Last Sunday hell froze over, or so it seemed to many Albertans.
Alberta’s NDP premier, Rachel Notley, unveiled her government’s Climate Leadership Plan. She was surrounded by representatives from NGOs and aboriginal groups as well as the CEOs of Suncor, Shell, Cenovus and Canadian Natural Resources Limited. No one batted an eyelash as Notley rolled out the government’s plan to:
- Implement an across the board carbon tax ($3 billion annually) starting in 2017
- Phase out coal-fired power plants by 2030
- Set a 100 megaton cap on oilsands emissions
- Achieve a 45% reduction in methane emissions by 2025
- Reinvest revenues in renewable energy programs and innovation and technology
Given Big Oil’s vitriolic reaction to Notley when she took power a mere six months ago one has to wonder what happened.
The sweet spot
Notley has an uncanny ability to read the mood of the people, analyze a situation and determine just how far she can go before she hits a wall. With the Climate Leadership Plan she nailed it.
Rachel Notley
Environmentalists are happy because for the first time in recorded history Big Oil appears to accept the premise that the environment does not have to be sacrificed for the economy.
And while Notley’s plan is by no means perfect, it gives Notley an opportunity to demonstrate that an energy-based economy can implement effective climate regulations.
James Coleman, writing in the U of C law blog says Notley’s climate plan may be the most important climate announcement of the year because it may encourage other jurisdictions to follow suit. No doubt that’s why she called it the Climate Leadership Plan.
Most importantly, environmentalists believe that Notley’s plan is the beginning of a process to transition Alberta away from fossil fuels to a more stable and diversified economy.
Big Oil is on board because it had no choice.
Oilsands producers are relieved they don’t have to bear the brunt of the $3 billion/year carbon tax (we’re all paying it). The 100 megaton cap on oilsands emissions will allow them to continue to expand—43% by 2030. And shutting down the coal plants is someone else’s problem.
But most importantly their existing strategy to increase market access and improve their reputation was a dismal failure.
Big Oil assumed that getting the federal and provincial Conservative governments to streamline the regulatory approval process would speed up market access. It didn’t. They failed to account for public resistance.
Big Oil decided the cause of this resistance was stupidity. They called it a lack of “energy literacy”—the public simply didn’t understand that escalating environmental degradation was the price of prosperity.
Steve Williams Suncor
The public disagreed. Then oil prices tanked, putting paid to the prosperity argument once and for all.
Eventually a light bulb went on. Last spring executives like Suncor CEO Steve Williams announced that “Climate change is happening. Doing nothing is not an option.”
So far, so good, but in a recent article celebrating Mr Williams as the CEO of the year, Mr Williams predicted that Suncor will be mining the oilsands for the next 200 to 300 years.
Reading the tea leaves
Ms Soapbox thinks Mr Williams is delusional. Here’s why.
The public, particularly the younger generation, is becoming less enamored with fossil fuels in general and the oilsands in particular.
Jamil Jivani, the co-chair of the Future of Canada’s Oilsands, says younger workers are reluctant to work in the energy sector. They think it’s a dying industry. They’re not interested in squeezing more productivity or money out of old energy. Instead they’re looking for “completely new ways of making money, and new frontiers in the energy economy not yet embraced, or possibly even conceived.”*
Where will they go?
Well, they could follow Jatin Nathwani’s advice and shift from transporting fossil fuels to moving electrons generated by hydro, nuclear, geothermal, wind and solar power. Nathwani, a professor and Chair of Public Policy for Sustainable Energy at Waterloo says Canada has the technological and scientific wherewithal to do it.
Or younger workers can seek out “new energy” entrepreneurs like Elon Musk who invested the millions he made from the sale of PayPal in Tesla, an electric car company, and SpaceX, a space exploration company.
Elon Musk
Musk believes that in a few years over half the new cars sold in the US will be electric cars. (Musk is pretty successful at anything he does. NASA is so impressed with SpaceX that it gave him a contract to transport astronauts and supplies to the international space station).
The demand for electric cars will get a boost from jurisdictions like California, which recently passed laws providing rebates to drivers who buy or lease zero-emission vehicles.
Electric cars won’t solve our climate change problems, but they are an indication that the public is moving in a greener direction.
Hidebound oil executives may believe that Big Oil will be toiling in the oilsands for another 200 years, but wise governments are preparing now for the economic disruption that will come with the advent of “new energy”.
