Despite trying to find a balance between economic and environmental interests, the Trudeau government’s balancing efforts during its first term – particularly its decision to purchase the Trans Mountain Pipeline and put a price on carbon – only aggravated both sides. Environmentalists believed that the pipeline concession was a death blow to a viable climate plan, while proponents of the oil and gas sector argued that the “carbon tax” would increase the cost of everything and fail to reduce emissions.
Canada thus faces an extremely difficult challenge ahead in reconciling these competing interests. It wants to do well by the world in terms of contributing to climate change mitigation. And yet it also wants to accrue some economic benefit from being in the fortunate position of sitting atop the world’s third-largest oil reserves (169 billion barrels, 10% of the world’s oil).
The Canadian government also wants to achieve reconciliation with First Nations communities. While some of these communities see commercial opportunities in oil and gas development, others vehemently oppose the sector. Moreover, it wants to unify a country which is deeply divided along provincial lines, with Québec and B.C. effectively blocking Alberta oil from reaching the East and West coasts, respectively.
So, what is to be done? I do not claim to have all the answers. But if the Trudeau government sticks with the same approach as before, it is destined to fail.
The previous approach was kneecapped by its unnuanced interpretation of the relationship between the economy and the environment. The Trudeau government’s mantra became “the environment and the economy go hand in hand!”. This adage was rammed down Canadians’ throats at every turn.
The problem is that this is not always true. What’s good for the economy is not always good for the environment, and vice versa. While it is possible to lessen the environmental footprint of growth (in fact, for every dollar of GDP growth today, Canada only emits 65% as much CO2 as it did in 1990), there are nevertheless limits to this trend. In some spaces this type of win-win relationship between economy and environment is simply unattainable.
Attempts to reconcile climate action and growth is a lost cause in the oil and gas sector in particular. Even if it were possible to achieve carbon-neutral production (a nearly impossible target in the case of Alberta bitumen), there is the additional challenge of decarbonizing the transport of oil and gas to market.
Pipelines currently emit the equivalent of 7.1 million tons of CO2 in Canada, more than all emissions from domestic aviation. We would also have to neutralize leaks, known as fugitive emissions, which amount to astonishing 54 million tons of CO2, or 7.5% of Canada’s total emissions. In addition, we would then need to decarbonize oil and gas consumption within the end-use sectors such as transport and heating, which account for 28% and 11% of Canada’s emissions, respectively. Oil and gas extraction alone accounts for nearly 15% of Canada’s total, and these emissions are expected to increase in the coming years. In short, any form of support for oil and gas – be it regulatory approval of a pipeline, or a fossil fuel subsidy – poses a direct challenge to climate action.
By the same token, most aggressive climate mitigation policies – such as putting a price on carbon or investing in renewable energy – pose a threat to the viability of the oil and gas sector. In this particular instance, what’s good for the economy is not good for the environment.
However, that is not to say that there’s no possible win-win scenario, even in the Prairies. In fact, numerous opportunities await, with four obvious areas of opportunity: a) renewable energy; b) regenerative agriculture; c) oil well reclamation; and d) alternative fuels.
The renewable energy opportunities in Alberta and Saskatchewan are exceptional. The potential for wind power, solar energy, and geothermal are orders of magnitude greater than presently installed capacity of those energy technologies. They could be expanded with the aim of generating tens of thousands of green jobs and billions of dollars in economic activity over the next decade.
The Prairie provinces are also agricultural powerhouses. While agriculture presently emits about 8.4% of Canada’s greenhouse gases, the switch to regenerative practices like no-till crop production or grassland conservation grazing have potential to sequester enormous amounts of CO2. That would offset some of those emissions, all while producing high-value food commodities and generating other ecosystem benefits, relating to biodiversity, soil quality and watershed management.
After decades of oil and gas development, Western Canada has a significant problem on its hands, with 139,000 inactive or abandoned oil wells requiring clean-up. Alberta’s share of the clean-up will cost $260 billion. As Regan Boychuk and Avi Lewis recently pointed out, this could be interpreted as a $260 billion opportunity. One of the obvious benefits is that the same jobs which were created by the drilling industry could be sustained by substantial investments in the reclamation industry. Since reclamation involves restoring topsoil and re-establishing vegetation, these projects would also support additional carbon sequestration.
Finally, alternative fuels offer tremendous promise in the Western provinces as well, particularly since they are linked to existing sectors such as agriculture, forestry and fossil fuels. There are a number of different kinds of low-carbon alternative fuels.
Biofuels are in theory carbon-neutral because they are made using crop by-products or other materials, such as forestry residues and waste from the agri-food sector. They thus return CO2 to the atmosphere in a cyclical manner when burned – as opposed to burning fossil fuels, which just pumps additional CO2 in the atmosphere.
Hydrogen is another proposed alternative fuel for the transport sector. There is presently a carbon-neutral trucking pilot project in Alberta underway. It is fuelled entirely by hydrogen, which only emits water when burned.
The most common source of hydrogen is fossil fuel (of which there is no shortage in Western Canada!). One recent scientific effort has found a way to extract hydrogen from oil deposits underground, leaving the carbon dioxide underground as well. This is also useful for a third kind of alternative fuel known as electrofuels. They combine hydrogen with carbon dioxide sucked out of the air to produce synthetic hydrocarbons that mimic fossil fuels, but are carbon-neutral.
In many ways, these four opportunities are already being explored. The renewable energy sector is red hot in the Prairies. The expansion of no-till agriculture across the Prairie provinces, which started decades ago, has increased yields, reduced fertilizer and fuel costs and continues to support the drawdown of CO2. This year, there were more decommissioned wells than drilled wells in Alberta. One report on bioenergy found that between 2007 and 2014, bioenergy projects in Alberta produced a savings equivalent to 11 million tons of CO2 and gave rise to a $2 billion dollar industry supporting thousands of jobs.
But there’s a catch. These climate mitigation and economic development opportunities will only be truly maximized if they receive the requisite levels of support from the rest of Canada.
The federal government in particular has an essential role to play. Instead of extending olive branches in the form of pipelines, the feds should get out of the oil business and focus their efforts on achieving a genuine, just transition led by the innovative people of the Prairies. Instead of merely paying lip service to incentives for clean energy through tax breaks, Canada ought to fork over major investment dollars – in research, development and, in particular, support for new infrastructures required for this transition. Instead of centring its economic development strategy on getting Alberta oil to tidewater, the Trudeau government ought to recognize the vulnerabilities lurking behind high-cost synthetic bitumen in a very volatile world market. Finally, the government should support indigenous leadership in climate change mitigation, particularly by fully implementing the 94 calls to action laid out by the Truth and Reconciliation Commission.
The post-2014 downturn in Alberta has exacerbated sentiments of Western alienation. The resurgence of secure, well-paying jobs in the region could help reduce these tensions. The Trudeau government must recognize the opportunity before it. It needs to tackle economic development, national unity and climate change all at once. There’s not enough time left to keep making the same mistakes as before.
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