Time Not Right For A National Carbon Tax: Brad Wall

Published by: Daily Oil Bulletin
By: James Mahony

While not opposed in principle to a carbon tax, the politician many Albertans call the defender of Western Canada’s oil and gas sector said this is not the time.

Saskatchewan Premier Brad Wall was responding to suggestions the Justin Trudeau government might move to bring in a federal carbon tax, in addition to Alberta’s provincial tax on carbon.

“Now is not the time,” he told reporters after a speech Wednesday to industry executives in Calgary. “Any kind of carbon tax or levy, by definition, is going to hit the more carbon-intensive industries, [including] oil, mining and maybe even agriculture.  Especially for oil and mining, this is not the right time.”

Earlier, during his speech to the Explorers and Producers Association of Canada (EPAC), Wall acknowledged the industry is “undergoing a huge challenge,” due to low crude oil prices and the ongoing industry downturn.

At the same time, he would not rule out “some sort of national initiative” on carbon emissions, without elaborating on the matter. More to the point for his audience, he compared the industry’s current situation to the downturn Canada’s auto-manufacturing experienced in 2009.

“Can you imagine if we’d been advocating for a special tax on car-manufacturers in 2009?” he said.  “We just wouldn’t do it. We’d have said, ‘maybe, when the industry’s all strong and healthy again. [But] our [oil industry] isn’t, so now is not the time for the levy, but I’ve said publicly that that’s the model we’ll use when the time is right.”

Also on Wednesday, Wall acknowledged Canada has more work to do in terms of cutting greenhouse gas [GHG] emissions, but said this country represents just 1.6 per cent of emissions worldwide.

“We’re not off the hook, but shouldn’t we be focused on the 2,400 coal-fired [power] plants that are being built around the world? Can we find a technology to clean those up?” In particular, Wall challenged the thinking of Canada’s climate change scientists, including those who publicly oppose proposals to ship liquefied natural gas (LNG) from Canada to Asia.

“I do not understand that,” he said. “If we know that, if there’s more natural gas in Asia, there will be [fewer] coal plants, … why wouldn’t we want to export much cleaner gas from Canada — from British Columbia and Alberta, maybe — to Asia, and displace coal?”

Wall is not the first to argue that exporting Canadian LNG to Asia would go far in displacing coal as a fuel in Asian markets, and give Asian industries, especially in coal-reliant countries like China, another reason to cut coal usage. Yet, he was surprised that many scientists and environmental activists seem to miss the point entirely, focusing instead on stopping LNG development.

“Common sense seems to be missing from [their] argument.”

LEAP Manifesto

Yet, he said a more urgent threat than climate change comes from an “ever-growing matrix” of Canadian activists with an axe to grind, in particular those associated with the LEAP Manifesto, which recently provoked debate in the federal wing of the New Democratic Party (NDP). Among authors of the document is Naomi Klein.

Wall said “profound snobbery” is at the heart of the manifesto, which proposes expanding some sectors of the economy, such as care-giving, education and the arts, where jobs are “more worthy — that is the implication.” Yet, he pointed out that public money underpins these sectors, and that money usually comes from taxes, which often come from the resource sector, including the oil and gas industry.

“Grim Leapers,” he said, “just aren’t comfortable that [Canada has] all this oil, and what [it] might mean.” Yet, the industry is also threatened by others who would like to shut it down completely, he added.

LEAP activists aside, he also cited the divestment movement, which he said consists of pension funds, universities and faith-based organizations who are “trying to direct investment away from [the oil and gas] sector based, I think, on not-entirely factual evidence. They are responding to the call that we move rapidly to a ‘post-carbon economy.’”

The latter, he said, would simply not happen, at least not at the rate activists hope for. “There will be no quick transition to the post-carbon world. The transition is occurring, and we should be a part of it, but by 2040, the International Energy Agency predicts fossil fuels will still account for 75 per cent of [global] energy consumption.”

Acknowledging there will be more wind- and solar-based power generation in Canada over time, he said there are still clear limits to what these power sources can achieve, in terms of generation, notwithstanding improvements in technology.

Crude oil pipeline debate

Wall also joined the conversation over oil pipelines, saying it’s important that Canada get oil to market in a safe and sustainable way. In most countries, he said, this debate would not even happen. “If they had a third of Canada’s oil reserves, in most countries, there wouldn’t be this intractable, interminable delay and debate about whether we should even get the product to tidewater.”

Should Canada fail to approve a pipeline to tidewater, the result will be that this country will continue with just one customer: the United States. “It’s remarkable that we’d be satisfied with a situation where one country’s good enough, and we’re selling [oil] at a discount … because we can’t get the Brent price, which is always a little bit higher than WTI.”

He credited Canadians with being able to respond to “the facts” in the pipeline debate. “If [they] thought, ‘Well, we could buy oil from Alberta and Saskatchewan or … from a country that has beheaded more people than ISIS, I think they’re going to make a decision in favour of Canadians,” he said. “There’s some common sense I believe Canadians have.”

Also following his speech, Wall was asked whether he was content with the Trudeau government’s approach to pipeline development, namely, waiting for the National Energy Board (NEB) to complete hearings and issue a formal decision, but then deciding the matter in the murkier political realm.

“I’ve said publicly – and to the prime minister, privately — that I think he could be a champion [here]. [Trudeau] has a lot of goodwill across the country. He’s very popular, and he has the solid support of a base that might have concerns about a pipeline, so if he were to lay out some of the facts, and be a champion for them, I think it would be a game-changer. I hope he does that.”

Yet, overall, Wall is concerned the oil and gas industry is losing the battle for public acceptance. He acknowledged that recent events, such as Vancouver Mayor Gregor Robertson’s very public stance against the proposed Kinder Morgan Inc. Trans Mountainpipeline expansion, seem only to reinforce the feeling that the industry is falling behind in public support.

“We’re in the middle of a battle, and frankly, we haven’t been winning very many. When I say ‘we,’ I mean [the oil and gas] sector and the resource importance of Western Canada, and I fear we’re in danger of losing more battles, if we’re not vigilant. We’re at a disadvantage in some ways.”

While the industry has “the facts” on its side, and evidence to offer, he said it’s nonetheless important to present its case at every opportunity. “[We] need to redouble our effort to disseminate the facts, [and] become ever-more determined purveyors of the truth about this sector... We have to keep making the case [and] presenting the facts.”

 
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