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Energy

Why Bad Climate Legislation Is Worse Than No Climate Legislation

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13 minute read

From Michael Schellenberger

Moderate Democratic Senators Joe Manchin & Krysten Sinema Are Right to Oppose the Clean Energy Performance Program

Progressives are angry that moderate Democratic Senator Joe Machin has reportedly opposed the inclusion of climate-related legislation in President Joe Biden’s budget “This is absolutely the most important climate policy in the package,” said Leah Stokes, a Canadian political scientist who helped write the legislation. “We fundamentally need it to meet our climate goals. That’s just the reality.”

But that’s not the reality. The “Clean Energy Performance Program” is not needed to meet climate goals, and might actually undermine them.

Consider Waxman-Markey. That’s the name of the “cap and trade” climate legislation that passed the House but failed in the Senate in 2010. It had a climate goal of reducing U.S. greenhouse gas emissions by 17 percent below 2005 levels by the year 2020. Instead, the U.S. reduced its emissions by 22 percent.

Had cap and trade legislation passed in the Senate, emissions would have declined less than 22 percent, because Waxman-Markey so heavily subsidized coal and other fossil fuels. As the Los Angeles Times reported at the time, “the Environmental Protection Agency projects that even if the emissions limits go into effect, the U.S. would use more carbon-dioxide-heavy coal in 2020 than it did in 2005.”

The same thing would likely have been true for the Clean Energy Performance Program, which lock in natural gas. Consider France. According to the Commision de Regulation de L’Energie, €29 billion (US$33) billion was used to purchase wind and solar electricity in mainland France between 2009 and 2018. But the money spent on renewables did not lead to cleaner electricity. In fact, the carbon-intensity of French electricity increased.

After years of subsidies for solar and wind, France’s 2017 emissions of 68g/CO2 per kWh was higher than any year between 2012 and 2016. The reason? Record-breaking wind and solar production did not make up for falling nuclear energy output and higher natural gas consumption. And now, the high cost of renewable electricity is showing up in French household electricity bills.

Some pro-nuclear people supported the proposed Clean Energy Performance Program. They claimed it would have saved existing nuclear plants at risk of closure. According to the U.S. Energy Information Administration, the closure of nuclear plants including Diablo Canyon in California, will result in nuclear energy in the U.S. declining by 17% by 2025. If the Program had passed, some pro-nuclear people believe, plants like Diablo Canyon could have been saved.

But the Clean Energy Performance Program would not have saved Diablo Canyon for the same reason it would not have saved Indian Point nuclear plant, which closed in New York, earlier this year: progressive Democratic politicians are forcing nuclear plants to close, and at a very high cost to ratepayers.

If the Clean Energy Performance Program had passed into law, Diablo Canyon’s owner, Pacific Gas & Electric, would simply have passed the $500 million to $1.5 billion penalty imposed by the Program onto ratepayers, along with the other billions in costs related to closing Diablo Canyon 40 years earlier than necessary. The same would have happened with Indian Point.

Where there is political support for saving nuclear plants, state legislators and governors save nuclear plants, as they did in Illinois a few weeks ago, and as they have done in Connecticut, New Jersey, and with up-state nuclear plants in New York. In other states, nuclear plants are protected from cheap natural gas by regulated electricity markets. And now, with natural gas prices rising dramatically, any nuclear plants at risk of closure for economic reasons are no longer at risk.

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What threatens the continued operation of nuclear power plants, and nuclear energy in general, is the continued subsidization of renewables, which the Clean Energy Performance Program would have put on steroids. Under the program, utilities would have received $18 for each megawatt-hour of zero-emissions energy it produces between 2023 to 2030, on top of the existing $25 per megawatt-hour subsidy for wind energy.

Under such a scenario, notes energy analyst Robert Bryce, a wind energy company “could earn $43 per megawatt-hour per year for each new megawatt-hour of wind energy it sells. That’s a staggering sum given that the wholesale price of electricity in New York last year was $33 per megawatt-hour. In Texas, the wholesale price of juice was $22 per MWh.”

Manchin is joined in his opposition to the Plan by moderate Democratic Arizona Senator, Krysten Sinema, and understandably so. The legislation would cost Arizona ratepayers nearly $120 billion in additional electricity costs, according to energy analysts Isaac Orr and Mitch Rolling of the American Experiment. “This would result in a 45 percent increase in electricity prices by 2031, compared to 2019 rates,” they note.

