This very long piece is the last of a four-part series on B.C.’s climate action plan. Part One addressed B.C.’s GHG reduction targets. Part Two addressed how that plan is at risk of being co-opted by Big Oil. Part Three took a closer look at the B.C. Climate Leadership Team’s recommendations for the carbon tax. This analysis explores how the oil and gas industry, and especially the LNG industry, might financially benefit from hidden subsidies recommended by that advisory body.

Like so many other governments around the world, British Columbia’s Liberal government led by Premier Christy Clark has been duped by the barons of Big Oil.

Beguiled by the petroleum industry’s promises of new investment and jobs, the Clark government has repeatedly proved itself a patsy in acceding to the LNG industry’s every demand.

In the process, it has subjugated B.C.’s global-leading 2008 climate action plan to its misguided vision for the unchecked exploitation of non-renewable natural gas.

It has broken its own law, in failing to meet B.C.’s legislated targets for provincial greenhouse gas reductions.

And it has tugged its forelock, at every turn, to meet each new industry demand for special treatment and locked-in subsidies and tax concessions that are fully underwritten by B.C. taxpayers.

This analysis explores how that taxpayer-subsidized boon to Big Oil stands to be further entrenched under the recommendations for updating B.C.’s climate action plan last fall by the government’s handpicked Climate Leadership Team (CLT).

The Ludicrous Foundation of B.C.’s Climate Avoidance Plan 

As I have explained in previous installments, B.C.’s greenhouse gas reduction plan is woefully off-track. The CLT has suggested a plan to help remedy that situation, mainly through a long-term commitment to a 12-fold increase in B.C.’s carbon tax.

Several other recommended measures that I address below are largely aimed at subsidizing B.C.’s worst carbon polluters, to help them offset the added carbon emissions they hope to impose upon B.C. in the name of economic development.

Underlying that project is the Clark government’s abiding obsession with LNG as B.C.’s principal driver of new resource development.

It intends to further aggravate B.C.’s GHG emissions challenges with a forthcoming climate “action” plan — more accurately, a climate action avoidance plan — that is sure to be tailor-made for the province’s largest industrial polluters.

Whenever that plan is released, it will be grounded in a vision for a massive expansion in fossil fuel development.

More drilling rigs and roads. More scars on our land base. More fracking and seismic instability. More water waste and groundwater poisoning. More pipelines. More energy burned in B.C. to produce still more non-renewable energy destined to be burned in far-flung places. And many, many times more greenhouse gas emissions.

All to “liberate” the “dream” of building plants on B.C.’s Pacific coast that will liquefy natural gas by chilling it to -160°C and ship it halfway around the world to China and other countries.

All in a rush to profit from that product that other countries are now struggling to sell because there is already far too much of it on the market.

It is to be a climate action plan aimed at largely undoing the anticipated damage from a new LNG industry that may never ultimately materialize in British Columbia, ironically, because it is so demonstrably unnecessary — a victim of its own global rapacity and redundancy.

It is an industry that is struggling to cope with the falling price of a product it wants to wish upon our choking world.

A product that has been devalued by the global glut of LNG that it has created from overproduction and from the world’s suddenly serious attempts to reduce its dependency on fossil fuels.

A product that at least one study from the Canadian Centre for Policy Alternatives shows will be devastating for B.C.’s environment and may well increase global GHG emissions over at least the next fifty years, compared to even building state-of-the-art coal plants.

Indeed, it is an industry that should have no future in B.C. if we are truly concerned about shifting to a low-carbon economy, about mitigating avoidable greenhouse gas emissions, and about seriously combating global warming.

That should be the central, unwavering message from British Columbia’s environmental community and from all those who should know better.

Which makes it all the harder to fathom why the environmentalists and academics who served on the CLT ever agreed to embrace a climate action plan that is innately dedicated to advancing the Premier’s LNG vision and to offsetting its negative impacts largely at taxpayers’ expense.

Accepting that vision for increased carbon emissions as the starting point for renewed climate action plan will make it even more challenging and more costly to meet British Columbia’s legislated GHG reduction targets.

This is the fundamental point that compromised the CLT’s mandate and mission, which it failed to articulate and which must be soundly rejected.

The most rational response to any problem is to first address it by doing less of the thing that is the problem, not the opposite.

You wouldn’t council a drug addict to take even more drugs as a way to kick their habit.

You wouldn’t advise a person mired in debt to max out their credit cards and to apply for new ones as a path to reducing their spending.

You wouldn’t urge someone who is drowning to keep gulping the stuff that is sinking them as they dog paddle their way back to safety.

So why on Earth would anyone think that the way to solve our global warming crisis is to intensify fossil fuel developments in Canada that we can readily live without and that will only compound the problem they are creating?

How crazy must we be to think that the best way to lower greenhouse gas emissions that are threatening our planet’s very existence is to launch a new carbon-intensive industry in B.C. that we don’t have, don’t need and can’t afford?

Nuttier still is planning to do that when the bottom has fallen out of the global LNG market, leaving exporting countries like Australia holding the bag for that industry’s environmental and social costs, with virtually nothing of worth for taxpayers to show for it.

Carbon emissions are the problem we want to solve.

It makes no sense to invite more of them, only to have to offset them, as we also try to eliminate the ones we are already producing at a rate that exceeds our efforts to reduce them.

Yet that is precisely what the CLT plan struggles to achieve, largely by transferring the risks and costs of the most onerous climate actions that would be required to follow that nonsensical course, from the largest industrial polluters, to B.C. taxpayers and families.

We need to reject that plan to further subsidize B.C.’s worst carbon polluters, and instead, make them more accountable for the actions and costs that will flow from eliminating their unwanted emissions.

This much is evident.

The well-meaning members of the CLT who care deeply about reducing British Columbia’s greenhouse gas emissions got outplayed by their government and industry colleagues.

The LNG representatives and advocates who sat on the CLT well understood that its “consensus” recommendations to increase and expand the carbon tax would never be adopted by the B.C. Liberal government.

They signed onto that package not for what it purports to demand in terms of right-pricing carbon; but rather, for what it might help to legitimize in further subsidizing their industries’ obligations to reduce their emission intensity levels, if not their actual emission outputs.

They signed onto it knowing that it would be “cherry-picked” by the Clark government, notwithstanding the CLT’s contention that its recommendations must be accepted a total indivisible package.

They signed onto it hoping that at least some of the hidden subsidies, regulatory concessions, risk avoidance measures and tax relief policies that stand to benefit their industries would be embraced by the government.

In short, they signed onto to that CLT “consensus package” because of what it does not demand. And also because of the enormous “wriggle room” for climate action avoidance that it provides, through its lack of specificity and through its lip service to future policy reviews and business relief measures in the interests of “global competitiveness.”

The Clark government will not support all of the measures that the CLT has recommended to most benefit B.C.’s largest carbon polluters. Yet the CLT’s report provides it with plenty of new ammunition to double down on its failing LNG vision with new mitigation measures that will principally mitigate industries’ costs of paying for their own carbon pollution.

Revisiting the B.C. Liberals’ LNG Subsidy Plan

The CLT suggested several actions that would especially benefit the LNG industry, the oil and gas industry, and more broadly, carbon intensive industries.

To appreciate the scope of those suggested hidden subsidies for LNG in particular, it helps to know a little about the incredibly generous tax arrangements that the Clark government has already extended to those huge firms, in furtherance of its LNG strategy.

Key among those is the infrastructure royalty credit program, which was introduced in 2004 by the Campbell administration to encourage natural gas exploration and development.

For a great analysis of the true hidden cost of that program, check out this piece from blogger Norman Farrell, who has written extensively on the subject.

The royalty credit program grants companies deductions from the royalties they would otherwise have to pay on the natural gas they extract. It is a well-hidden subsidy that is really a tax expenditure and that has poured billions into the pockets of the oil and gas industry over the last 12 years.

It was arguably a defensible trade-off for government back in the days when that royalty credit was at least partially offset by the billions of dollars in natural gas revenues that that industry returned to the provincial treasury from its investments.

But today, it is harder than ever to justify.

The Clark government recently approved yet another $120-million in tax breaks to 10 energy companies under that program, ostensibly, to “buy” ongoing industry investment in British Columbia’s northeastern region.

Yet the province is only expecting to collect $128 million in natural gas royalties this year — almost a dollar-for-dollar subsidy.