Rachel Notley knows how to read the tea leaves. Her Climate Leadership Plan is the first step to ensure Alberta will be ready when “new energy” arrives on our doorstep.
Well done Rachel. Well done.
*Daily Oil Bulletin, Nov 17, 2015
Susan on the Soapbox 
Thanks Susan.
While the actions of the Alberta government are a welcome improvement, not all the analysis is positive:
http://www.theglobeandmail.com/report-on-business/rob-commentary/alberta-carbon-plan-looks-ambitious-but-wont-actually-cut-emissions/article27515194/
More work to be done …
Thanks for the link David. You’re absolutely right. Some of the oilsands players see the 100 megatonne cap on emissions as a theoretical number that they’ll never hit because of industry innovation or more likely because low oil prices will stay low and they’ll be forced to cut back on expansion. The coal industry (TransAlta) was “heartened” because it has 15 more years of coal production, sees a big payout from the government to compensate it for stranded assets and will transition to renewables. These are huge gives on the part of the government, but I assume the environmentalists are satisfied because the carbon tax and focus on renewables is much more than they ever hoped for under the previous Progressive Conservative government. Just goes to show you that if you start with absolutely nothing you’re grateful for any little crumb. I’m hopeful that when (if?) the economy improves Notley will give the climate policy more teeth.
David this analysis makes sense and is probably correct but I personally do not have a concern anymore. This type of analysis is to me outdated. It is one more of those fantastic economic forecasts that are wrong 9 out 10 times. By 2030 the oil industry will be in decline as we are reaching the tipping point of a total acceleration of renewable resources development and innovation. The decline is already noticeable and the article posted by Katleen is an example. This is happening all around the world and we do not even know about it. Electric cars and even hydrogen cars are just about to go on a very fast growth and so I cannot see how people even still think that the oil sands growth will continue. I doubt it, Soon there will be enough available oil without any need of our type of oil. Alberta has to wake up and that is why I agree with full investment in Renewable Resources. in my opinion the money from the carbon tax should be used to build geothermal, wind, solar and especially retrofitting which creates lots of well paid jobs.
Just to add to Carlos’ point, the two companies that are most heavily invested in renewable projects are TransCanada Pipeline and Enbridge. Hedging their bets in case the oil bubble bursts?
Some of the comments suggest the story is not quite *as* good as it sounds, but it sounds pretty good!
http://www.theguardian.com/environment/2015/dec/03/uruguay-makes-dramatic-shift-to-nearly-95-clean-energy
Kathleen that was an amazing link: “Uruguay gets 94.5% of its electricity from renewables. In addition to old hydropower plants, a hefty investment in wind, biomass and solar in recent years has raised the share of these sources in the total energy mix to 55%, compared with a global average of 12%, and about 20% in Europe.” Yes, Alberta and Canada have a long way to go, but at least Notley has taken the first step. While the hard cap on oilsands emissions isn’t quite as good as it sounds, the economy-wide carbon tax will reduce consumption and provide revenue for renewable projects. People need to remember that until May 2015 Big Oil called the shots and any government action on climate change was nothing more than lip service.
Kaithleen – thank you very much for this article. I have no doubts that a lot of it is in the ‘small is beautiful’. All small nations on Earth do better than the big countries where bureaucracy is hard to change and where excess population creates way more difficult problems.
To be honest I am not surprised. I remember my parents referring to it as the Switzerland of South America in the late 50s. They have always been a nation of fairly successful restrained people. Prefer to not be noticed. They do not need the world admiration to create internal progress. I am including another article that says much better than myself what I have always heard about Uruguay. I am glad that they seem to be doing well. They have now gone through a long period of bad times, especially after the great mess the US created in South America politically after the second world war and with their obsession with their view of democracy subservient to them economically.
http://www.theglobalist.com/uruguay-south-americas-new-zealand/
I am glad you both liked it! Pepe Mujica’s track record in Uruguay gives me hope about political possibility generally.
Carlos I was interested to see the author compare Uruguay to New Zealand. A friend of mine just returned from a month in New Zealand. She said notwithstanding NZ’s effort to follow Thatcherism in the 1980s, New Zealanders strongly believe in protecting public goods, especially public space. For example, with the exception of some parts of Auckland no one is allowed to buy up and develop the shoreline or even block the view because everyone has a right to public space.