As troubling, the Clean Energy Performance Program would increase dependence on solar panels made in China by incarcerated Uighyr Muslims living in concentration camps and against whom the Chinese government is committing “genocide,” according to the U.S. State Department. New research shows that China made solar panels cheaper through the use of forced labor, heavy government subsidies, and some of the dirtiest coal in the world. The Program would have done nothing to shift production of solar panels back to the U.S.

Nor would the legislation have done anything to internalize the high cost of solar panel waste disposal. Most solar panels become hazardous waste, and create dust from heavy metals including lead, as soon as they are removed from rooftops. A major study published in Harvard Business Review earlier this year found that, when the high cost of managing toxic solar panel waste is eventually accounted for, the true cost of solar electricity will rise four-fold.

As troubling, the continued expansion of weather-dependent renewables will increase electricity costs and blackouts across the United States, as they did in California and Texas. Those renewables-driven blackouts were likely on Senator Manchin’s mind when he made his decision to oppose the Clean Energy Performance Plan. He certainly knows about the problems of renewables in Texas and California, since I discussed them directly with Manchin when I testified before his committee earlier this year.

A better approach would be for Congress to seek nuclear-focused legislation to expand nuclear from its current 19% of U.S. electricity to 50% by 2050. It should take as a model the British government’s announcement yesterday that it would put nuclear energy at the center of its climate plans. Global energy shortages triggered by the lack of wind in Europe have led nations to realize that any efforts to decarbonize electricity grids without creating blackouts must center nuclear power, not weather-dependent solar and wind.

Environmental Progress and I met with British lawmakers in 2019 to advocate for a greater focus on nuclear. At the time, many British energy analysts, as well as ostensibly pro-nuclear climate activists, Mark Lynas and George Monbiot, were telling the public that their nation did not need more nuclear, as Britain could simply rely more on wind energy, and natural gas. Now, electricity prices are skyrocketing and factories are closing in Britain, due to a bad year for wind.

It was a strange experience to be alone in Britain, without support from supposedly pro-nuclear Britons, in urging lawmakers to build more nuclear plants, but I was similarly alone in many other parts of the world, and got on with the task. Happily, one year later, former Extinction Rebellion spokesperson Zion Lights joined me in advocating for nuclear, and quickly forced the government to agree to a nuclear build-out.

Today, in the U.S., there is a growing grassroots movement for nuclear energy, one which saved nuclear plants, twice, in Illinois, and other states, and is gearing up to save Diablo Canyon nuclear plant in California. Doing so will require a new governor, since the current one, Gavin Newsom, made closing the plant a feature of his sales pitch to powerful environmental groups, including Sierra Club and Natural Resources Defense Fund which are, like Newsom himself, heavily funded by natural gas and renewable energy companies that stand to benefit from the Diablo’s destruction.

Leadership at the national level will need to come from Senators Manchin and Sinema. While a significant amount of electricity policy is determined by the states, the Senate can play a constructive role in maintaining the reliability, resiliency, affordability, I testified to Senator Manchin and other committee members. Senator Sinema is from Arizona, a state with the largest nuclear plant in the U.S., Palo Verde, and which is a model of how to make electricity both low in emissions, and in costs.

With the Clean Energy Performance Program now apparently dead, the Congress, led by Manchin and Sinema, should take policy action to not only keep operating the nuclear plants that have been critical to preventing power outages in recent years, but also expand them.

About Michael Shellenberger

Michael Shellenberger is a Time Magazine “Hero of the Environment,”Green Book Award winner, and the founder and president of Environmental Progress.

He is author of the best-selling new book, Apocalypse Never (Harper Collins June 30, 2020), which has received strong praise from scientists and scholars. “This may be the most important book on the environment ever written,” wrote climate scientist Tom Wigley. “Apocalypse Never is an extremely important book,” says historian Richard Rhodes, who won the Pulitzer Prize for The Making of the Atomic Bomb. “Within its lively pages, Michael Shellenberger rescues with science and lived experience a subject drowning in misunderstanding and partisanship. His message is invigorating: if you have feared for the planet’s future, take heart.”