It was exactly a year ago, in the dead of summer that the Clark government pushed through its Liquefied Natural Gas Act Projects Agreement Act over the objections of the opposition.

That Act paved the way for the government to enter into the Petronas precedent, a 25-year, ironclad sweetheart deal aimed at landing the proposed Pacific NorthWest LNG project in Prince Rupert. (See my critiques in the Georgia Straight here.)

It also allowed the government to enter into similar project agreements with other LNG consortiums, without the requirement for legislative debate and approval.

The Petronas precedent set the floor for LNG subsidies in B.C. It guaranteed Pacific Northwest LNG ridiculously low corporate income tax rates, ongoing LNG tax credits and taxpayer-backed indemnities that would all be locked-in until for 25 years.

Initially the government planned to set the LNG industry’s tax on net income at seven per cent. When the industry balked, the government caved like a cheap campstool. It cut that rate in half, to 3.5 per cent, until at least 2037, when it may rise to five per cent.

To further sweeten the pot, the tax on net operating income from liquefaction activities, which is applicable for companies that technically don’t have a net income, was set at a mere 1.5 per cent.

That tax is not even payable until there is a zero balance in any LNG plant’s net operating loss account and its capital investment account.

Plus, any tax that the companies pay at the 1.5 per cent rate on their net operating income is only notionally payable in the short run. Their supposed tax “contributions” are actually set aside and accrued in a tax pool that can be later used to reduce the amount of income tax payable at the 3.5 per cent rate, after an LNG facility’s net operating loss account and its capital investment account are reduced to zero.

On top of that sweetheart deal, the Petronas precedent guaranteed that the current Natural Gas Tax Credit will also be locked-in for 25 years.

That tax credit, which reduces the amount of corporate income tax that LNG plants would otherwise have to pay from 11 per cent to as little as eight percent, will be increased next January.

The amount they will be able to deduct for the cost of any natural gas delivered to their facilities will rise from 0.5 per cent to three percent. And that tax credit can also be carried forward from previous years to reduce those companies’ corporate income taxes in future years.

Think of that.

Those oil and gas behemoths have now been guaranteed a special 25-year tax freeze, at rock-bottom tax rates, and a 25-year tax credit that will be six times higher next January than it is today.

It is an outrageous sell-out to the world’s richest oil companies that provides them a 25-year contractual tax benefit and tax certainty that no other industry or individual enjoys.

And it doesn’t stop there.

As I explained in my last analysis on the carbon tax, the gas industry is now also benefiting from the Clark government’s repeal of its predecessor’s Cap-and-Trade Act.

Instead of being obliged to reduce its carbon emissions under annually declining hard caps on emissions levels, the LNG industry is now subject to a new Greenhouse Gas Industrial Reporting and Control Act that only obliges it to meet prescribed carbon intensity levels.

Under the new regime, B.C.’s LNG companies can pollute without limit.

They are allowed to emit 0.16 tonnes of carbon dioxide for every tonne of LNG exported, without penalty. Beyond that threshold, theoretically, the companies must either purchase market-based emissions offsets or pay into a technology fund at the rate of $25 per tonne.

But the government will actually subsidize that penalty by as much 100 per cent for LNG plants that barely exceed the new intensity benchmark. That subsidy declines to “only” 50 per cent of the penalty that would otherwise be applicable for those who emit 0.23 tonnes of CO2 emissions.

Given that almost all of the proposed LNG plants plan to produce C02 emissions that vastly exceed the allowable emissions intensity benchmark, it is yet another whopping gift to polluters. It makes a mockery of the government’s claim that B.C. will have the “cleanest LNG industry in the world.”

And here’s the capper.

The Petronas precedent also gave those Asian state-oil monopolies a special 25-year indemnity that is underwritten by B.C. taxpayers.

That indemnity will save them harmless from any so-called “discriminatory events.”

It assured the LNG industry that any companies covered under such project agreements would not have to face any industry-specific carbon taxes or any new industry-specific GHG reduction initiatives for at least 25 years.

If any future government changes those locked-in tax rates and benefits at a cost to those companies that is greater than $25 million in any year, or more than $50 million over five years, they will be entitled to full compensation, courtesy of B.C. taxpayers.

Similarly, any changes in government policy that impose new rules or tougher standards specific to the LNG industry, which entail higher costs relating to carbon taxes or to greenhouse gas emissions and reporting requirements, will be fully compensable above that threshold.

And the Petronas precedent further stipulated that if any other LNG project got an even sweeter deal from the government, the Pacific Northwest LNG project would get that too.

In essence, the Clark government was so desperate to land a major LNG deal, it contractually signed away British Columbia’s ability to control its own tax regime, carbon pricing and climate action strategies in specific regard to that industry.

All of it amounts to a new license to profit from uncapped carbon pollution, as it also essentially prevents governments and taxpayers from properly taxing the natural gas industry for their profits and for their pollution.

To my knowledge, the Pacific Northwest LNG project is the only project thus far formally covered by an agreement authorized under the new Act.

But the concessions granted in the Petronas precedent and by the new emissions intensity regime are potentially a major additional problem for rebalancing B.C.’s climate action plan.

They will make it that much more difficult and potentially costly for taxpayers to make the LNG industry fully pay for its carbon emissions and for its incremental emission reduction measures under any serious climate action plan.

The last thing we should be doing is tying government’s hands in how it can use its available policy measures to put more onus on industrial carbon polluters to clean up their act and to pay disproportionately more for their disproportionately high carbon emissions.

If anything, we should be revisiting the carbon tax to create differential carbon tax rates that escalate with the type and usage of fossil fuels covered by its carbon tax, similar to Norway.

We should be putting more financial pressure, not less, on B.C.’s most carbon-intensive industries to expedite the mitigation measures necessary to dramatically cut their emissions that represent such a huge proportion of B.C.’s emissions inventory.

As I suggested in my last installment, a cap-and-trade system should also be embraced to do that at the lowest possible cost, as was originally envisioned in the 2008 climate action plan.

It should be implemented in tandem with a revised carbon tax that is gradually increased over time, in a politically sensitive way that will achieve the CLT’s end goal in that regard.

And the carbon tax should also differentially adjusted to oblige B.C.’s largest polluters to pay for their process emissions and for any other emissions that are not adequately captured within a globally integrated cap-and-trade system.

We should not be exempting the LNG sector or other carbon-intensive industries from any industry-specific carbon taxes or mandatory emissions reductions requirements. Rather, we should be requiring them to bear the full brunt of the cost of their carbon pollution as we also put new standards in place to drive them more quickly to adopt cleaner technologies.

In doing that, we must remain vigilant not to devise climate action strategies that would actually further subsidize those major polluters at taxpayers’ expense.

Unfortunately, many of the CLT’s recommendations would move us in the opposite direction.

Let me now turn to some of the uncosted hidden subsidies that would be effectively extended to the LNG sector and to other carbon-intensive industries under the CLT’s recommendations.

Hidden Subsidy #1: A Potentially Lower Carbon Tax for “Trade-Exposed” Sectors

The heart of the CLT’s plan is to increase B.C.’s carbon tax by $10 per year, from 2018 to at least 2050. That would raise the cost of the carbon tax from $30 a tonne to $360 a tonne.

But here’s the catch. The largest industrial polluters — that is, the “emission-intensive, trade-exposed sectors” — might not have to pay that under the CLT’s recommendations.

The following quotes from its report are instructive:

“Establish targeted and transparent mechanisms for emission-intensive, trade-exposed sectors that mitigate the competitiveness issues created for those sectors if B.C.’s carbon pricing is materially greater than jurisdictions with which they compete, provided that such mechanisms are structured in a manner that does not adversely impact the price signal to reduce emissions. These adjustments should remain in place until such time that carbon pricing and regulatory policy equivalency with other jurisdictions is achieved.”

“The scheduled annual increases in the carbon tax and the competitiveness adjustments for emission-intensive, trade-exposed sectors should be reviewed by the Province, with the support of a Climate Leadership Team, every five years, or more often where warranted, taking into consideration GHG reductions, economic competitiveness, carbon pricing and regulatory policy in other jurisdictions, and impacts on vulnerable communities.”

In other words, the CLT has thrown open the door to exempting B.C.’s worst carbon polluters from some or all of the carbon tax increases that would apply to all other British Columbians.

Its vision for carbon tax hikes is an open question for the “emission-intensive, trade-exposed sectors,” subject to future review and competitiveness considerations that are sure to mean those industries will enjoy breaks on their carbon taxes, while everyone else has to pay ever higher carbon taxes whether they like it or not.

