Natural Resources Canada has failed to "hold the oil industry accountable" for taxpayer funding tied to orphan well cleanup and climate mitigation in the sector, NDP MP Charlie Angus says.

The party's natural resources critic wrote to Natural Resources Minister Jonathan Wilkinson on Jan. 27 after recent reports found the federal government's climate change funding for oil and gas companies amounts to little more than fossil fuel subsidies.

In his letter, Angus points to a recent report from the Parliamentary Budget Officer that found over half of Alberta’s funding for orphan well cleanup went to financially stable companies he said should be able to take care of the wells without federal cash.

In an emailed statement, Natural Resources Canada ministry spokesperson Joanna Sivasankaran said: “As a condition of the $1.7 billion to clean up orphan wells, provincial jurisdictions were required to improve their regulations to eliminate future oil well liabilities, and added that the federal government “believes in the polluter pays principle.”

Another federal program was said to provide financial aid to help struggling oil and gas companies reduce greenhouse gas emissions, but a report from Canada’s environment commissioner revealed it was “poorly designed” and amounts to little more than a fossil fuel subsidy.

“What we see is the federal Department of Natural Resources either is completely incompetent and doesn't understand basic issues about how to handle a greenhouse gas reduction program, or they're using the climate crisis as a scheme to funnel money to Big Oil,” said Angus.

Accountability mechanisms need to be in place to deal with these types of programs to guarantee significant emission reductions, said Angus.

“If those targets aren't met, then Canadians have a right to say those companies need to pay the money back,” he said.

Natural Resources Canada has since announced strengthened funding criteria for its onshore emissions reduction fund. Sivasankaran said these changes reflect economic improvements in Canada’s oil and gas sector since 2020, lessons learned throughout the program, the environment commissioner’s report, and comments from environmental organizations including the Pembina Institute and the David Suzuki Foundation.

The party's natural resources critic wrote to Natural Resources Minister Jonathan Wilkinson on Jan. 27 after recent reports found the federal government's climate change funding for oil and gas firms amounts to little more than fossil fuel subsidies.

In 2020, the federal government “took the immediate action necessary to protect thousands of jobs in the oil and gas sector and support the communities that rely on them, while protecting our environment,” Sivasankaran said in her statement.

Some critics like Julia Levin, a senior program manager with Environmental Defence, say these programs are still antithetical to the polluter pays principle, which states those who pollute should pay the costs imposed on society. She would like to see the program scrapped.

Levin said this principle needs to be a key criteria of any emission reduction funding program.

For example, despite its name, the onshore emissions reduction fund that attracted the ire of politicians and environmentalists was created with the economic needs of companies in mind, not emission reduction goals.

“It's an attempt to pull wool over our eyes,” said Levin.

She said the polluter pays principle needs more recognition and that one avenue could be creating new policy tools to set up a formally binding commitment to ensure no new subsidies are created and no project that violates the polluter pays principle gets approved for funding.

Angus said the biggest barrier is a lack of political will.

“In a previous life, I worked for First Nations, I worked for arts organizations, and when we got a little grant money, if we didn't prove that the money was spent the way it was supposed to be spent, there were serious repercussions,” said Angus. “If they can do that for small arts organizations, they sure as hell can do that for Shell and Chevron and [ExxonMobil] and the rest of them.”

Since the Paris Agreement was signed in 2015, Canada has had the worst record among G7 countries for reducing greenhouse gas emissions, and last fall, the independent Climate Action Tracker found Canada is heading for 4 C warming — far exceeding the Paris target of 1.5 C.

Angus’ letter highlights the pleas of 400 academics who wrote to Finance Minister Chrystia Freeland urging her to cancel the government’s proposed carbon capture tax credit and invest in renewable energy.

A recent report by international NGO Global Witness found the Quest carbon capture and storage facility — operated by Shell near Edmonton — is emitting more greenhouse gases than it captures.

Angus’ letter also criticizes the federal government for its high frequency of meetings with oil and gas lobbyists.

Meeting with lobby groups is not inherently wrong, but Levin says oil lobbyists have far more access to high-level officials than most environmental groups, and their influence in Canada’s “environmental and energy policies is egregious.”

Limiting that influence on Canada’s policies is key for a climate-safe future, she said, adding: “We wouldn't put health in the hands of Big Tobacco, but we continue to do exactly that with Big Oil.”

By sending his letter, Angus wants two questions answered: “Is this government giving free money to Big Oil under the guise of dealing with the climate crisis? Or is [Wilkinson] going to overhaul his department to say the days of being the free money cash machine for Big Oil are over?”

— With files from John Woodside

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer

Updates and corrections

| Corrections policy
February 2, 2022, 02:00 am

This story has been updated to include comments from Natural Resources Minister Jonathan Wilkinson's office.

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Angus: “What we see is the federal Department of Natural Resources either is completely incompetent and doesn't understand basic issues about how to handle a greenhouse gas reduction program, OR they're using the climate crisis as a scheme to funnel money to Big Oil.

Both…and. Not either…or.
Natural Resources Canada (NRC) is both corrupt and incompetent. Minister Wilkinson needs to be replaced, and NRC needs a massive housecleaning.
Unless and until that happens, we shall know that the Liberal Govt is not serious about climate change. Ottawa's main motivation is to keep the O&G industry happy.
A plan to fail on climate. As endorsed by several academics and National Observer columnists before the last federal election. For shame.

The Liberals propose to "green" fossil fuels — not get off them.
According to the Liberals, the path to renewable energy and a sustainable future runs through a massive spike in fossil-fuel combustion and emissions. Complete disconnect from the science.
When the IPCC issued its latest report, then-Environment Minister "Wilkinson reaffirmed Canada's commitment to phasing out fossil fuels and achieving net zero carbon emissions by 2050, but said achieving that target WILL REQUIRE MONEY GENERATED BY FOSSIL FUELS."
"Ottawa says it needs revenue generated by the Trans Mountain pipeline to fight climate change" (CBC, 9-Aug-21)
New pipelines to fight climate change.