Additional Reading:

Why Biden’s Climate Agenda Is Falling Apart

Nuclear Plant Closures And Renewables Increase Electricity Prices & Unreliability, Testifies Michael Shellenberger to U.S. Senate

China Made Solar Cheap With Coal, Subsidies, And “Slave” Labor — Not Efficiency

Why Everything They Said About Solar Was Wrong

Energy

Ontario Leads the G7 by Building First Small Modular Reactor

Published on

A concept image of a GE Hitachi BWRX-300 small modular reactor (SMR), the nuclear technology Ontario Power Generation is using for its new project adjacent to the existing Darlington nuclear plant. (GE-Hitachi)

From Energy Now

Construction will create 18,000 Canadian jobs, add up to $500 million annually to Ontario’s economy and help secure clean, reliable energy

With electricity demand in Ontario set to soar by at least 75 per cent by 2050, the Ontario government has approved Ontario Power Generation’s (OPG) plan to begin construction on the first of four small modular reactors (SMRs) at the Darlington nuclear site. Once complete, this SMR will be the first of its kind in the G7, producing enough reliable, affordable and clean electricity to power the equivalent of 300,000 homes, supporting thousands of good-paying jobs across the province and helping secure Ontario’s energy supply for decades to come.

The construction of the four units will support the government’s plan to protect Ontario’s workers and economy by creating up to 18,000 Canadian jobs and injecting $500 million on average annually into Ontario’s economy. The construction, operation and maintenance of the four units will add $38.5 billion to Canada’s GDP over the next 65 years. The government has worked with OPG to ensure that 80 per cent of project spending goes to Ontario companies and that construction and operations will protect Ontario workers and jobs by sustaining an estimated 3,700 highly-skilled, good-paying jobs for the next 65 years.

“This is a historic day for Canada as we start construction on the first small modular reactor in the G7, creating 18,000 jobs for Canadians,” said Stephen Lecce, Minister of Energy and Mines. “This nation-building project being built right here in Ontario will be led by Canadian workers using Canadian steel, concrete and materials to help deliver the extraordinary amount of reliable and clean power we will need to deliver on our ambitious plan to protect Ontario and unleash our economy.”

The BWRX-300 is a small-scale nuclear reactor that uses commercially available uranium to generate power. The four SMRs will be vital to powering new homes, historic investments to build Ontario and fuel a thriving economy. Once complete, they will produce 1,200 megawatts (MW) of electricity, enough to power the equivalent of 1.2 million homes, to help bridge a power gap that could emerge in the early 2030s in the absence of net-new baseload power sources added to the grid.

More than eighty Ontario companies have already signed agreements with OPG to deliver this first-of-a-kind project, establishing themselves as leaders in the growing domestic and global markets for new nuclear technologies. The government has also negotiated additional commitments from GE Hitachi that will create jobs in Ontario, that will soon be unveiled.

Ontario’s Independent Electricity System Operator (IESO) concluded that the Darlington New Nuclear Project is the best option to meet growing demand in terms of costs and risks, when compared against non-emitting generation alternatives. This, combined with OPG’s outstanding track-record on the Darlington Refurbishment Project, factored into the government’s decision to support the Darlington New Nuclear Project.

Within Canada, the Ontario government and OPG are collaborating with power companies in Alberta, Saskatchewan and New Brunswick as they work towards the deployment of SMRs in their jurisdictions. Around the world, the government has helped secure job-creating agreements that deploy Made-In-Ontario components to build SMR’s for the world.

Advancing construction on the Darlington New Nuclear Project SMRs is just one part of Ontario’s Affordable Energy Future, the government’s vision as it plans for rising energy demand.

A concept image of a GE Hitachi BWRX-300 small modular reactor (SMR), the nuclear technology Ontario Power Generation is using for its new project adjacent to the existing Darlington nuclear plant. (GE-Hitachi)

Quick Facts

  • The government is supporting OPG’s $20.9 billion budget for the Darlington New Nuclear Project, which includes site preparation, engineering and design work to date, as well as the construction of all four small modular reactors.
  • During project development OPG will continue to build respectful, collaborative relationships with the communities of the Williams Treaties First Nations, while pursuing potential opportunities for their equity partnership in the project. This would be a first-of-its-kind partnership in Canada for nuclear energy generation, reflecting the government and OPG’s commitment to ensure local First Nations benefit from new projects in their territories.
  • Once complete, the Darlington New Nuclear Projects four SMRs will produce 1,200 megawatts (MW) of electricity, enough to power 1.2 million homes.
  • According to the IESO, the province would need to build up to 8,900 MW of wind and solar paired with battery storage to replace the output of four SMRs. The IESO also concluded this alternative approach would carry significant risks including significant land requirements and the need for large scale transmission build out.
  • The first SMR will cost $6.1 billion, along with costs for systems and services common to all four SMRs of $1.6 billion. Costs are expected to decline with each subsequent unit as efficiencies are gained, similar to the Darlington Refurbishment Project.
  • OPG began site preparation for the first SMR in December 2022. Ontario announced that OPG would begin planning and licensing for three additional SMRs, for a total of four SMRs at the Darlington nuclear site in July 2023. OPG obtained a Licence to Construct (LTC) for Unit 1 from the Canadian Nuclear Safety Commission (CNSC) in April 2025.
  • To reduce costs the Government of Ontario is exploring potential financial instruments that would benefit ratepayers, and in parallel, OPG continues to explore other optimal financing arrangements.