For the LNG industry, it means that not only will it not be subject to a specifically targeted carbon tax to properly price its inordinately high carbon emissions. But it might not even have to pay the level of carbon tax this is generally applicable to individuals, families and small businesses.

Hidden Subsidy #2: A Lower Sales Tax That Will Disproportionately Benefit Large Emitters

As the CLT noted, “natural gas production accounts for 16 per cent of the province’s greenhouse gas emissions and is the largest industrial sector.” If the LNG vision ever comes to fruition, that proportion will grow by leaps and bounds, potentially doubling B.C.’s overall emission levels.

The CLT recommends many measures to address that fact, including new targets for reducing process and fugitive emissions and lots of lip service to adopting “best practices” and unspecified new regulatory standards and policies.

Its most specific recommendations are all hidden subsidies to that sector and to other industrial polluters that would cost B.C. taxpayers an unquantified bundle.

The CLT wants to lower the provincial sales tax from seven per cent to six per cent.

The biggest beneficiaries of that initiative, by far, would be B.C.’s largest corporations, typically in the natural resource sector.

They would get millions of dollars in annual tax relief, whereas most middle class families would receive a few hundred dollars a year in benefits.

The sales tax is a regressive tax that imposes the same dollar-for-dollar burden on anything subject to it, regardless of buyers’ different incomes.

A cut in the sales tax rate would most benefit those who buy the most, be they high-income wage earners or large corporations.

A middle income earner who spends even $40,000 a year on items that are subject to the sales tax — a fairly high amount — would save $400 a year on a one per cent sales tax cut.

A wealthy individual who makes ten times that amount would save ten times that amount. A large natural resource company that spends exponentially more would save exponentially more.

The CLT explained its rationale as follows:

“B.C. is competing with a number of new suppliers for a limited market. Our recommendations to reduce the PST (generally by one basis point and entirely on electricity rates) and make available transitional support for emissions-intensive, trade-exposed sectors are intended to address this reality — particularly if B.C.’s climate policy materially exceeds the stringency of our competitors.”

I noted in my last installment how the recycled money from the revenue-neutral carbon tax is already disproportionately benefiting business rather than individuals.

This recommendation from the CLT would further exacerbate that disparity, with the biggest benefits — by far — going to B.C.’s largest companies: the large natural resource companies that are B.C.’s biggest carbon polluters.

Hidden Subsidy #3: The Elimination of Sales Tax on Electricity for Industry

The CLT also recommended eliminating the PST on electricity rates for industry, noting that it does not apply to electricity purchased by individuals.

It did not quantify how much that gift to industry would cost, but suffice it to say, it would be massive — at least tens of millions of dollars annually, if not more.

That would represent an enormous gift to B.C.’s largest industrial polluters — the oil and gas industry, the forest industry, the mining industry, the cement industry and others.

It would substantially reduce the amount of revenue that would otherwise be available for crucial services, like health care, education, child protection, public safety and other social services.

Like the proposed sales tax cut, which would be financed from incremental carbon tax revenues, that measure would represent a whopping tax subsidy to big business and to B.C.’s largest energy users, at the expense of the individuals and families who depend on the services funded by those tax dollars.

It is only fair and sensible to retain that sales tax on industrial electricity, given the inordinate pressure those energy-intensive sectors put on British Columbia’s electrical system.

Even without LNG the industrial sector is expected to account for the most growth of all key sectors in the next 10 years, mostly for mining, forestry, and oil and gas activity.

As the B.C. government gradually weans itself off of the hundreds of millions of dollars in annual “dividends” it obliges B.C. Hydro to contribute (including through deferred debt), it will need every penny of its existing sales tax revenue to offset those revenue losses.

Carbon intensive industries that are already buying electricity and paying sales tax on that energy will not produce one less molecule of carbon dioxide if that sales tax is eliminated. They will only make more profit at the expense of all other carbon taxpayers.

Hidden Subsidy #4: Risk-free, Cost-free Electrification for LNG Plants

Of all the suggestions made by the CLT, perhaps none would be so costly to taxpayers as its proposal to oblige B.C. Hydro to electrify the LNG industry.

Its recommendation on that point reads as follows:

“Instruct BC Hydro to develop a strategy (generation and transmission) to supply in a competitive, timely manner the clean electricity required to facilitate electrification of upstream natural gas, LNG, and associated infrastructure. Amongst other things, the strategy should enable BC Hydro to commit to supplying new industrial projects with clean electricity by project start up, if necessary through the use of temporary natural gas generation until transmission infrastructure is available.”

The CLT rightly points out that “LNG plants … can rely on clean electricity instead of natural gas for both the liquefaction process and their auxiliary demands” to reduce their emissions.

True enough. If we are to be saddled with an LNG industry that exponentially ramps up B.C.’s carbon emissions, it makes sense to minimize those additional GHGs by requiring LNG plants to adopt e-drives or other zero emission technologies.

But the ones who should bear the cost for that should be that industry and those companies — not B.C. taxpayers.

Instead, the CLT wants BC Hydro to bear the brunt of that cost.

It wants to transfer those incremental costs and risks associated with electrifying those proposed LNG plants to the rest of us. That’s wrong.

The CLT also wants BC Hydro to incur the added costs of generating the additional electricity capacity and the untold billions of dollars in new costs that would be required to build new transmission lines and to service the added debt of that infrastructure.

It wants to guarantee those LNG companies expedited construction schedules that would transfer the risks of building those transmission lines and of supplying them with the electricity they need in accordance with their project timelines to B.C. Hydro. And it further wants to guarantee them they will be able to buy their new power at “internationally comparable” rates.

The CLT’s report put it this way:

“If a proponent wants to use clean electricity instead of gas, they need to be confident that the electricity transmission and supply will be available on the timelines they are advancing their project…One aspect of providing electricity in a competitive, timely manner is ensuring that BC Hydro is able to commit to supply contracts that provide, on reasonable commercial terms used in other jurisdictions in similar circumstances, for damages in the event of failure to deliver new supply within agreed upon time frames and, in the case of LNG, for liquidated damages in the event of interrupted supply. In the event of any damages being payable by BC Hydro, the ratepayers should not bear the burden.” [Emphases added.]

That last line sounds reassuring on the surface. But if ratepayers “should not bear the burden,” and the LNG companies are not expected to bear those costs, it can only mean that the government will — meaning B.C. taxpayers.

Essentially, what the CLT is recommending is that all future LNG plants in B.C. should use so-called “outside the fence” power sourced from outside the plant, instead of the on-site “inside the fence” gas-fired power that is now typically contemplated for most projects.

The Northwest Institute for Bioregional Research rightly observed, “If ‘outside the fence’ power is sourced for LNG production, large upgrades to B.C.’s transmission and generating capacity will be needed. This could cost tens of billions of dollars, but could also generate significant income to First Nations, or crown corporations.”

I repeat, it could cost “tens of billions of dollars” that someone would have to pay, ostensibly, ratepayers, or taxpayers, if not the LNG companies.

Even without the added electrification requirements suggested by the Climate Leadership Team to power LNG plants with e-drive systems, BC Hydro anticipates that its load forecast from oil and gas will climb by almost five-fold over the next 10 years, if the Clark government’s LNG vision comes to pass.

As it stands, BC Hydro’s most recent integrated resource plan only contemplates having sufficient supply to meet an initial expected LNG load of 3,000 gigawatt hours per year, before applying its demand-side management measures.

It anticipates that demand from the LNG industry could be as much as 6,600 GWh/year, even without powering all of its proposed plants with e-drive systems.

BC Hydro also projects a mid load forecast for LNG peak demand at 360 megawatts — an amount equivalent to roughly one-third of the 1,100 MW that the $8.8 billion Site C project would create.

But that vastly underestimates the amount of power that would actually be required to power even a handful of LNG plants with e-drive systems.

For example, the proposed the Grassy Point LNG Project would alone require 1,000 MW of power. The now indefinitely delayed LNG Canada Project would require 1200 MW and a new 500 kV line from Prince George to Terrace. And the Pacific Northwest LNG Project would require at least another 700 MW of electrical energy

And those are just three of the 20 proposed LNG projects that are at least theoretically on the drawing board in British Columbia. Many of those other projects — like the proposed Kitsault Energy Project, the Canada Stewart Energy Project and the Nisga’a LNG Project — are in very remote areas that would be incredibly expensive to power via the BC Hydro grid.

