The “Just Transition” Soviet style plans for Canada’s oilpatch

From the Frontier Centre for Public Policy

By Brian Zinchuk

The “Just Transition” legislation currently before the House of Commons Natural Resources Committee mentions unions a fair bit. It also mentions what are effectively five-year plans, which was a common practice for molding the economies of the Soviet Union and China, during their darkest years.

However, outside of big-inch pipeline construction, refining and the oil sands, there’s simply aren’t that many unionized companies in the oilpatch, at least in Saskatchewan. As in, next to none in the Land of Living Skies.

The legislation is question is Bill C-50, the Canadian Sustainable Jobs Act. The act is meant to assist workers in what the federal government had previously referred to as a “just transition,” away from fossil fuels-related jobs towards more “sustainable jobs.” It will create a “Sustainable Jobs Partnership Council” to draft five-year plans to do just that.

The Act’s full name is “An Act respecting accountability, transparency and engagement to support the creation of sustainable jobs for workers and economic growth in a net-zero economy.”

Specifically, Sec. 7 (a.) of the legislation focuses on unions. It says the Sustainable Jobs Partnership Council’s responsibilities include “advising the Minister and specified Ministers on strategies and measures to encourage growth in good-paying, high-quality jobs — including jobs in which workers are represented by a trade union — in a net-zero economy.”

That council also is supposed to have a balance of members who represent labour, Indigenous organizations and industry.

The thing is, there are no unions on drilling rigs. Or service rigs, for that matter.

I asked Mark Scholz, president of the Canadian Association of Energy Contractors (CAOEC) about this on Nov. 10. He said, “We do not have any unionized drilling or service rigs operating in Western Canada. Most of the oil and gas industry unionization is in the Alberta oilsands or LNG construction in British Columbia. As well, there are some drilling rig platforms operating off the coast of Newfoundland.”

He explained in Alberta and Saskatchewan, on service rigs, drilling rigs and directional drilling, there are no unions representing workers. And the CAOEC represents the companies operating almost every rig working in the oilpatch.

“In the drilling and service rig industry in Western Canada, there are no unions. That is just a simple fact,” he said.

Indeed, in 15 years of covering the Saskatchewan oil industry, and five years building pipelines prior to that, I’ve only encountered unionized workforces at the Regina Co-op Refinery Complex, and in big-inch pipeline construction contractors working for TC Energy, Enbridge, TransGas and Alliance Pipelines. I was one of those union pipeline workers.

But I’ve found them nowhere else, although there may be one unionized electrical firm operating in the Saskatchewan oilpatch.

Unionized labour is prevalent in the oil sands, however.

The legislation says this Sustainable Jobs Partnership Council must present an action plan by Dec. 31, 2025, and every five years after that. The government would also for a “Sustainable Jobs Secretariat”

Its role would be “enabling policy and program coherence in the development and implementation of each Sustainable Jobs Action Plan, including by coordinating the implementation of measures set out in those plans across federal entities, including those focused — at the national and regional level — on matters such as skills development, the labour market, rights at work, economic development and emissions reduction.”

It would also support the preparation and track the progress of the five-year plans, coordinate specific federal-provincial initiatives related to the plan, and provide administrative and policy support to the council.

For those who might not know their history, five year plans were a primary feature of economy of the Soviet Union under Joseph Stalin and the People’s Republic of China under Mao Tse-tung. They were the primary instrument for central planning of the economy in each of those nations, often resulting in massive transformations of industries and workforces, something the “Just Transition” legislation is designed to do – transform the oilpatch workforce into “sustainable jobs.”

The first Soviet five-year plan concentrated on developing heavy industry and collectivizing agriculture – directly leading into the Holodomor and the starvation of millions. My family was fortunate enough to get out of the Polish portion of Ukraine in 1930, just before the Holodomor began across the border in Soviet Ukraine in 1931.

This “Just Transition,” and its fitting upcoming five-year plan to totally revolutionize one of our key primary industries and workforce borrows just a little too much from history. We saw how that worked out.

Brian Zinchuk is editor and owner of Pipeline Online, and occasional contributor to the Frontier Centre for Public Policy. He can be reached at [email protected].

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REPORT: Alberta municipalities hit with $37 million carbon tax tab in 2023

Published on November 24, 2024

Todayville

Grande Prairie. Getty Images photo

From the Canadian Energy Centre

By Laura Mitchell

Federal cash grab driving costs for local governments, driving up property taxes

New data shows the painful economic impact of the federal carbon tax on municipalities.

Municipalities in Alberta paid out more than $37 million in federal carbon taxes in 2023, based on a recent survey commissioned by Alberta Municipal Affairs, with data provided to the Canadian Energy Centre.

About $760,000 of that came from the City of Grande Prairie. In a statement, Mayor Jackie Clayton said “if the carbon tax were removed, City property taxes could be reduced by 0.6 per cent, providing direct financial relief to residents and businesses in Grande Prairie.”

Conducted in October, the survey asked municipal districts, towns and cities in Alberta to disclose the amount of carbon tax paid out for the heating and electrifying of municipal assets and fuel for fleet vehicles.

With these funds, Alberta municipalities could have hired 7,789 high school students at $15 per hour last year with the amount paid to Ottawa.

