Energy
Federal government’s ’carbon-free’ electricity target far-fetched
From the Fraser Institute
By Elmira Aliakbari and Jock Finlayson and Tegan Hill
A recent report by the Canada West Foundation, which analyzed 25 major projects that entered the federal government’s review process between 2019 and 2023, found that all 25 were still stuck in the early stages (phase 1 or 2) of the four-phase process.
Did you know that the Trudeau government wants to “decarbonize” Canada’s electricity generation by 2035? That is, make carbon-free sources (e.g. wind, hydro and solar) the sole power source for electricity generation in Canada.
Is this possible? No.
As of 2023 (the latest year of available data), nearly 81 per cent of Canada’s electricity came from carbon-free sources. To replace the remaining 19 per cent that relies on fossil fuels over the next 10 years, Canada would need to add a massive amount of generation capacity.
Specifically, we would need approximately 23 new large hydroelectric dams similar in size to British Columbia’s Site C project. Of course, due to regulatory hurdles and approval processes, it takes a long time to plan and construct major electricity generation facilities in Canada. The Site C project took approximately 43 years (from initial feasibility and planning studies in 1971) to secure environmental certification in 2014. Construction finally began on the Peace River in northern B.C. in 2015 with completion expected in 2025—at a cost of at least $16 billion.
Alternatively, we would need more than two large scale nuclear power plants the size of Ontario’s Bruce Power, which took nearly two decades to complete with billions of dollars in cost overruns.
Or we’d need approximately 11,000 new large wind turbines, which would require clearing approximately 7,302 square kilometres of land (that’s larger than Prince Edward Island and nearly nine times larger than Calgary). The new turbines would also require substantial investments in backup power systems due to the wind’s intermittency, which of course would further drive-up costs across the electricity system.
And remember, as Canada’s population grows, electricity demand will increase significantly. The infrastructure mentioned above would only decarbonize Canada’s current electricity needs, without accounting for the additional capacity required to meet future demand.
And yet, despite its aggressive plan to decarbonize, the Trudeau government in 2019 introduced the Impact Assessment Act (IAA)—also known as Bill C-69—which added layers of uncertainty and complexity to project reviews. A recent report by the Canada West Foundation, which analyzed 25 major projects that entered the federal government’s review process between 2019 and 2023, found that all 25 were still stuck in the early stages (phase 1 or 2) of the four-phase process.
In other words, while Ottawa’s electricity decarbonization plan requires an unprecedented wave of new energy projects, the government’s own regulatory regime will make it harder for new projects to get off the ground.
The total costs of the federal government’s plan are incalculable. But we do know who will get hurt the most. Three provinces—Alberta, Saskatchewan and Nova Scotia—depend most heavily on fossil fuels to generate electricity. In Alberta, approximately 85 per cent of electricity comes from fossil fuels, mainly natural gas, while carbon-free sources generate only 15 per cent. Clearly, Alberta and these other provinces will face the greatest challenges—and heaviest burdens—in decarbonizing their grids.
In light of the basic realities of project construction timelines, regulatory hurdles and the massive financial investment required, the Trudeau government’s target to achieve 100 per cent fossil fuel-free electricity by 2035 is far-fetched. But the costs of pursuing that target will be very real and felt by all Canadians, with the size of the costs depending largely on where you live.
Authors:
From Resource Works
Ottawa’s emissions cap for oil and gas aims to cut emissions but risks raising costs for consumers and disrupting industry stability.
Ottawa has brought down a new emissions cap for the oil and gas industry, with a mandate to reduce emissions by 35 percent from 2019 levels by 2030 to support the federal government’s climate targets. While the federal government is celebrating the cap as a big step towards a more sustainable future, it is going to make life harder for consumers and businesses alike.
This cap is coming in at a time when the oil sector is finally gaining greater stability due to the expanded Trans Mountain pipeline (TMX), and the mandate would undermine that progress and press greater costs upon households and industries that are already adjusting to high inflation and uncertainty in world markets.
Now that TMX is operational, Canada’s oil producers have grown their access to international markets, most importantly in Asia and the West Coast of the United States. Much-needed price stability now exists for Western Canadian Select (WCS), cutting the discount against the U.S. West Texas Intermediate benchmark, enabling Canadian oil to compete more effectively.
Newfound stability means that Canadian consumers and businesses have benefited from slightly lower prices, and that industry has grown less dependent on a more limited domestic demand. However, Ottawa’s emissions cap does threaten this new balance, and the sector now has to deal with compliance costs that could be passed down to consumers.