If the LNG “dream” ever comes true, even without the added pressure from e-drive plants and their associated transmission, BC Hydro estimated that the oil and gas sector will consume almost double the electricity consumed by the pulp and paper sector, and much more than even the energy-intensive mining industry.

The cheapest form of energy savings is conservation. The biggest projected driver for new electricity demand is natural gas development, including LNG.

The CLT’s proposal would serve the goal of reducing emissions from LNG plants. But it would place untold new power demands on BC Hydro that would put upward pressure on Hydro rates that would otherwise be avoidable.

Bear in mind, the new Northwest Transmission Line (NWTL) along Highway 37 alone cost $716 million, up from an original budget of $395 million, when Premier Clark came to power.

A major reason for its budget increases related to expedited construction schedules, to meet timelines mandated to supply power from the new Forrest Kerr run-of-river power project and other smaller energy projects to the new Red Chris mine and other new mines in that wild and remote area of B.C.

The much shorter Iskut Extension that extended that 287 kV transmission line from Bob Quinn Substation to the mine, was also over budget. Its cost increased from $180 million to $209 million, because building new transmission lines in that part of northern B.C. are no small feat.

As Vancouver Sun columnist Vaughn Palmer recently pointed out, the budgets for four recent transmission projects, including the NWTL rose from a combined $1.4 billion to over $1.9 billion, for a collective over-run of $516 million or 36 per cent.

On top of all of those cost considerations, the requirements for consulting and accommodating First Nations’ constitutionally protected rights is a further cost challenge. Especially if commitments are made to deliver fully compensable power rights to LNG companies within their projects’ designated timelines.

In the interest of providing clean, cheap, reliable electricity to power LNG plants that would reduce their GHG pollution, the costs of properly respecting Aboriginal rights and title could be astronomical.

No one really knows how high they might be, but the CLT was altogether silent on that point, which represents another aspect of the hidden subsidy for power its industry representatives succeeded in advancing in its recommendations.

The fact is, the CLT’s recommendations for powering LNG plants could have dramatically adverse unintended consequences for taxpayers and the environment alike.

Mostly, however, they would stick taxpayers and BC Hydro with the lion’s share of costs and risks for making e-drive LNG plants more economical for the large oil companies that stand to profit from them.

If those costs and risks were properly factored into the government’s LNG vision, it would significantly alter its cost-benefit bottom line.

Yet in the absence of e-drive LNG plants, British Columbians will be left holding the bag for much of the cost and sacrifice needed to offset the added emissions those gas-fired plants will entail.

Either way, most B.C. taxpayers and most B.C. families will lose.

Hidden Subsidy #5: A Five-year Minimal Carbon Tax Holiday for Process Emissions

The CLT recommended expanding “coverage of the current carbon tax to apply to all greenhouse gas emission sources in B.C. after five years, starting with measurable GHG emissions covered by the current reporting regulation.”

Essentially it is proposing to let the oil and gas industry off the hook for paying carbon taxes on their methane process and fugitive emissions for at least five more years, until 2021 at the earliest. While it also envisions that the carbon tax will also go up for everyone else by another $40/tonne over that period.

In the meantime, it hopes the natural gas industry will voluntarily act to cut its process emissions by some 40 per cent, assisted by further subsidies from the forthcoming green infrastructure tax credit.

But there is no guarantee that will happen. And the only hard action recommended by the CLT to address fugitive and vented methane emissions to require “industry through regulation to implement leak detection and repair programs in line with best practices in North America.”

Why that has not already been required is beyond me.

Ditto for the CLT’s suggestion that the industry “develop best practices for methane reduction, including transparent reporting, through a collaborative initiative involving the provincial government, industry, and other stakeholders with expertise in this area…and seek alignment with Canada and other provincial jurisdictions in this regard.”

The Pembina Institute and others are right to maintain that we should not wait until 2021 to act on reducing deadly methane emissions with an earlier imposition of the carbon tax and other measures.

Yet the CLT’s most important recommendation in respect of addressing fugitive and vented emissions is this one:

“Providing that at the time of the first five year review of the Climate Leadership Plan, a new reduction goal for fugitive and vented methane emissions should be established and a determination made whether future reductions in fugitive and venting methane emissions are best achieved through expanding the coverage of the carbon tax to such emissions…[or through] a continuation on a voluntary basis of the best practices developed above for methane reduction (provided the industry has reached the 40 per cent methane reduction goal within five years), or such best practices developed for methane being mandated by regulation at that time (with such regulations to be reviewed every five years thereafter).”

In other words, under that recommendation, even after another five years’ carbon tax holiday on those emissions, it might well be that the industry will continue to be exempt from paying carbon taxes on those uncaptured process emissions.

Stunning.

Once again, the environmentalists and academics on the CLT got completely snookered by the industry representatives and the government mouthpieces that succeeded in rendering its carbon tax commitment almost meaningless for B.C.’s largest carbon polluters.

No wonder the oil industry representatives on the CLT signed onto that almost meaningless “commitment.”

Conclusion

All of these are only a handful of the effective subsidies to carbon emitters that were tacitly recommended by the CLT, mostly for the benefit of Big Oil.

It is unfortunate that the CLT offered so little in the way of specific “bullet-proof” recommendations for reducing B.C.’s carbon emissions.

British Columbians must now await the government’s Climate Action 2.0 to ascertain what more it will actually do to meet its legislated GHG reduction targets, besides buying itself more time, as suggested by the CLT, which failed to prescribe new provincial interim targets before 2030.

Hopefully it will be as detailed and progressive as Ontario’s truly excellent new climate action plan.

Just as that province’s first climate action plan largely borrowed from many of the measures adopted in B.C.’s 2008 plan, British Columbia would now be well advised to use Ontario’s new blueprint as the key resource it is for advancing climate action.

In a future article I will suggest a number of hard measures that B.C. could take to help meet its targets in the oil and gas sector and in other sectors I did not address in this analysis.

The fact is, the CLT’s recommendations for emissions reductions from buildings, forestry, agriculture, transportation and other sectors are pretty much all as vague as they are aspirational.

The good news is that, by and large, they do not overtly suggest anywhere near the level of hidden subsidies that I have highlighted above in regard to the LNG and natural gas sector. It’s just that they say so little of substance to advance the mission that the CLT was given.

The bottom line is this: the only sensible way to responsibly address British Columbia’s growing greenhouse gas emissions is to stop unecessarily adding to them in the first place.

Instead of digging ourselves ever deeper in the hole by inviting an LNG industry that British Columbians will also be expected to subsidize in addressing its added emissions, we should just say, “enough.”

We do not need that industry and do not want its added carbon pollution.

Enough. It is time to develop a serious climate action plan that embraces a low-carbon economy and that duly ensures its largest carbon polluters pay their full share of the cost of reducing those emissions.

Martyn Brown was former B.C. Premier Gordon Campbell’s long-serving chief of staff and a key architect of B.C.’s climate action plan and clean energy plan. He was the top strategic advisor to three provincial party leaders, and a former deputy minister of tourism, trade, and investment in British Columbia. A frequent contributor to the Georgia Straight, Brown is also the author of the eBook Towards a New Government in British Columbia. Contact Brown at towardsanewgovernment@gmail.com.

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This is the second of a four-part series on B.C.’s climate action plan. Part One addresses B.C.’s GHG reduction targets. Part Two addresses how that plan is at risk of being co-opted by Big Oil. Part Three takes a closer look at the B.C. Climate Leadership Team’s recommendations for the carbon tax. And Part Four focuses on how the oil and gas industry stands to profit from that advisory team’s proposed climate action plan.

In accepting its mission as defined by the government, the Climate Leadership Team (CLT) also implicitly accepted the government’s plan for increased emissions from LNG and from other carbon-intensive development.

As laudable as the CLT’s climate action plan is in most respects, it is wrongly predicated on accommodating the oil industry’s vision for increased fossil fuel extraction.

Which is to say, it is innately co-opted by its mandate, which is wedded to the acceptance of an overriding economic plan for carbon-fuelled growth.

That is not to suggest that all, or even a majority, of the CLT members support that economic vision. Far from it.

But in accepting their mandate, they were all obliged to respect the Clark government’s four Cornerstone Objectives as their starting point for climate action.

Those objectives basically obliged the CLT to recommend measures for meeting B.C.’s 2050 GHG reduction target, while also allowing for the added emissions that will flow from the government’s LNG Strategy and from its carbon-intensive B.C. Jobs Plan.