Trudeau (2016): "There is growth to be had in the oilsands. They will be developing more fossil fuels while there's a market for it, while we transition off fossil fuels."
Trudeau (2017): "No country would find 173 billion barrels of oil in the ground and just leave them there."
Not once has Trudeau acknowledged the necessity of cutting fossil fuel production.
"And, between Trudeau's 2017 speech promoting tar sands expansion to fossil fuel CEOs in Houston, Jonathan Wilkinson's social media looking like a Shell advertising campaign, or Seamus O'Regan forming a secret committee with Big Oil during the pandemic, this lobbying seems to have an effect. With this, it's fair to be worried that TRUDEAU AND HIS CABINET ARE ALREADY DRINKING THE FOSSIL FUEL KOOL-AID when it comes to the timeline for a transition."

Govt and industry are betting on white elephants like carbon capture and storage (CCS), blue hydrogen, and SMRs to reduce upstream O&G emissions. Ignoring the 80-90% of emissions at the consumer end. Sticking taxpayers with the bills. Even as Big Oil is swimming in cash.
Polluter pay? Not a chance.
Absurdly, Minister Wilkinson insists that tax dollars to fund emissions reduction, clean-up, and reclamation are not subsidies.
"[orphan well cleanup and the wage subsidy that was provided during the COVID pandemic] aren't fossil fuel subsidies… We absolutely are committed to eliminating fossil fuel subsidies that are incenting the production and exploration of oil and gas, but it doesn't include things that are good for the environment, like remediating orphan wells or programs focused on cutting emissions."
"Jonathan Wilkinson says Liberals are the best hope for a net-zero future" (National Observer, Sept 9th 2021)
Obvious nonsense. A subsidy is any form of financial support, benefit, or allowance to industry (or consumers) that benefits the bottom line. Sticking taxpayers with industry's costs for cleanup and emissions reduction is an obvious subsidy. The savings goes directly to the industry's bottom line and into shareholder's pockets.

You get what you vote for.
We get the government we deserve.

I, for one, didn't get what I voted for.
Is prop. rep. then, the key to climate change action?
Might we have better results through fostering consumer revolts and boycotts?
How do we get at orphan well cleanup through anything other than legalized force?

One way would be to hit the demand side of the equation. Solar and wind are now very affordable, even in private market energy economies like Alberta. Irrespective of Trudeau's fossil subsidies, his mouth keeps uttering action on climate and the budget for this year supposedly has funding to help out with grants toward household energy conversion and clean energy projects.

The last market-based auction for wind I am aware of occurred in Alberta and garnered a 34 cent price per megawatt (3.4 cents per kilowatt hour). Granted, that could be a pre-mark up wholesale price. Here in Vancouver we pay almost 10 cents per kW/h up to a consumption ceiling, beyond which the price jumps to a higher tier by around 4 cents. The lower tier is still a pretty cheap price compared to a lot of other jurisdictions in the US and Europe.

Unlike Alberta, though, a net metering credit for household solar will be virtually cancelled when BC Hydro sticks a wrench into genuine climate action by lowering its net metering credit by 60%. This effectively cancels the potential for more than 300,000 solar roofs in BC, power generating infrastructure that Hydro doesn't have to pay for. Hydro's head is under reservoir water on climate

Meanwhile, investments in solar and wind are growing faster than fossil fuel investments, and new power storage technology using common, cheap materials are starting to appear on the ground and have the potential to knock lithium ion off its pedestal. Iron-air and liquid metal batteries show enormous promise for their affordable, scalable and very high megawatt storage capability that virtually eliminates the intermittency of renewables and makes Tesla look like dreaming amateurs. Tesla and others will no doubt be confined to mobile devices and vehicles and small-scale residential batteries.

Disruptive technology in cheap, large-scale storage batteries and the ever steeper investment and installation curves in renewables (primarily solar and wind) together are like a powerful rock band and a big symphony combined. Trudeau is risking being caught off guard with his support for fossilization enhancement (perhaps an attempt to assuage his dad's reputation in oil country) as oil prices increase at the same time the cost of renewables decreases. It won't be long before microchips are back in stock and affordable electric cars and the power to run them hit the market and steal market share and diminishes his nonsensical narrative that sales of bitumen (primarily used in land transportation) will finance renewables.

There is also the evidence that planetary peak car occurred as long ago as 2014 in direct proportion to the extensive expansion of mass transit in Asian and European cities (Newman, Kenworthy, 2015), though that's hard to fathom here in F 150 country. Consumer preferences (most always related to prices) will be the ultimate test of that theory, and electricity plus shoe leather may well become giant slayers.

There is also the theory that Trudeau won't be around to fight the next election, and that Chrystia Freeland is best positioned to become the next Prime Minister. I am not aware of any pro-oil speeches Freeland made to crowds of Texans wearing 10-gallon hats. Perhaps 2022 will be the year to sway Freeland (and the NDP partner in parliament to buck up more) as a potential leader to tailor federal budgets more toward subsidizing renewables, conservation and urban efficiency. Creating millions of jobs and seeing an actual decrease in Canadian emissions* through building a national smart grid, through direct investments in renewable projects and urban transit and more are positive and proactive activities compared to the constant waterfall of criticism that washes off Trudeau so easily.

* More accurately, Canada's emissions are right on track to meet the 2.0 degree goal, of not 1.5 ....... IF you strike Alberta and Saskatchewan from the measurements. What does that tell us?