Why is the Canadian Government Reluctant to Leave it In the Ground?

The oil, that is.

Just over a year ago, Canada’s Conservative government was defeated at the polls and a new, Liberal, government took over. Many hoped that this would lead to a change in energy policy and environmental policy. While the outgoing government of Stephen Harper had done its utmost to ram through pipeline projects to get Alberta tar sands oil out of the ground and into export markets, the new Prime Minister, Justin Trudeau, had promised a more measured approach, one that would take environmental concerns – including climate change – into account.

While the Trudeau government did reject the Northern Gateway pipeline and pledged to enact an oil tanker ban next year on the northwest Pacific coast., it approved two pipelines: Kinder Morgan’s Trans Mountain expansion and Enbridge’s Line 3 proposal  .

This is no surprise. Trudeau has been arguing for a while that increasing exports of tar sands oil would help fund investments in ‘clean energy”, thus facilitating a transition to a “low-carbon” economy. In March 2016 he stated:

“To get there, we need to make smart strategic investments in clean growth and new infrastructure, but we must also continue to generate wealth from our abundant natural resources to fund this transition to a low-carbon economy.”

However, in reaction to yesterday’s announcement John Stone, a former climatologist with Environment Canada, and vice-chair of the Intergovernmental Panel on Climate Change’s Working Group II, begged to differ:

“If you build a pipeline, you’re going to fill it with tar sands that’s going to increase our emissions and that’s not going to allow us to meet our climate change commitments,”

By some estimates, the transition to renewable energy sources is already well under way in Canada. Employment in the renewable energy sector surpassed that of total employment in the tar sands in 2014.

Granted, many of these renewable energy projects – most notably hydro electricity – have their own environmental problems. Also, these industries are publicly subsidized- although fossil fuel extraction is as well.

The point is, that with the right investments, employment in the renewable energy sector could make up for losses in the fossil fuel energy sector if we decided to not increase tar sands production any further. Also, contrary to Trudeau’s claims, there are other ways to fund such investments. There, are however, two major problems- problems that anyone fighting these pipelines must understand will make it very hard for the Trudeau government to back down.

One problem is that while renewable energy employs people all over Canada, employment in fossils fuels extraction is concentrated heavily in Alberta, Saskatchewan, and Newfoundland and Labrador, which poses a political problem for any movement hoping to start winding down fossil fuels extraction in Canada. That is why even an NDP government in Alberta is for the pipelines.

Then there’s this number: $41.1 billion

$41.1 billion is the value of net crude oil exports in 2015. Without that, Canada’s trade deficit would have been $63 billion rather than the $22 billion it actually was. And this is after oil prices crashed in 2014-15.

The thing about renewable energy is that it’s generally not the sort of industry you can concentrate heavily in one area and export to others. So while it will eventually meet Canada’s domestic energy needs, it won’t make up for lost export revenue, and the transition will disproportionately affect some regions of the country.

Those who wish to change the government’s mind will have to think about how to address those issues.


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