Alberta Politics
Wind turbines in Southern Alberta, from cover art from the Corporate Mapping Project’s energy outlook report.

Review of Canada’s energy systems unlikely to cut through noise generated by pipeline hysteria

Posted on May 02, 2018, 1:27 am
6 mins

The furious debate about the merits of current and future pipeline projects underscores the need for an evidence-based long-term energy strategy for our country, the conclusions of a new review of Canada’s energy systems suggest.

Alas, the report released yesterday by the Corporate Mapping Project and its partners at the Canadian Centre for Policy Alternatives and the Edmonton-based Parkland Institute is likely only to intensify a debate that has become highly politicized and, in some quarters, nearly hysterical.

Anyone who doubts this need only consider the rhetoric used to attack the University of Alberta’s plan to award an honorary degree to renowned biologist and environmentalist David Suzuki, whose views on oilsands extraction have literally been characterized on social media as treasonous and terroristic in the past few days.

Even commentary in so-called mainstream media is not that far removed from what’s spewing out of the darker corners of the Internet. A Postmedia columnist last week managed to squeeze virtually every United Conservative Party anti-Suzuki talking point, no matter how silly, into a single overwrought rant. She even added a troubling new one, a slap at Hungarian-American financier George Soros, a regular target of Eastern European neo-fascists and U.S. conspiracy theorists.

Licia Corbella’s screed also tendentiously attempted to tie Premier Rachel Notley’s pro-pipeline NDP government to Dr. Suzuki’s views, something of a low even by recent Postmedia standards.

The Corporate Mapping Project report by earth scientist David Hughes may attempt to cast some illumination on the facts underlying this debate, but it is not likely in the current overheated circumstances to get much attention except as the work of “enemies” of the oilpatch who “want to destroy” Alberta jobs.

Indeed, this is already happening. Also last week, the Alberta operative for the supposedly non-partisan Canadian Taxpayers Federation, which dutifully stays in the United Conservative Party and federal Conservative message box in its rhetoric, attacked the Corporate Mapping Project as the work of “anti-oil research activists.” In a blog post, Colin Craig demanded the federal government stop funding the project.

Well, I suppose you can make that case if you assume anyone who criticizes, or even analyses, anything the fossil fuel industry does is “anti-oil.” But given its self-professed mandate, it seems odd the CTF wouldn’t be troubled by the potential costs of industry strategies to maximize profits as fossil fuel extraction enters its twilight years, as a case can be made is happening. You’d think a “tax watchdog” would be worried about taxpayers having to bear the multi-billion-dollar cost of cleaning up abandoned wells!

That said, I admit I was surprised when the Social Sciences and Humanities Research Council of Canada agreed in late 2015 to fund the CMP with a six-year, $2.5-million grant – a decision that was finalized in the final months of Stephen Harper’s Conservative government.

It was clear from the get-go this was not an advocacy campaign for Big Oil. That, in itself, was an oddity in a country at a time it was becoming normal for government climate policies to be cooked up in the boardrooms of Calgary oil lobby groups, as happened with B.C.’s “climate leadership plan” under former premier Christy Clark’s Liberal government.

Indeed, some of the conclusions of Mr. Hughes’ latest research do run counter to the prevailing narrative spun by the oil industry and its Western Canadian advocates. Among them:

  • Expanding oil and gas production in line with National Energy Board estimates means the rest of the Canadian economy will have to reduce emissions by 49 per cent by 2030, and 85 per cent by 2040, to meet Canada’s agreed-upon emissions reduction targets. Needless to say, this is not likely in the time available!
  • The Line 3 and Keystone XL pipelines will provide more than double the export capacity of the controversial Trans Mountain Expansion Project – and meet foreseeable export needs under the Alberta Government’s oilsands emissions cap.
  • The argument there is an “Asian price premium” is likely false. “Canadian heavy oil is discounted because of its inferior quality and due to the cost of transportation.” As a result, exports through the Trans Mountain Pipeline will likely command a lower price than exports to the U.S. Gulf Coast refineries.
  • Pipeline expansion is unlikely to result in many new jobs.
  • And Canada, busy exporting its highest-quality petroleum resources, has no plans for its own long-term energy security.

“This is a critical moment to develop a viable energy strategy, based on science and evidence, to address our future energy needs and emissions-reduction targets,” Mr. Hughes argues in the report.

This may make sense to many Canadians, but it’s unlikely to be viewed with much sympathy in the boardrooms of Calgary’s fossil fuel companies or the backrooms of the political parties their Astro-Turf organizations support.