In order to meet the cap’s targets, Canadian oil producers must heavily invest in carbon capture and storage (CCS) technologies, which is costly but essential. Major CCS projects include Shell’s Quest and the Alberta Carbon Trunk Line, both of which are already operational.
The Pathways Alliance is a coalition of six major oil sands companies and is preparing to invest in one of the world’s largest networks for carbon storage. These efforts are crucial for reducing emissions, despite requiring vast amounts of capital.
Those in the industry are worrying that the emissions cap will push resources away from production and, instead, towards compliance, adding costs that will be borne by fuel prices and other consumer products.
Ottawa has portrayed the cap as an essential measure for meeting the federal government’s climate goals, with Environment Minister Jonathan Wilkinson labeling it “technically achievable.” Nonetheless, industry players argue that the timeline does not align with the practicalities of scaling CCS and other strategies aimed at decarbonizing.
Strathcona Resources executive chairman Adam Waterous pointed out the “stroke-of-the-pen” risk, in which shifting political landscapes imperil ongoing investments in carbon capture. Numerous oil producers feel that without certainty in carbon price stability, Ottawa’s cap will result in an unstable business environment that will push investment away from production.
Business leaders do not share the federal government’s optimism about the cap and see it as a one-sided approach that fails to reckon with market realities. The Pathways Alliance, which includes companies like Suncor Energy and Canadian Natural Resources, has been frustrated in its multiple attempts to get federal support to fund its $16.5-billion CCS project.
Rather than imposing these new limits, energy industry advocates argue that the government should provide targeted incentives like “carbon contracts for difference” (CCfDs), which help to stabilize carbon credit prices and reduce financial risk among investors. These measures would enable the energy sector to decarbonize without putting a greater burden on consumers.
The cap’s timing also raises concerns about the Canada-U.S. relationship. Canada has traditionally been a stable supplier of energy and helps to bolster U.S. energy security. However, as the U.S. increases its reliance on Canadian oil, the cap could disrupt this trade relationship. Lowered production levels would leave the economies of both the U.S. and Canada vulnerable, potentially disrupting energy prices and supply stability.
For households across Canada, the emissions cap could mean further financial strain. The higher costs of compliance passed to oil producers will mean higher prices at the pump and more expensive heating costs at a time when Canadian consumers are already struggling financially.
Businesses will also face increasing operating costs, which will be passed down to consumers via more expensive goods and services. Furthermore, higher costs and reduced production will erode Canada’s competitive advantage in the global energy market, slowing economic growth and risking job losses in the energy sector.
So, while Ottawa can laud its emissions cap as a necessary action on the climate, the implications for consumers and businesses are tremendous. Working with industry to find pragmatic, collaborative solutions is how Ottawa can avoid creating more financial burdens for Canadians.
Energy Talking Points
By Alex Epstein
COP 29 seeks net-zero, which would radically increase climate danger and ruin billions of lives
COP 29 seeks net-zero—rapidly eliminating fossil fuels—in the name of protecting us from climate danger.
In reality, net-zero would radically increase climate danger and ruin billions of lives.
People should condemn COP and embrace energy freedom.
- The COP 29 climate conference has a consistent theme: previous COPs have done an okay job of restricting fossil fuels in the name of reducing greenhouse gas emissions, but this one needs to eliminate fossil fuel use far faster so as to reach net-zero by 2050.This is 180° wrong.
- COP 29’s goal of rapidly eliminating fossil fuels to reach net-zero is deadly because:1. Fossil fuels are making us far safer from climate along with improving every other aspect of life
2. Even barely implementing COP’s net-zero agenda has been disastrous.
Fossil fuels are making us far safer from climate.
- The justification of COP 29’s net-zero agenda is that fossil fuel use is causing an escalating “climate crisis.”But if we look at the full effects of fossil fuels on climate danger, we find that overall fossil fuels have dramatically reduced climate danger.
- Myth: Climate danger is higher than ever because of fossil fuels’ CO2 emissions.Truth: We have a 98% decline in climate disaster deaths due to our enormous fossil-fueled climate mastery abilities: heating and cooling, infrastructure-building, irrigation, crop transport.¹
- Myth: Mainstream science shows that rising CO2 is an “existential threat” that will soon cause global catastrophe and then apocalypse.Truth: Mainstream science shows that rising CO2 levels will lead to levels of warming and other changes that we can master and flourish with.
- For the full story on how fossil fuels overall make us far safer from climate and will continue to do so, read this:
The climate safety denial movement
·Jan 25Read full story
Even barely implementing COP 29’s net-zero agenda has been disastrous.