As the CLT noted, if that (or any) Cornerstone Objective “were to be deemed not a priority, the substance of the recommendations of the Climate Leadership Team may well be different.”

Therein lies the fatal flaw of the proposed plan.

Mission Impossible

It rests on an economic foundation that purports to dramatically increase greenhouse gas emissions that, in turn, will make the task of reducing those and all provincial emissions by some 80 per cent below 2007 levels vastly more difficult and more costly to achieve.

Accepting that foundation as our starting point for climate action turns B.C.’s “mission improbable” into “mission impossible,” regardless of any theoretical assurances offered to the contrary from any private consulting firm specializing in climate and energy modeling.

I have had enough experience with such environmental and econometric modeling to know how readily compliant with their client’s wishes their statistical outputs tend to be. I am certainly not suggesting they fudge the figures or in any way act unprofessionally; but they are always mindful of the unspoken “truths” their clients hope to prove.

In my experience, it was never too challenging for the government to obtain “proof” that its policies, plans and “business cases” made sense, typically from thoroughly respected and utterly professional firms.

Only history typically makes of an ass of those econometrically-sound leaps of science, faith and mathematically-inspired feats of assumption.

From the economic benefits of the Olympics, to the rosy picture painted by the properly qualified findings of the quantitative analysis of British Columbia’s initial climate action plan, history tends to discredit even the most credible economists’ “crystal-balling.”

Their seemingly “firm” findings are always carefully qualified in the fine print that their clients usually are not so keen to talk about.

They are always based on the quicksand of often-dubious reference scenarios, economic and other assumptions, and interpretations of loosely worded policy statements, strategic directions and unspecified actions.

Push on any of those analyses hard enough and you will be happy enough to bury them, lest someone else shows how magically they rest upon their mucky postulations and presumptions.

With few exceptions, there is simply nowhere near enough detail or specificity in the Climate Leadership Team’s plan to make any credible forecasts about its potential GHG reduction impacts.

The truth is, it is fundamentally impossible to quantify the impacts of so many open-ended and interacting variables. It is a qualitative art, in the first instance, to try to interpret the mostly aspirational strategies to develop strategies, “best practices” and actual mitigation measures that are suggested in the CLT’s plan.

Nor can any such modeling account for the political will — or lack of it — in interpreting and actioning the CLT’s suggested strategies over some 34 years.

All of which is to flag the obvious: we should take any modeling that says we can meet our 2050 GHG reduction targets by exponentially adding to our emissions pressures with a grain of salt.

At a minimum, that can only make the challenge more difficult and more costly to achieve.

That incremental emissions pressure from incremental fossil fuel extraction, shipping and processing can only make their attendant environmental risks, financial costs and behavioural burdens more onerous, especially for individuals, families and those who can least afford them.

The best chance we have at meeting B.C.’s 2050 GHG targets is to minimize its emissions baseline, instead of the opposite.

The last thing we should be doing is planning for a future that is intentionally predicated on potentially doubling our emissions pressures, in pursuit of the economic lure being dangled out by the LNG consortiums and large oil companies.

Rush to Increase Oil and Gas Development

As B.C.’s chief cheerleader for LNG, and as the oil industry’s passive accomplice in “getting to green” in moving Alberta’s bitumen to Pacific tidewater, our premier is both a friend in deed and a friend in need to the barons of Big Oil who so generously fund her party.

Indeed, her government has been thoroughly co-opted by those who want us to stake our economic future on their increased exploitation of fossil fuels for their profit, global warming be damned.

It is content to suck and blow at the same time on climate action by dramatically expanding oil and gas development while simultaneously trying to eradicate its unwanted and entirely avoidable incremental emissions.

That wrong-headed approach will oblige us all to pay a much heavier price to reduce the added emissions that will result from the government’s rush to yield export-driven profits for the mostly foreign multinationals that want to increase Canada’s oil and gas development.

The largely state-owned oil companies from China, Malaysia, India, Brunei and elsewhere that are driving B.C.’s slavish devotion to LNG development couldn’t be happier.

Whether or not they eventually move forward with their potential investment plans in B.C., they are thrilled with the B.C. Liberals’ penchant for prostrating themselves to their industry’s “competitive demands.”

Ditto for the mega-rich private oil companies from the USA, the UK, Japan and Canada.

After all, they have already successfully suckered the Clark government into granting them unbelievably irresponsible tax breaks, subsidies and taxpayer-backed giveaways, through the ill-conceived Petronas precedent. (See related stories in the Georgia Straight, here, here, here and here.)

If nothing else, the premier’s unqualified support for their projects, through long-term tax concessions, tax credits and environmental risk transfers, increases their leverage with other governments that are equally starry-eyed about the zero sum global game of LNG development.

Now they stand to gain from an updated provincial climate action plan that they hope and expect will be anything but that.

It will amount to a contradiction in terms, if the Kinder Morgan Trans Mountain pipeline project, the Pacific Northwest LNG project, and the premier’s broader vision for export-driven fossil fuel development is allowed to proceed.

A Defeatist Strategy

The Canadian Environmental Assessment Agency’s Pacific NorthWest LNG Draft Environmental Assessment Report found that that project’s liquefaction plant alone would increase provincial greenhouse gas emissions by 8.5 per cent.

Upstream greenhouse gas emissions associated with the project would represent 10-14 per cent of provincial emissions, based on 2013 levels.

And that is only one of 20 proposed LNG projects on the drawing board in British Columbia, including 18 that have already been granted export licenses by the National Energy Board (NEB).

If only a handful of them ever come to fruition, it will not be long until B.C.’s LNG-related emissions are vying with Alberta’s oil sands emissions for the dubious title of being Canada’s worst king of carbon pollution.

As for the so-called Kinder Morgan project, the NEB did not even consider either the upstream (e.g. oil production) or downstream emissions (e.g. end use of the oil) associated with Trans Mountain’s plan to pipe oilsands bitumen from northern Alberta to Burnaby, for shipping to Asia and elsewhere from Metro Vancouver’s Burrard Inlet.

We have no idea what the added impact of those unquantified extra greenhouse gas emissions will be from the associated increased oilsands extraction and processing activities.

We haven’t a clue what the emissions impact will be from the seven-fold increase in supertanker traffic that that project will impose upon the Salish Sea; or from the shipping of that “liberated” dirty cargo across the world; or from the refining of that bitumen into useable energy in China, America or elsewhere; or from the reshipping of that refined oil to wherever it gets burned; or from the combustion and other end use of that product.

Some might call that progress. I say it’s insanity.

The NEB’s requirement that Trans Mountain must offset the direct GHG emissions generated from the project’s construction, without any consideration of the emission increases that will actually result from what will flow through that new pipeline, is hardly cause to celebrate.

It is rather a bad joke that makes us the punch line: Knock, knock. Who’s there? Kinder. Kinder who? Kinder surprise! We get to pollute, you get to pay, and we get to profit.

Who says the NEB doesn’t have a sense of humour?

Founding a new climate action plan on a prevailing vision to exponentially increase the very thing that we ostensibly hope to decrease — carbon emissions — is patently absurd.

It is tantamount to trying to bail ourselves out of a leaky life raft while poking new holes in its rapidly deflating life support system, and pretending it doesn’t matter.

It is a defeatist “strategy” that essentially assumes we are probably already sunk anyway, so we might as well drink ourselves drunk on the stuff that’s in the barrels and enjoy the ride while it lasts.

We can and must do better.

The High Cost of Low Standards

Those oil companies and consortiums essentially want us to abandon our climate action imperatives in exchange for the benefits they promise from the increased extraction, processing and shipping of natural gas and heavy oil across our precious, pristine and sensitive ecosystems.

Never mind that the main argument for exporting those non-renewable resources is supposedly to increase their value — meaning the oil industries’ profits — in ways that it must be admitted will also make those products more expensive for Canadian consumers.

They want us to further lower their taxes, cut their costs and reduce our environmental standards, to help them compete with their own companies and with each other, in other parts of the world that place no price on carbon and that see no problem with carbon pollution.

They want us to do all that, so that they can sell more Canadian fossil fuel to China and to other less developed countries, which are already literally choking to death on the combustion of those dirty energy resources.

Such is the “gift” to humanity being held out as a fleeting “opportunity” by the only dinosaurs left on Earth.

Their idea of “responsible” and “sustainable” development is Orwellian newspeak of the worst order.

