If perfect is the enemy of good, that’s especially true when it comes to climate policy in Canada. Just ask Steven Guilbeault, our environment minister.
He didn’t get into federal politics to defend the decision to approve a major new oil project, much less be the person who helped make it. But his current role, and the work it entails, is a perfect encapsulation of what an energy transition actually looks like in a place like Canada.
As he told Politico in a recent interview, “For some people, [energy] transition is a very black-and-white thing and the reality is that it's grey — and sometimes very murky grey.”
To those on his left and right flanks, there are no shades of grey here. Conservatives are using the war in Ukraine to push for yet another increase in Canada’s oil and gas production, along with new pipelines to carry it to tidewater.
David Knight Legg, former CEO of Invest Alberta and a key ally of Jason Kenney, described the federal government’s budget — which included both a major new tax credit for carbon capture and storage and investments in electric vehicle infrastructure and other pro-climate measures — as “schizophrenic.”
For the first (and probably last) time, this country’s leading environmentalists, including Guilbeault’s former colleagues at Équiterre, might agree with Knight Legg. To them, any support for the oil and gas industry is an intolerable failure to meet the moment, and the decision to approve a major new project like Bay du Nord is proof that for all of its fine words about climate change, the federal government doesn’t actually take it seriously.
But the recent budget is neither confused nor contradictory. Instead, it’s an example of the hard choices that have to be made in a country like Canada, where progress on climate change is more about evolution than revolution.
Yes, Canada could move to wind down oil and gas production more aggressively, but that would only create an opportunity for other producing nations — or OPEC, which has spent the last few years deliberately restricting its supply — to fill the resulting supply gap.
Global emissions would be largely unimpacted, and the royalties and corporate taxes that could be used for green energy investment would go somewhere else — somewhere that doesn’t have a price on carbon or a clear plan to cap and reduce its industrial emissions.
And yes, Canada could try to build new export pipelines to the East Coast and fill them with oil and gas, but that would make it impossible for us to hit our Paris Agreement targets. Those pipelines, if they were somehow able to overcome the local opposition that has defeated them time and time again, wouldn’t come into service until near the end of the decade — at which point, they could quickly become white elephants carrying stranded assets.
Opinion: If perfect is the enemy of good, that’s especially true when it comes to climate policy in Canada. Just ask Steven Guilbeault, our environment minister, writes columnist @maxfawcett.
Instead, the government has struck a grand bargain of sorts, one Guilbeault emphasized with his decision to approve one new project while sending a letter warning Suncor the proposed expansion of its base mine isn’t up to snuff. Bay du Nord, which would produce as many as 200,000 barrels per day of oil, has per-barrel greenhouse gas emissions of just eight to nine kilograms. Suncor’s base mine, which would produce between 225,000 and 250,000 barrels per day over its 25-year lifespan, comes in above 30 kilograms per barrel.
The math here speaks for itself — and it’s math that clearly informs the government’s recent decisions. So, too, is the math around so-called “Scope 3” emissions, which are the ones that occur upon combustion and constitute the vast majority of a given barrel of oil’s greenhouse gas emissions. It’s tempting to think any additional barrel produced automatically means more emissions, but this ignores the reality of declines (the average oil well’s production declines every year, sometimes very rapidly) and the need to replace those in order to avoid a massive price spike.
The impact of that plan should not be underestimated. “If the Emissions Reduction Plan was the blueprint,” Clean Prosperity executive director Michael Bernstein said in a statement, “then this budget lays down the first few floors of the building.”
That’s more important than it might seem. After all, there’s a chance — one that seems to grow with every massive rally — that Pierre Poilievre, after becoming leader of the Conservative Party of Canada, could win the general election in 2025. You can be sure his first priority would be to do whatever it takes to restore and revitalize the fossil fuel economy in western Canada.
But this year’s budget, and the incentives it offers for carbon capture and storage, force Canada’s oil industry to push more of its chips into the middle on decarbonization. In order to take full advantage of the credit, companies will have to make major investments in carbon capture projects quickly, since it gets cut in half by 2031.
By the time fossil fuel producers have sunk that capital into emissions-reducing technology, they’re not going to want to go backwards, no matter how much a new or different prime minister might want them to. That’s especially true if the rest of the world continues to move more decisively towards net-zero in their own economies.
By tying their hands with their own stated ambitions, which include reaching net-zero emissions by 2050, the federal budget locks Canada’s biggest oil companies onto a path they won’t easily be able to deviate from.
The idea of public money flowing to companies that are as profitable as they’ve been recently is surely unsatisfying to most environmentalists in this country, including Guilbeault. But if we’re actually going to get there, the road to net-zero is going to be paved with hard choices, not easy answers.