The cost on municipalities includes:

Lloydminster: $422,248

Calgary: $1,230,300 (estimate)

Medicine Hat: $876,237

Lethbridge: $1,398,000 (estimate)

Grande Prairie: $757,562

Crowsnest Pass: $71,100

Red Deer: $1,495,945

Bonnyville: $19,484

Hinton: $66,829

Several municipalities also noted substantial indirect costs from the carbon tax, including higher rates from vendors that serve the municipality – like gravel truck drivers and road repair providers – passing increased fuel prices onto local governments.

The rising price for materials and goods like traffic lights, steel, lumber and cement, due to higher transportation costs are also hitting the bottom line for local governments.

The City of Grande Prairie paid out $89 million in goods and services in 2023, and the indirect costs of the carbon tax “have had an inflationary impact on those expenses” in addition to the direct costs of the tax.

In her press conference announcing Alberta’s challenge to the federal carbon tax on Oct. 29, 2024, Premier Danielle Smith addressed the pressures the carbon tax places on municipal bottom lines.

“In 2023 alone, the City of Calgary could have hired an additional 112 police officers or firefighters for the amount they sent to Ottawa for the carbon tax,” she said.

In a statement issued on Oct. 7, 2024, Ontario Conservative MP Ryan Williams, shadow minister for international trade, said this issue is nationwide.

“In Belleville, Ontario, the impact of the carbon tax is particularly notable. The city faces an extra $410,000 annually in costs – a burden that directly translates to an increase of 0.37 per cent on residents’ property tax bills.”

There is no rebate yet provided on retail carbon pricing for towns, cities and counties.

In October, the council in Belleville passed a motion asking the federal government to return in full all carbon taxes paid by municipalities in Canada.

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

Energy

Global fossil fuel use rising despite UN proclamations

Published on November 23, 2024

Todayville

From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

Major energy transitions are slow and take centuries, not decades… the first global energy transition—from traditional biomass fuels (including wood and charcoal) to fossil fuels—started more than two centuries ago and remains incomplete. Nearly three billion people in the developing world still depend on charcoal, straw and dried dung for cooking and heating, accounting for about 7 per cent of the world’s energy supply (as of 2020).

At the Conference of the Parties (COP29) in Azerbaijan, António Guterres, the United Nations Secretary-General, last week called for a global net-zero carbon footprint by 2050, which requires a “fossil fuel phase-out” and “deep decarbonization across the entire value chain.”

Yet despite the trillions of dollars already spent globally pursuing this target—and the additional trillions projected as necessary to “end the era of fossil fuels”—the world’s dependence on fossil fuels has remained largely unchanged.

So, how realistic is a “net-zero” emissions world—which means either eliminating fossil fuel generation or offsetting carbon emissions with activities such as planting trees—by 2050?

The journey began in 1995 when the UN hosted the first COP conference in Berlin, launching a global effort to drive energy transition and decarbonization. That year, global investment in renewable energy reached US$7 billion, according to some estimates. Since then, an extraordinary amount of money and resources have been allocated to the transition away from fossil fuels.

According to the International Energy Agency, between 2015 and 2023 alone, governments and industry worldwide spent US$12.3 trillion (inflation-adjusted) on clean energy. For context, that’s over six times the value of the entire Canadian economy in 2023.

Despite this spending, between 1995 and 2023, global fossil fuel consumption increased by 62 per cent, with oil consumption rising by 38 per cent, coal by 66 per cent and natural gas by 90 per cent.

And during that same 28-year period, despite the trillions spent on energy alternatives, the share of global energy provided by fossil fuels declined by only four percentage points, from 85.6 per cent to 81.5 per cent.

This should come as no surprise. Major energy transitions are slow and take centuries, not decades. According to a recent study by renowned scholar Vaclav Smil, the first global energy transition—from traditional biomass fuels (including wood and charcoal) to fossil fuels—started more than two centuries ago and remains incomplete. Nearly three billion people in the developing world still depend on charcoal, straw and dried dung for cooking and heating, accounting for about 7 per cent of the world’s energy supply (as of 2020).

Moreover, coal only surpassed wood as the main energy source worldwide around 1900. It took more than 150 years from oil’s first commercial extraction for oil to reach 25 per cent of all fossil fuels consumed worldwide. Natural gas didn’t reach this threshold until the end of the 20th century, after 130 years of industry development.

Now, consider the current push by governments to force an energy transition via regulation and spending. In Canada, the Trudeau government has set a target to fully decarbonize electricity generation by 2035 so all electricity is derived from renewable power sources such as wind and solar. But merely replacing Canada’s existing fossil fuel-based electricity with clean energy sources within the next decade would require building the equivalent of 23 major hydro projects (like British Columbia’s Site C) or 2.3 large-scale nuclear power plants (like Ontario’s Bruce Power). The planning and construction of significant electricity generation infrastructure in Canada is a complex and time-consuming process, often plagued by delays, regulatory hurdles and substantial cost overruns.

The Site C project took around 43 years from initial feasibility studies in 1971 to securing environmental certification in 2014. Construction began on the Peace River in northern B.C. in 2015, with completion expected in 2025 at a cost of at least $16 billion. Similarly, Ontario’s Bruce Power plant took nearly two decades to complete, with billions in cost overruns. Given these immense practical, financial and regulatory challenges, achieving the government’s 2035 target is highly improbable.

As politicians gather at high-profile conferences and set ambitious targets for a swift energy transition, global reliance on fossil fuels has continued to increase. As things stand, achieving net-zero by 2050 appears neither realistic nor feasible.