Canada and Alberta can learn a lot from smaller successful countries.
Susan I think that New Zealand is a survivor of the most aggressive neo-liberal attack I know of. If you remember one of the Klein`s advisors came here from New Zealand and said that the fastest you cut and implement privatization the best, because people would have no time to react. I have a good friend in New Zealand and they are still a progressive nation and apparently very well organized and very peaceful and very protective of its closeness to nature.
It is difficult to compare Uruguay with a country like New Zealand because they are culturally very different and their pasts have been very different. New Zealand has a tradition of more equality whereas South American countries have for a long time have levels of inequality that are shocking. I lived in Rio de Janeiro from 1975 to 1978 and even as a very young man I was shocked with the 2 million millionaires that lived in luxurious apartment buildings in front of the ocean and two blocks behind them one could find the worst poverty I have ever seen in my life. The difference was not just money wise but socially as well. What I mean is that the rich easily made references about the poor with the most derogatory words possible. Homelessness was ignored by most people including of course the government. I did not visit Uruguay despite being close so I do not know if that was or is the case there as well. I do know that despite their size they had a fairly strong voice in the area.
Could it be that the Petro Industry is “tickled” that the costs of the NDP climate plan foists almost all of the costs on consumers. You know, a little bit like what Prentice did in his I’ll-conceived budget where he decided not to burden those same corporations with tax increases?
53 Degrees: I have not been able to find any data showing how much of the carbon tax burden will be borne by consumers and how much will be borne by industry but I’m sure the fact that consumers are bearing some of the burden has a lot to do with Petro’s “support” of the plan. They came through it relatively unscathed, especially considering that oil prices are in the tank and they can’t afford to expand in any event.
Pure anecdote:
Anyone remember “The Windsor”? It was a small pub’ that used to be part of a strip mall just west of the butterdome… I visited it occasionally once upon a time, and so did a few UofA engineering profs/TA’s/students. One night about 15 years ago I had an intriguing discussion there over a few pints with one of those engineering TA’s regarding ‘green’ electricity production . Our talk began covering the usual list of pro’s and cons of wind and solar systems, when I discovered that this individual’s specialty was honing the new-ish (at the time) tech of directional drilling. He was telling me how even then the industry was literally plumbing new depths in the field, when a question popped into my head:
What’s the temperature way down there?
My contention was that if it was over 100C (it is) we could do what we have been doing since the beginning of the industrial revolution: use this heat from the bowels of the earth to boil water and use the pressure of the resulting steam to spin something; in this case a dynamo. He paused for a moment, interested, looked thoughtful and said something (recall: the pints) like,
“Yeah we could do that, but nobody is going to until we completely use up the energy extraction system already in place; until it becomes economically nonviable anyway. Regardless of our current abilities too many people have too much invested in the infrastructure/production/consumption models currently being used.”
Perhaps we are finally ‘there’; now that the Rockefellers are on board.
I agree Goinfawr. Unfortunately that is the way it happens and that is why I previously said that I do believe we are at the tipping point of a major change right now. Of course this has put us back at least 20 years. Like Susan mentioned, now companies like Enbridge and Transalta and others are starting to own renewable resources and soon they will be the activists. This is the major problem behind too big too fail companies and interests. Small is definitely more beautiful and way more flexible.
GoinFawr and Carlos: perhaps I’m overly optimistic but I believe we’ve reached the tipping point. The energy industry will try to keep the planet on fossil fuels for as long as possible–it’s been a lucrative business and they won’t let it go until consumers pull away and demand more renewable alternatives. It’s odd to read articles about Russia and China making agreements to mine helium 3 on the moon and NASA working on quantum dot solar cells and still be convinced that fossil fuels and all the environmental degradation that they cause will be the fuel of choice forever.
Yes Susan it is amazing that companies in the fossil fuel industry are still talking about new pipelines and new export harbours that cost billions of dollars. Do they really believe they can recover the costs? Should not be a surprise though. Despite being treated like Gods most CEOs of these Oil companies behave like normal humans. They are like junkies that cannot get out of the vicious circle of addiction. I do agree with you that we have reached the tipping point. If you look at the investment numbers, it is quite clear that the surfing is on. An agreement in Paris and the wave is unstoppable and the dinosaur era starts for the oil industry.