They are trying to persuade us that the “responsible” choice is to act irresponsibly. That “sustainable” development is its opposite.

In what world is it either “responsible” or “sustainable” to blast the earth apart with chemically polluted water, sand and steam, to “free” its geologically trapped hydrocarbons, so that they can be burned at the expense of our warming planet, and by extension, the life it supports?

If that is our idea of “adding value,” we are indeed morally bankrupt.

In what perverse “sustainable” and “responsible” society could it ever make sense to intentionally so debase the environment?

And worse, to fuel its dependency on non-renewable, climate-polluting energy that also threatens its aquifers, aquatic life and human drinking water?

Least of all, when the world is already awash in those petrochemicals. When it is slowly suffocating from its use of them. And when it has so many other clean, renewable and economically rewarding options to meet its incremental energy needs, as the International Energy Agency has so extensively documented.

In B.C. premier Christy Clark’s brave new world, apparently.

She too has bought into the fallacy that we must aspire to compete with those who are already adding to the planet’s atmospheric burdens by sending more of our worst polluting forms of energy to China and elsewhere.

It is a logic that defies logic, except for those who hope to profit from increasing emissions that will escalate global warming.

It flies in the face of the commitment made by 95 countries in Paris last December to cut their emissions, so as to limit global warming to “well below 2°C.”

It makes a mockery of Canada’s lofty appeals to further restrict global warming to just 1.5 Celsius.

It makes the federal government’s improbable commitment to reduce Canada’s carbon emissions by 30 percent below 2005 levels by 2030 virtually impossible to achieve.

And it runs utterly counter to Prime Minister Justin Trudeau’s recent agreement with U.S. President Barack Obama to reduce methane emissions by 40-45 per cent below 2012 levels by 2025 from the oil and gas sector.

As such, it is incumbent on B.C.’s provincial New Democratic Party to stand with the Green Party in fundamentally opposing the acceptance of the LNG pipe dream as a starting point for serious climate action.

In the first installment of this series, I suggested that an independent Auditor General for Climate Action should be appointed by the legislature to annually monitor the government’s progress on climate action.

That individual might also be asked to annually audit and report on the true cost of climate action subsidies and less obvious “tax expenditures” that are today completely invisible.

Taxpayers should know how much more they are being taxed through all manner of taxes, fees, utility rates and other hidden charges that directly relate to measures taken to reduce and offset the added emissions from each sector.

They should also know how much of their money is being devoted to investments and subsidies offered to businesses, to help them remain “competitive” in the new world of carbon pricing.

Indeed, government should be obliged to report on those costs in every provincial budget, just as it does today on its most obvious forms of tax expenditures (i.e. reductions in revenue from delivering government programs or benefits through the tax system, such as special tax rates, exemptions, or tax credits.)

And each year, the legislature should vote on all of those tax expenditures and newly identified “carbon pricing mitigation measures,” just as they do on each ministry’s annual Estimates appropriations for operating programs.

B.C. taxpayers and families should not be obliged to pay more than need be for cutting British Columbia’s carbon emissions. More on that subject in the next two installments of this series.

Martyn Brown was former B.C. premier Gordon Campbell’s long-serving chief of staff and a key architect of B.C.’s climate action plan and clean energy plan. He was the top strategic advisor to three provincial party leaders, and a former deputy minister of tourism, trade, and investment in British Columbia. A frequent contributor to the Georgia Straight, Brown is also the author of the ebook Towards a New Government in British Columbia. Contact Brown at towardsanewgovernment@gmail.com.

Image: Christy Clark/Flickr

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Alberta Conservative Senator Doug Black worries that Canadians are illiterate when it comes to energy and he’s on a mission to educate them.

“If we don’t address the issues facing us now,” he warns, “the prosperity my generation enjoyed will not be enjoyed by the next generation.”

Black is a rarity in the Senate, one of only three senators who were elected by voters in Alberta and then appointed to the Senate by Stephen Harper. Given the discredit that august body has fallen into, though, he may not hold that seat for long.

During the first half of 2015, Black travelled from coast to coast in his quest to educate Canadians about “the development of our energy resources and to discuss ways in which Canada can responsibly maximize its energy resources to benefit all Canadians.”

But it’s an odd crusade. Instead of meeting Canadians where they mostly congregate, in malls, union halls, church basements and community centres, he’s meeting them in posh hotels like the Vancouver Four Seasons, Toronto’s One King West, Edmonton Westin, Montreal Hyatt Regency and Ottawa’s Shaw Centre.

[view:in_this_series=block_1] Black’s Energy Tour

That’s because his “energy literacy tour” isn’t aimed at ordinary Canadians, but at the elites, the people who are already well-educated about energy, at least from the industry perspective. The tour is sponsored by the Economic Club of Canada, whose “audience members are drawn from the most senior levels of Canadian business, industry and government,” the club’s web site informs us.

The site features testimonials from the president of the Canadian Gas Association, the chief lobbyist for the Toronto-Dominion Bank (also a director of the Canadian-American Business Council), and the communications director for an oil and gas service corporation.

They’re certainly up to snuff on energy literacy, which raises the suspicion that the purpose of Black’s meetings with the elite is to promote the industry and further the development of Alberta’s oilsands.

And the Economic Council of Canada has set up blue ribbon panels of industry insiders and experts to help devise strategies to achieve this goal. The Toronto session in April, for instance included executives from Enbridge and Kinder Morgan along with Brian Tobin, vice-chair of the Bank of Montreal (BMO) and former premier of oil-rich Newfoundland and Labrador.

At that meeting Tobin worried that foreign investment is moving to the United States, where the investment review regime is more “flexible” than Canada’s. And Tobin would know about the problems foreign investors face in Canada: BMO acted as an adviser to China’s state-owned CNOOC in its contentious $15.1-billion takeover of oil and gas producer Nexen in 2013.

Kinder Morgan Canada’s Ian Anderson, who was also on the speaker’s bill, said he couldn’t understand why “a couple of hundred” protestors would want to hold up his company’s plans to build a pipeline under Burnaby Mountain. “Where is this opposition coming from?” he asked his audience. “What fear is motivating it?”

But instead of addressing why so many Canadians fear growing oilsands development, the energy elite, with Black in the vanguard, pushed back.

Advancing “Dialogue” on Energy Future

Black, who is one of Canada’s top oil and gas lawyers, has been immersed in the industry for decades and has many leading oil and gas executives as clients. He’s also a senior Alberta Progressive Conservative fundraiser and the party’s former finance vice-president, and he’s not afraid to admit he represents Big Oil in the Senate.

“One of the reasons I ran for the Senate,” he states on his web site, “was to advance a national dialogue on our energy future.” But is it a monologue rather than a dialogue he’s advancing?

Black heard his clients venting their incredulity over the way the public was showing such intense opposition to energy infrastructure, as Alberta Oil magazine explains. How could the public be so ignorant as to not see the connection between energy development and prosperity, the oil executives demanded to know.

So Black set out the make the connection. In 2009 he co-founded the Energy Policy Institute of Canada (EPIC), an organization with “a singular focus on one task: to draft an energy strategy.” It was almost like a service to his clients and the industry.

This rather benign sounding goal masked the real purpose of the organization, which Linda McQuaig saw as “a lobbying vehicle for dozens of extremely wealthy, powerful fossil fuel companies … all hell-bent on developing Alberta’s tar sands.”

Members included the Canadian Association of Petroleum Producers, Canadian Energy Pipeline Association, Canadian Gas Association, EnCana, Imperial Oil, Shell Canada, TransCanada Corp., and many others.

Industry Drafting Legislation

The group released its strategy in 2012 after three years of discussions and meetings with various governments and industry interests. It was pooh-poohed by the corporate media, but an analysis by the ForestEthics Advocacy Association reveals that the oil industry — through EPIC — helped write the rules “that now restrict public participation on the environmental impacts of tar sands expansion projects.” ForestEthics documents the profound impact the EPIC report had in at least one crucial area of energy development — government regulation.

EPIC recommended that the “federal government must develop regulations that restrict participation in federal environmental assessment reviews to those parties that are ‘directly and adversely affected’ by the proposal in question.”

It also recommended that “the relevance and credibility of evidence presented for environmental assessments must be explained.” This precise language is now found in the Canadian Environmental Assessment Act 2012, on the National Energy Board’s website, and on the National Energy Board Application to Participate Form, ForestEthics notes. It’s just one example of many in the report.