Quotes

“This is a proud achievement for Ontario – this small modular reactor project is not only powering our future, it is driving real results for our economy. With thousands of good-paying jobs, billions in economic impact, and made-in-Ontario expertise leading the way, we are showing the world what our workers and industries can achieve.”

– Peter Bethlenfalvy
MPP, Pickering-Uxbridge

 

“The launch of Canada’s first grid-scale small modular reactor at Darlington marks a major milestone for our Province—powering growth, creating jobs, and securing a clean energy future right here in Durham Region. This transformative project will strengthen our Region’s economy, provide long-term careers, and reinforce Durham’s role as a leader in clean nuclear innovation.”

– Lorne Coe
MPP, Whitby, Parliamentary Assistant to the Minister of Children, Community and Social Services, and Parliamentary Assistant to the Minister of Colleges, Universities, Research Excellence, and Security

 

“Today’s announcement is the next step to strengthening Ontario and Canada’s energy security while supporting thousands of good-paying jobs for workers in the region. Once complete, this SMR will be the first of its kind in the G7, delivering clean reliable and affordable electricity to homes and businesses.”

– Todd McCarthy
MPP, Durham

 

“As the first mover on SMRs, this made-in-Ontario project will create jobs for the province’s workers, contracts for Ontario’s booming supply chain, and showcase our capabilities and expertise to the world to further grow our domestic industry while strengthening Canada’s energy security. As we saw through the refurbishment project, building a fleet of SMRs with the support of Ontario’s strong nuclear supply chain will provide further opportunities to learn, identify efficiencies, and expand the supply chain. All of this invaluable, irreplaceable experience will prepare us to take on the next large nuclear project.”

– Nicolle Butcher
President and Chief Executive Officer, OPG

 

“This is a proud moment for GE Vernova Hitachi and Ontario as we move from vision to reality with construction of the G7’s first SMR, the BWRX-300. With dozens of Ontario-based suppliers contributing to this project, we’re not just building a reactor—we’re generating thousands of good-paying jobs, driving investment into communities across the province, and reinforcing Ontario’s global leadership in clean energy technology. That leadership is already opening doors to international export opportunities for Ontario companies, helping position our province as a global hub for next-generation nuclear innovation. GE has been part of Canada’s nuclear story from the very beginning, and we’re honoured to carry that legacy forward by delivering a made-in-Ontario solution that strengthens our economy and powers our future.”

– Lisa McBride
Country Leader, GE Vernova Hitachi SMR Canada

 

“Clarington is excited to team up with the Ontario Government and OPG to advance new nuclear technology. As we host the first SMR in the G7, we’re paving the way for clean energy that will benefit everyone. Our leadership in this global nuclear renaissance is thrilling. The Darlington SMR project promises thousands of jobs during construction and hundreds more during operations, boosting economic growth and job creation in Clarington now and in the future.”

– Adrian Foster
Mayor, Clarington

 

“The Ontario Government’s approval of OPG’s small modular reactor project at Darlington represents a major milestone in the province’s clean energy strategy. This project will deliver long-term economic and environmental benefits across Ontario, including thousands of skilled jobs and a reliable, low-carbon power supply. We commend the Province for its continued commitment to investing in innovative and future-focused energy solutions.”

– Olena Hankivsky
Mayor, Municipality of Port Hope

 

“I am excited to be part of this historic announcement. Haldimand County looks forward to working with Minister Lecce on bringing clean energy to Ontario, thousands of jobs and millions of dollars annually into Ontario’s Economy.”

– Shelley Ann Bentley
Mayor, Haldimand County

 

“The Township of St. Clair recognizes the very real impacts the projected shortage of power will have not only in our municipality, but also province-wide. That is why the Ontario Government’s announcement today authorizing the construction of the first of four small modular reactors at the Darlington nuclear site is very exciting.”

– Jeff Agar
Mayor, Township of St. Clair

 

“The Government of Ontario’s approval for OPG to begin construction on its trailblazing Darlington New Nuclear Project is leading the way in delivering the next generation of nuclear plants across North America and internationally. Aecon is proud to bring its diverse nuclear expertise and multidisciplinary capabilities to play a prominent role in safely executing this exciting project to meet the energy demands of future generations in Ontario.”

