Restarting The Conversation And Finding A Balance On Energy And Carbon In Canada

By: Carter Haydu
Published: Daily Oil Bulletin

Communities are not “particularly exercised” over the climate change impacts of pipelines, gas-fired power plants or natural gas developments so much as they are concerned about the local impacts of these developments.

Therefore, says the Canadian Gas Association’s former president and chief executive officer, industry should address local concerns, providing practical assurances to help “restart the conversation” around energy developments.

“The climate activist community that makes such an effective use of Canada’s reputation as a climate shirker has the interest of conflating the risk of local effects with the climate consequences of energy development,” Michael Cleland told last week’s Petroleum Services Association of Canada (PSAC) Industry Insights Luncheon “That is why I argue it is in Canada’s interests to shift the narrative by acting more forcibly and visibly on carbon.”

He added: “At the same time we need to revisit the social contract that governs the pace of development and management of the cumulative effects, and with local and regional scales and methods of mitigating impacts, including the risks of system failures.”

Most of all, he suggested, Canada must reconsider its decision-making mechanisms, especially in regards to how policymakers and regulators interact with local authorities and their role in the processes. Cleland said provincial and municipal governments must “get a grip” on the most basic principles that have kept Canada united and prosperous.

“No principle is more important than the right of free passage of goods in order to reach markets. As long as the world needs oil and gas resources — as it will for many years to come — and as long as Canada can produce such resources competitively and responsibly, we should be in the game.”

According to the Energy Council of Canada’s 2015 Energy Person of the Year, Alberta Premier Rachel Notley was correct to tie her support for the federal carbon pricing plans to federal support for pipelines. However, he believes the federal government should state unequivocally that a growing oil and gas industry is in Canada’s interests, and that for the industry to grow it requires pipeline access to all world markets, as well as Canadian domestic markets.

“The bargain of Canadian confederation includes the proposition that there should be free movements across provinces, but we recently treat that like some quaint idea that is now being [exceeded] by something more fashionable that we call ‘social licence.’ But if every province and every community — including several hundred increasingly independent-minded First Nations — all find themselves with an effective veto, then we are hardly a country.

“Our challenge is to restore confidence in the institutions that actually make this country work. That means finding mechanisms that actually engage local and First Nations governments as constructive partners, working under systems of democratic accountability and the rule of law, all of which make these processes function.”

Rebalancing the conversation starts with addressing carbon, he said. This includes a plausible strategy on climate change that includes oil and gas sector growth. Further, restarting the conversation requires a “new deal” with First Nations who stand to benefit from industrial growth, provided it is done in ways that respects their traditions, the environment, and local decision-making. Local authorities in general also need assurance of some measure of control.

“Above all, [the conversation] needs to include a broader spectrum of voices arguing the case for a truly sustainable energy future — voices that include many Canadians who know something about the energy industry who are on the ground and who are known and can be trusted in their communities.”

He added: “The industry is unavoidably associated with environmental effects that contribute to an ever-more complex political environment for most governments. The industry needs to acknowledge and respect that reality.”

Through most of its history, the Canadian energy sector has existed in the background, said Cleland, sustaining communities with secure, reliable and affordable supplies, providing highly valuable employment and business opportunities especially for western provinces. However, the “background” nature of the oil and gas industry has changed in recent years, and that change is probably permanent.

“Attention that energy gets these days is pretty much unprecedented, driven considerably by climate change, but almost as much by local community concerns and growing distrust of public authorities and energy decision-making processes,” he said. “Too little of the debate seems to be anchored in accurate information or a solid understanding of how energy systems work, or the forces that will drive it in the future.”

While many Canadians would suggest Canada get out of the fossil fuel business and instead pursue clean energy opportunities, Cleland told the event that the oil and gas industry continues to be an economic mainstay for Canada, accounting for over 20 per cent of exports and a similar share of capital investments. He argues Canada should not cease energy growth, because such a move would not impact the world demand for fossil fuels.

“If Canada were to eliminate its oil and gas industry tomorrow, the savings in greenhouse gas emissions would be made up by growth in world emissions by sometime next spring. Canada’s sacrifice would be empty symbolism.”

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