Such a cooperative government response could be due to the efforts of EPIC’s co-chair, Bruce Carson, a long-time Tory insider who had been a senior aide in Harper’s PMO. Carson brought EPIC’s’ document to Nigel Wright, Harper’s chief of staff, who promised to read it “over the weekend” and urged Carson to “feel free to give me a call at any time.”

Carson reported back to Black that he’d briefed Wright, who “seemed generally supportive.”

“Excellent, Need Nigel on side,” Black responded.

A year later, Carson, who earned a $120,000 annual honorarium for his work, was charged with engaging in illegal lobbying and influence peddling, because he broke the five-year ban on lobbying after leaving the government’s employ, among other charges. Meanwhile Black became a senator and took his seat on the Senate Committee on Energy, the Environment and Natural Resources, where he could continue his work.

He outlined his mission in his maiden speech to the Senate:

All interested parties now agree that on an urgent basis we must find ways to export our energy products and to help educate Canadians about the importance of market access. For success, we need Canadians to accept that their future prosperity depends on our solving this problem. We must ensure that governments and energy producers have the social licence needed to make the critical infrastructure projects.

Black’s History of Industry Lobbying

Black has fronted for Big Oil before. In 2002 he was chief lobbyist for the Canadian Coalition for Responsible Environmental Solutions, a group that appeared on the scene several months before the Jean Chrétien government prepared to ratify the Kyoto Accord. The CCRES was created by Burson-Marsteller, the PR giant that specializes in creating astroturf organizations.

The organization was framed as “a broad cross-section of Canadian industry,” but the money came from Black’s clients in Big Oil. CCRES pulled all the stops in its efforts to derail Kyoto, including expensive saturation TV ads in Ontario. But it couldn’t prevent Chrétien from proceeding with ratification.

Not that it mattered. A decade later, Black’s party was in charge in Ottawa, Kyoto was ancient history, and Black was still furthering Big Oil’s interests, this time by educating Canadians about the need for oil pipelines if we want continued prosperity.

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Oil companies and fossil fuel investors seeking further developments in the Alberta tar sands have been dealt another setback with the publication of a report showing producers lost $17.1 billion USD between 2010-2013 due to successful public protest campaigns.

Fossil fuel companies lost $30.9 billion overall during the same period partly due to the changing North American oil market but largely because of a fierce grassroots movement against tar sands development, said the report — Material Risks: How Public Accountability Is Slowing Tar Sands Development.

A significant segment of opposition is from First Nations in Canada who are raising sovereignty claims and other environmental challenges, added the report, which was produced by the Institute for Energy Economics and Financial Analysis (IEEFA) and Oil Change International (OCI).

“Tar sands producers face a new kind of risk from growing public opposition,” Tom Sanzillo, director of finance at IEEFA, and one of the lead authors on the report, said. “This opposition has achieved a permanent presence as public sentiment evolves and as the influence of organizations opposed to tar sands production continues to grow.”

Opposition to tar sands unexpected

Steve Kretzmann, executive director of Oil Change International, added industry officials never anticipated the level and intensity of public opposition to their massive build-out plans.

“Public opposition has caused government and its administrative agencies to take a second and third look,” Kretzmann said. “Legal and other challenges are raising new issues related to environmental protection, indigenous rights and the disruptive impact of new pipeline proposals.”

He added anti-pipeline protests are keeping carbon in the ground, and changing the bottom line for the tar sands industry. 

“Business as usual for Big Oil – particularly in the tar sands – is over,” Kretzmann said.

The report said market forces and public opposition have played a significant role in the cancellation of three major tar sands projects in 2014 alone: Shell’s Pierre River, Total’s Joslyn North, and Statoil’s Corner Project.  

“Combined, these projects would have produced 4.7 billion barrels of bitumen that would in turn have released 2.8 billion metric tonnes of carbon dioxide (CO2) into the atmosphere,” the 28-page report said. “This is equivalent to the emissions of building 18 new coal plants that would last 40 years each.”

Growing First Nations voices take tar sands story international

“I think it’s pretty inspiring and also uplifting to see the recognition of First Nations that have been very vocal and have articulated their staunch opposition to tar sands expansion in our traditional homelands,” Melina Laboucan-Massimo, a Greenpeace Canada campaigner from the Lubicon Cree, told DeSmog.

Laboucan-Massimo and other representatives from local First Nations like Eriel Deranger from the Fort Chipewyan have been campaigning for years to bring greater awareness to the human health and environmental impacts of rapid tar sands expansion. Laboucan-Massimo said she spent a lot of energy campaigning outside of Canadian borders, speaking to parliamentarians in the U.K., across Europe, as well as to U.S. Congress and the shareholders of major companies.

“We wanted to tell the story on the outside and really put that pressure on the Canadian government to do its due diligence and be accountable to its own citizens,” she said.

“I think that’s a part of what’s been effective in this campaign of accountability, that people not only in Canada but around the world were asking what is happening in Canada? Why is Canada such a climate laggard? Why is the Canadian government not listening to the voices of their own people?”

The growing environmental movement, she said, has been better at incorporating the voices of local First Nations living on the front lines of the tar sands. The movement also now represents a much wider range of social perspectives.

“When we work in coalitions – the environmental movement, First Nations and the labour movement – there’s such a convergence of diverse voices…we’re really starting to see growing public accountability and public opposition being seen and taken seriously.”

She added the future of the tar sands under the Harper government is “tenuous” because “you can see he has a very pro-tar sands agenda,” she said. But, she added, even five or 10 years ago very few Canadians knew what the tar sands were and had little awareness of the switch from conventional to unconventional, extreme forms of energy.

“Now people are quite aware that that’s what been happening and there has been a public dialogue created on that and there has been more pressure on the government to really address the environmental concerns, the health issues and indigenous rights violations. I feel like people really are a lot more aware of these issues now than in the past.”

Keystone XL delay shows tar sands "weakness"

The report says the proposed Keystone XL tar sands pipeline is one of the most talked about North American energy and political issues of the era.

“Once thought inevitable, the project and Canada’s plan to expand tar sands production have been confronted by an accumulation of economic and political risks creating a veritable ‘carbon blockade.’”

Project delays are taking a financial and political toll on proposed tar sands projects, the report said.

“The delays and cancellations have exposed the fact that tar sands investments, once thought to be highly lucrative, are showing signs of financial weakness. With growing public awareness and market hesitancy, expansion of tar sands production in Canada will remain contested terrain for the foreseeable future.”  

The report also noted that the tar sands sector faces a growing constellation of risks as project economics become pressured by low oil prices and shrinking revenues, rising costs, smaller profit margins, tougher capital markets, transport constraints, environmental challenges and protectionist legislation.

Nine of 10 leading tar sands producers in Canada have underperformed the stock market in the last five years, it said, adding industry experts have recently downgraded their outlook for future tar sands production.

“Tar sands pipeline campaigns are a recent example of how public advocacy efforts can alter capital investment decision making,” the report said.

“The Keystone XL campaign has managed thus far to delay a final governmental decision on the project while raising public awareness about the environmental costs of tar sands development.”

“These citizen interventions have resulted in increased diligence by government agencies with public health and environmental mandates, impaired the project development process of the capital markets and mobilized a permanent, political constituency in support of alternatives to tar sands expansion.”

The report noted there was an expectation that the TransCanada Keystone XL pipeline would receive necessary approvals quickly when it was originally proposed in 2008 and be up and running by late 2011.

“Time and events changed this storyline,” the report added. “By 2011 Russ Girling, the CEO of TransCanada, said ‘There is no way we could have ever predicted that we would become the lightning rod for a debate around fossil fuels and the development of the Canadian oil sands.’”

According to a report in the Guardian, Canada has staked its energy future on a massive expansion of tar sands, which hold the world’s third largest reserve of crude after Saudia Arabia and Venezuela.

“But the huge amounts of water and solvents needed to extract oil from bitumen dramatically boost greenhouse gas output and, on latest production forecasts, will increase Canada’s CO2 emissions by 56 megatonnes by 2020,” the Guardian said.

Image Credit: People's Climate March by Zack Embree

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Ken Wu is executive director of Majority for a Sustainable Society (MASS) and co-founder of the Ancient Forest Alliance. 

For Part 1 of this article, click here.

In the first part of this article, I described what specific challenges the climate movement faces when confronting its own limiting tendencies as well as industry funded public relations campaigns. In this second part I outline what I think are four essential ways the climate movement must evolve in order to overcome these obstacles.