8 Comments to: Review of Canada’s energy systems unlikely to cut through noise generated by pipeline hysteria

  1. Farmer Brian

    May 2nd, 2018

    The pipeline debate to me is a symptom of a larger problem. That problem is Canada’s inability to create framework under which large projects can be completed in a realistic time frame. Justin Trudeau and Rachel Notley brought in a carbon tax telling Canadians that it would be good for both the environment and the economy. That it would give Alberta the social licence to build pipelines. It made no difference and now the government is going to buy into the pipeline to keep it moving forward. As for the carbon tax, pollster Janet Brown did an extensive poll in Alberta for CBC(there have been many articles on it in the last week on CBC) and one of the interesting findings was that 66% of Albertan’s are still against the carbon tax and want it eliminated. So while increased oil and gas production will make reducing ghg emissions more difficult, so to will lack of consumer buy in. Look at the Ford motor company, they just announced that they are eliminating passenger cars and instead concentrating on the crossover, truck and SUV market because that is what people want to buy. Myself as a farmer, I have invested in new equipment that increases my efficiency by 5-8% but there is nothing on the horizon that will increase it by 30%! Enjoy your day

    Reply
  2. Bob Raynard

    May 2nd, 2018

    It is not surprising at all that the CTF would be unconcerned with the cost of dealing with orphan wells. Given that their ‘solution’ to Alberta’s deficit includes putting off capital projects until some later magical date, their plan for orphan wells is likely a mantra ‘now is not the time…’

    Reply
  3. Simon Renouf

    May 2nd, 2018

    DC, I think this is key: “The argument there is an ‘Asian price premium’ is likely false.” This is a fascinating subject, and I think it’s the reason why KM will be walking away from its project. Most Chinese crude imports are light crude from Africa, Russia and the Middle East. Venezuela’s heavy oil has moved into China’s top 10 suppliers, but it is difficult to get a handle on what China pays for Venezuelan heavy oil, in part due to China’s policy of allowing Venezuela to pay interest on its loans from China in the form of oil. It’s likely that despite being a member of OPEC Venezuela is discounting its shipments to China. But even if there is no discount, on any given day the listed price of Venezuelan heavy oil is even lower than Canadian heavy oil, so Canadian heavy oil would not currently be competitive in Shanghai. Once you add on pipeline and tanker levies it would appear to be a non-starter.

    Reply
    • Simon Renouf

      May 2nd, 2018

      Incidentally, while poking around at market oil prices, I noticed that while Western Canadian Select (WCS), which is dilbit, does sell at a substantial discount from WTI, upgraded dilbit is selling for a much higher price.

      Today WTI is at US67.69. WCS is at $48.85 (72% of WTI), but Albian Heavy Synthetic (AHS) is at $65.85 (97% of WTI).

      AHS is a partially upgraded dilbit produced from the Scotford Upgrader. Doesn’t that mean that the real path to higher prices for Alberta Oil is to increase upgrader capacity? Interestingly that’s pretty much what Unifor, Canada’s largest private sector union and largest energy industry union, has been saying for years.

      Reply
  4. Bza

    May 2nd, 2018

    That was a well-researched report, though there would be a few aspects that did not get a mention. There is a strong possibility that one of the three pipeline expansions (or perhaps two or three) may not get built. The woes of Trans-Mountain are well known, but Keystone and Line 3 in the states have also been subjected to legal rulings and court challenges that could also derail those expansions.

    If all three did get built, it’s also possible that they may only be in peak usage for the next 10-15 years, as it’s also possible that electric vehicles could be in widespread use by the late 2020s or early 2030s. This may result in a gradual decline in oil sands output from the 2030s onwards, making it a bit more possible for Canada to reach its international targets for 2050.

    The strong possibility that there will be battery storage for renewable energy also wasn’t mentioned, this may further increase the potential of renewable energy.

    Definitely agree with the conclusion that energy efficiency and conservation will be extremely important and can’t be emphasized enough.

    Reply
  5. Bill Malcolm

    May 2nd, 2018

    The kind of mindless environmental denial spewed by the oil industry and its press acolytes and paid-for “independent institutes” mirrors the kind of comments I read on my hobbyist US websites. The average uneducated dolt stands up on its hind legs and spews venom at “socialists”, labeling progressive attempts to limit pollution as top down intellectual dominance of their tiny minds, and by golly nobody is going to tell them how to behave or think! No sir! Pass the F150. Make it two.

    Alberta seems captured by similar thinking. Don’t bother me with the facts, ‘cuz they’re fake. The Good Lord provided the Earth to pillage, and by golly that’s what we’re going to do. The climate hasn’t changed since Moby Dick was a minnow, rant, whinge, gripe, complain and all you pointy-head scientists are wrong!

    One thing I’ve noticed is the rising number of women right wing pundits eager to fantasize. Global TV manges to have a few of the more vitriolic ones on every weekday morning, acting like shouting louts drowning out differing views, looking pityingly on those who beg to disagree. And Postmedia attracts more than their fair share apparently – I read no newspapers. It’s a phenomenon that befuddles me. Like Notley they’ll do anything for money and power, just like men. They may claim college journalistic credentials but seem unable to realize that such confers no knowledge in scientific matters. Typical conservative high handedness. No, women may not control their bodies, and 1898 was a good year when people knew when to tug their forelock to their societal betters such as the clergy and local mill owner and obeyed without question. The exact thing they complain is being forced on them by intellectuals today, but they seem unaware of the dichotomy.

    The lemmings are abroad, gathering in ever-agglomerating clumps for the rush over the cliff, determinedly oblivious of the evidence. Too many people in this world. I give up. Good thing I’m old enough that I may with luck miss the cataclysm, having passed on before that event.

    Reply
  6. Hurtin Albertan

    May 3rd, 2018

    There’s a good writeup on this report by Andrew Nikiforuk over at the Tyee. His main point is the astounding decline in government revenues from fossil fuel production due to criminally low royalties and corporate taxation. Peter Lougheed must be rolling in his grave.

    Reply

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