Globe and Mail European Bureau Chief Eric Reguly is branding Prime Minister Justin Trudeau a winner in the climate hypocrisy sweepstakes, in a blistering opinion piece that puts the PM’s climate advocacy side by side with his government’s full-scale support for bitumen pipelines and liquefied natural gas megaprojects.
“Climate change is a clear and present danger, he says. Left unchecked, it will have dire consequences for the environment, the global economy, and humanity itself,” Reguly writes. “In came plans for a carbon tax, which is now being imposed on any province without its own emissions pricing,” with rebate cheques due to begin hitting Canadians’ mailboxes next year.
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“So far, so good,” Reguly writes. “But now look at what’s happening.”
Ottawa approved the Trans Mountain pipeline expansion less than a year after signing the Paris Agreement, then bought the pipeline out after Kinder Morgan abandoned the project. Along the way, Trudeau told a fossil audience in Houston that “there isn’t a country in the world that would find billions of barrels of oil and leave it in the ground while there is a market for it.”
Then, “in yet another Jekyll-and-Hyde moment in Trudeau’s initiatives on the climate file, he came out in support of the C$40-billion LNG Canada project in October,” Reguly writes. “Owned by a consortium of oil and gas companies led by Royal Dutch Shell, the project will take gas from the Montney fields on the Alberta-B.C. border and send it by pipeline to a terminal near Kitimat, BC, where it will be turned into liquefied natural gas and shipped to Asia.”
The problem with that, he explains, is that LNG Canada “is a carbon hog” that threatens British Columbia’s greenhouse gas reduction targets at best, or will “blow the province’s entire carbon budget” at worst. Reguly cites figures from Marc Lee, senior economist at the Canadian Centre for Policy Alternatives, that show the project consuming 23 to 31% of B.C.’s carbon budget by 2030, 69 to 92% by 2050.
“When then prime minister Stephen Harper yanked Canada from the Kyoto climate accord in 2011, environmentalists labelled him a fossil,” Reguly concludes. “Perhaps, but he wasn’t a hypocrite. He knew Canada had zero chance of meeting carbon reduction targets as long as it remained a resources-based economy, and he was right. Trudeau is promising a greener future, but his enthusiasm for carbon-intensive projects belies that image. Canada is still part of the global warming problem.”
“…while there is a market for it.” This is the key misunderstanding of Notley and Trudeau. The price of Canadian crude, in particular the heaviest, sourest blends, is low because no one wants to buy it. The US is producing more crude than they ever have, from fields that were producing during WWII. What do we think will happen when Russia and OPEC start fracking? Iran, Venezuela, Libya, Syria, and Iraq are all experiencing dramatic falls in production, which was the real point of NATO’s wars in the Middle East. What will happen to prices if they were to market into a truly ‘free market’?
Exxon/Mobil Canadian subsidiary Esso now values its Kearl tar sands operation as WORTHLESS for SEC and accounting purposes. Other majors (Statoil, Shell, Marathon Oil) have left Fort Mac and won’t return as there are many other places that produce oil of much higher quality, for much lower cost.
So in what business fantasy world does increasing the supply of a despised, poor-quality crude, in a market flooded with much higher quality product, result in increased demand, and higher prices?
The Calgary oil industry, after quacking for 80 years about the nobility of free enterprise, and the utility of the market, now hope the government, and the rest of the Canada, will shout ‘Mommy’s coming’. This is hysterically funny, and contemptibly hypocritical, but not a rational basis for energy investment or economic development.
Renewables have killed nuclear power and coal mining companies. CCS was never going to solve their problems. Now wind and solar are going to kill the market for crappy crude.