I think the fundamental conclusion [from the Nature study] is that there is vastly more carbon in current oil, gas, and coal reserves around the world than we are able to burn globally [in a 1.5 C world],” Matthews said. “Canada is at the higher end of that because our reserves are more carbon intensive, and more expensive, and less economically viable in the context of 1.5 degree warming.”

Matthews adds there’s a “disconnect” between “stated climate ambitions” and the policies proposed by federal parties in the upcoming election.

“Canadian governments are either not connecting the dots, and not realizing that a 1.5 degree level of emissions means winding down fossil fuel extraction in Canada over a 20-year period,” he said.

“The Conservative and Liberal policies are seeming to anticipate a world that is not following the 1.5 C scenario.”