FIRST, we must become a lot more political, in the sense that it’s fundamentally the laws, policies, and agreements that shape our greater society and economy. And it’s our society and economy which are the foundations of our personal lifestyles. What is available, affordable, practical, and possible in our lifestyles is largely a product of the society in which we live – what clean energy sources exist at what price relative to dirty energy, how available public transit is, how well or poorly our cities are designed for walking, cycling, and accessing our needs, how energy efficient our buildings are, and so on.  

No individual is an island unto himself; the way we live is fundamentally shaped by the economy and society in which our lifestyles are nested.  

Western individualism sees each person as an island divorced from society and economic circumstances. As a result, many North American environmentalists instinctively emphasize efforts towards personal lifestyle purity as a fundamental remedy to environmental problems despite being in a system that, at this time, is based on fossil fuels in almost every regard (hence the need for larger societal change). Needless to say this is a virtually impossible task that plays well into the hands of fossil fuel advocates who are bound to find “inconsistencies” and “hypocrisy” in the personal lifestyles of all those who care about the fate of the planet![view:in_this_series=block_1]   Government regulations that shift our energy choices at their sources, that is, at the point of resource extraction or energy production, from dirty to clean energy, or from low to high energy efficiency in our technologies, will automatically be incorporated into the lifestyles of all consumers, whether or not they are environmental idealists.   In addition, studies show that voluntary or “non-compulsory” methods to reduce carbon emissions have a minor impact and real progress occurs through regulations and tax shifting. If we want to change both corporate and individual behaviour, putting an escalating price on carbon, banning coal-fired plants, and strengthening regulations and standards are vital.

That’s not to say we shouldn’t pursue personal lifestyle reforms – just that if the goal is to actually change the outcome for the climate, the major leaps forward will come through regulations, government policies, and political action.   SECOND, as much as the climate change movement emphasizes the problems, we must also emphasize the solutions and a positive vision of a sustainable, low carbon society. That is, how a low carbon society would support ramped-up green businesses and jobs, create more livable cities, foster greater community, improve our health, support global peace and stability, and sustain the natural diversity and beauty of the planet.    After repeatedly hearing about impending disaster, many people tune out. We can’t psychologically stay in emergency mode forever.  If the “inconvenient truth” is always a negative crisis message, it’ll be easier to hear the “reassuring lies” over the long run. However, if the truth is also a positive alternative vision – that we can have a better quality of life in a sustainable society based on clean energy, efficiency, smart planning and liveable communities – it’s a message most people can stay with and promote. That’s not to downplay the need to get the facts out about the real crisis – just that we must lead our message with positive solutions more often.   THIRD, our positive solutions must emphasize the economy, on how people can make a living. The economy is usually the top concern in public opinion polls, with the environment often lagging far behind except in limited “peak years” like 1990 and 2006. As long as the environmental movement fails to emphasize how people can realistically make a living in lieu of stopping destructive industries, it will stay in the margins, always too weak to transform the status quo. Publicly emphasizing the viability of a clean and efficient economy will help expose the falsehood that there is no practical alternative to fossil fuels, a “fact” often assumed to be true due to the alternative’s lack of exposure.   The basic fact also remains that if we don’t significantly shift our economy towards efficiency and renewables, the factors causing the problems will only continue – that is, our huge appetite for energy and jobs in the absence of clean energy alternatives will ensure that burning fossil fuels will always have the popular support to continue until it triggers runaway global warming.   LASTLY, the climate movement must become broader-based, aiming to mobilize the mainstream public, not just progressives and environmental activists – that is, we must actively engage green businesses, unions, faith groups, scientists, farmers, First Nations, and a larger diversity of ethnic communities, among many others. Small groups of angry “activist superheroes” will not save the planet – only an informed, large-scale movement that represents a majority cross-section of society will have the power to fundamentally change it. This will naturally undermine the fossil fuel advocates’ PR claims that the movement consists primarily of “others” who are different from regular Canadians.   The current climate resurgence will be different than the previous surge in 2006. Movements naturally evolve, and hopefully in a way that allows them to make sufficient inroads to change the fundamental outcomes. In 2013, I believe that we’ll see the return of hope.

For Part 1 of this article, click here.

Image Credit: Ken Wu at McLaughlin Ridge by TJ Watts from Ancient Forest Alliance.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Ken Wu is executive director of Majority for a Sustainable Society (MASS) and co-founder of the Ancient Forest Alliance. Read Part 2 of this series here.

After years of apathy and political inertia, North America’s climate sustainability movement has found itself in the midst of a timely resurgence, as is evident by the recent massive expansion of Bill Mckibben's 350.org movement against the Keystone XL pipeline.

With climate change regaining its footing as a central political issue, now is the time to pressure governments to enact the needed laws, policies, and agreements required to curtail runaway global warming. But unless the moment is seized right, climate action will be stymied again – and there is no time to wait for another opportunity.

During his State of the Union address on February 12, 2013, US President Barack Obama stated:

"For the sake of our children and our future, we must do more to combat climate change…We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science – and act before it’s too late."   Recent studies project that the Earth’s average temperature is on course to rise over four degrees this century, far beyond the two degree rise when “runaway” global warming kicks-in due to positive feedbacks that make it extremely difficult to halt.

The question now is if the climate movement will grow strong enough, fast enough, to ensure sufficient government regulations, carbon pricing, policies, and international agreements to stop runaway global warming.

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The climate movement faces two likely obstacles when tackling global warming issues today: PR pushback from the fossil fuels industry and the movement’s own internal shortcomings. Addressing these issues simultaneously will require a broad-based response that coordinates political action, positive solutions and a smart economic emphasis.

Understanding the Obstacles   It’s important to recognize that the climate movement will have to face up to the influence of industry profit. Highly coordinated campaigns designed by Big Oil and their political backers are crafted to influence both public understanding of complex issues as well as policy creation.

Recent research, for example, has uncovered the efforts of the Koch brothers, US oil industry billionaires, to deny the scientific legitimacy of global warming, to dismantle regulatory bodies like the US Environmental Protection Agency, and to paralyze action on climate change at the international level.   In Canada, campaigns like Ethical Oil and the federal government’s depiction of environmentalists as ‘foreign funded’ ‘extremists’ both operate like the larger climate denial machine, which distracts and detracts from fact-based arguments by calling the credibility of environmental organizations, or individuals, into question.

But you’ll also hear a number of other arguments that seem to be becoming standard fare in climate denial or pro-fossil fuel talking points. You’ll hear, for example:

• that fossil fuels are indispensable for a flourishing economy flush with employment opportunities
• that alternative energy, while a worthy ideal, is just not viable
• that putting a price on pollution through mechanisms like a carbon tax would dismantle the economy
• that even the dirtiest fossil fuels in North America, like Alberta's tar sands, are more environmentally and morally superior than conventional oil from other nations with poorer human rights records
• that emerging technologies will make all fossil fuels clean and safe, including coal and bitumen

 

It's along this last point's line of thought, or wishful thinking, that you see the emergence of "clean coal" and "ethical oil," all of which rely more on rhetorical constructions than breakthrough technologies.

Room for Improvement

While the public relations campaigns launched by fossil fuel funds are undermining progress for climate sustainability, the environmental movement’s own entrenched tendencies might be partially to blame.

Some of these limiting tendencies are, for example:

• An underlying emphasis on voluntary, personal lifestyle reforms instead of the primacy of societal change through politics, laws, regulations and policies that reshape our economy, land-use, cities, and infrastructure.
• Being the movement of “no” or “stop”, that is, too much negative emphasis with proportionately less attention to solutions and alternatives.
• An insufficient focus on the economy, on how businesses can flourish and people can have jobs when destructive industries are restricted or phased-out.
• Aiming to mobilize the “same old, same old” minority, the 20% of strong progressives and environmentalists in society – or the minuscule fraction of activists among them.

  Seeing the Way Forward

By surmounting its own limiting tendencies, the movement can counteract many of the fossil fuel industry's PR attacks and also move out of the margins, beyond the turf of mainly environmental idealists and activists, into a force that moves the much larger mainstream public with the power to change the status quo.

To read Ken's thoughts on how the climate movement might evolve to overcome these challenges, stay tuned for Part 2 of this article.

Image Credit: Ken Wu beside a fallen redcedar near Port Renfrew on Vancouver Island by TJ Watts from Ancient Forest Alliance.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.