- While COP 28 leaders bemoan how slow their restriction of fossil fuels in pursuit of net-zero has been, even “slow” restriction has caused a global energy crisis.
- Myth: Net-zero policies are new and exciting.Truth: Net-zero policies have caused catastrophic energy shortages even with minuscule implementation. Just by slowing the growth of fossil fuel use, not even reducing it, they have caused global energy shortages advocates didn’t warn us of.
- Minuscule net-zero policies causing huge problems:US: frequent power shortages after shutting down fossil fuel power plants.
EU: deadly fossil fuel dependence after restricting their domestic fossil fuel industry.
Poor nations: can’t afford fuel due to global restrictions.²
- If just restricting the growth of fossil fuels in a world that needs far more energy is catastrophic, what would it mean to reduce CO2 emissions by the 50% many “climate emergency” advocates want by 2030 and the 100% they want by 2050?Global misery and premature death.
Every “net zero by 2050” myth, refuted
·September 21, 2023Read full story
COP 29’s net-zero agenda harms poor nations most of all.
- The net-zero movement led by COP is particularly dangerous to Africa and other poor regions.Consider: 1/3 of the world uses wood and animal dung for heating and cooking. 3 billion use less electricity than a typical American refrigerator.
Only fossil fuels can provide the energy they need to develop.³
- Every prosperous country has developed using fossil fuels.No poor country has been able to develop to the point of prosperity without massive fossil fuel use.
Development requires energy, and fossil fuels are a uniquely cost-effective and scalable source of energy.⁴
- Fossil fuels are so uniquely good at providing low-cost, reliable energy for developing nations that even nations with little or no fossil fuel resources have used fossil fuels to develop and prosper. E.g. South Korea (83% fossil fuels), Japan (85% fossil fuels), Singapore (99% fossil fuels).⁵
- The obvious path for African development and prosperity is to use fossil fuel whenever it’s the most cost-effective option, which is most of the time, and certainly to responsibly produce the significant fossil fuel resources that exist in Africa.Yet COP tells Africa to forgo fossil fuels.
- COP 29 is fundamentally immoral because its goal of “net zero by 2050” would deprive billions of the energy they need to prosper.Good people who care about energy and human flourishing should condemn COP and net-zero can champion energy freedom instead.
The path forward: reject net-zero and embrace energy freedom.
- The path to global prosperity and increasing climate safety is energy freedom: allowing us to use all forms of energy so we are prosperous, resilient to climate danger, and in the long-term innovate new, truly cost-effective alternatives to fossil fuels.
- Rejecting net-zero and embracing energy freedom means scrapping the Paris Agreement, whose pursuit of net-zero is committing virtually all nations, including the world’s poorest, to rejecting the fossil fuels they need to prosper.
- While many at COP are saying that a US withdrawal from Paris by the next administration would be irresponsible, it is the only responsible action to take given that Paris commits us to banning most of the fossil fuels that we and our allies need.
- Rejecting net-zero, including the Paris Agreement, and embracing energy freedom requires collaboration among pro-freedom countries like the US, developing nations such as African nations, and any reasonable energy companies.
- Developing nations, above all African nations, need to reject net-zero and embrace energy freedom: the freedom to produce and use all cost-effective sources of energy—including, essentially, fossil fuels—which means rejecting all net-zero targets. Here’s a blueprint for doing it.
My Message to Leaders at African Energy Week 2023
·October 17, 2023Read full story - The energy industry and obviously the fossil fuel industry should condemn COP and its net-zero goal. Appalling, ExxonMobil and others are actually calling for the US to stay in the net-zero Paris Agreement!Here’s why this is both immoral and impractical.
The lesson of fossil fuel advocates’ failure at COP 28: stop “Arguing to 0,” start “Arguing to 100”
·December 14, 2023Read full story - Any attendee of COP 29 should thoroughly reject the conference’s “net zero by 2050” goal and instead proudly advocate for energy freedom and climate safety through climate mastery.If they do that, they have a real chance at stopping the conference from ruining the world.
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UC San Diego – The Keeling Curve
For every million people on earth, annual deaths from climate-related causes (extreme temperature, drought, flood, storms, wildfires) declined 98%–from an average of 247 per year during the 1920s to 2.5 per year during the 2010s.
Data on disaster deaths come from EM-DAT, CRED / UCLouvain, Brussels, Belgium – www.emdat.be (D. Guha-Sapir).
Population estimates for the 1920s from the Maddison Database 2010, the Groningen Growth and Development Centre, Faculty of Economics and Business at University of Groningen. For years not shown, population is assumed to have grown at a steady rate.
Population estimates for the 2010s come from World Bank Data.
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