– Jean-Louis Servranckx
President and Chief Executive Officer, Aecon Group Inc.

 

“This is an exciting day for Clarington, Durham Region, and Canada. Being home to the first site globally to start construction on SMRs demonstrates the leadership role that our region plays in the new nuclear sector. This is a monumental step forward by the Ontario Government for energy security and availability in Canada. Congratulations to OPG on this milestone.”

– John Henry
Regional Chair and Chief Executive Officer, Regional Municipality of Durham

 

“Ontario’s SMR project builds on Ontario’s clean energy advantage by putting Ontario at the forefront of clean energy knowledge and technology that can be exported around the world. The OEA supports the Ontario Government’s plan to make the Province a world leader in nuclear energy and maintain nuclear power as a core element of Ontario’s clean affordable energy sector.”

– Vince Brescia
President and Chief Executive Officer, Ontario Energy Association

 

“Today’s announcement by the Government of Ontario turns vision into reality for the Province’s clean energy future. The construction of the Darlington New Nuclear Project will deliver clean, reliable power that our economy needs to thrive, while driving innovation, investment, and good-paying jobs across the province. By deploying the first grid-scale SMR in the G7, Ontario is cementing its place as a global nuclear leader and an emerging energy superpower.”

– Giles Gherson
President and Chief Executive Officer, Toronto Region Board of Trade

 

“The start of construction on this SMR is a meaningful step forward for Ontario and for Canada. It reflects what can be accomplished through strong leadership, technical excellence, and a clear vision for the future. It also carries real opportunity—for Indigenous-owned businesses to be part of critical infrastructure projects in ways that create long-term impact. We’re proud to support OPG in this work and to stand alongside other supply chain partners helping to drive this project forward.”

– Clint Keeler
President, Voyageur Services Limited

 

“This historic milestone by the Government of Ontario is not only a bold step forward in clean energy innovation, but a powerful demonstration of how local businesses can directly contribute to—and benefit from—nation-leading projects. We are proud to see so many Clarington businesses directly support the construction of the first SMR. We commend OPG and the Provincial Government for their commitment to local economic development and for working with Ontario-based suppliers. Their leadership sets the tone for what’s possible when industry and community work together to power our future.”

– Bonnie Wrightman
Executive Director, Clarington Board of Trade

 

“Ontario’s historic investment in small modular reactors is a powerful statement of confidence in our province’s skilled workforce and energy future. The Darlington SMR project not only secures clean, reliable power for generations, it creates thousands of good-paying jobs and reinforces our position as a global leader in nuclear innovation. LiUNA members are proud to be at the forefront of this transformative project, building the infrastructure that powers our economy, strengthens our communities, and ensures prosperity for working families across Ontario.”

– Joseph Mancinelli
International Vice President, Canadian Director, Labourers’ International Union of North America (LiUNA)

 

“The Ontario Building Trades and Helmets to Hardhats Canada proudly support the Ontario Government’s development of Small Modular Reactors (SMRs) as a key part of Canada’s clean energy future. The construction of SMRs offers prosperous careers for Building Trades workers including Canada’s veterans transitioning to civilian life. We stand ready to help build this next generation of nuclear technology safely, efficiently, and with the highest standards of craftsmanship.”

– James Hogarth
President, Provincial Building and Construction Trades Council of Ontario

 

“To begin construction on the SMR’s at Darlington amidst significant global uncertainty makes it crystal clear that Ontario is not about to hit the pause button or sit on the sidelines and wait. Rather at this pivotal time OPG and the Province are showing their commitment to ensuring that Ontario remains a front runner in clean, reliable baseload power production. At a time when we need to invest in our own energy security, and in the very men and women who power our great province… the government is doing just that in creating jobs, creating clean power, and creating the supply chain that will position us to showcase our world leading nuclear expertise. The International Brotherhood of Boilermakers congratulates OPG, the vendor partners, and the Ontario Government on their announcement to begin the construction phase of North America’s first grid-sized SMR.”

– Jonathan White
Director, International Brotherhood of Boilermakers

 

“The power sector labour market partners have negotiated a 5-year agreement that will provide the labour relations stability to make this historic project by the Ontario Government and OPG a success.”

– Alex Lolua
General Manager, Electrical Power Systems Construction Association

 

“As the union representing the professionals who operate Ontario’s nuclear facilities, the Society of United Professionals is glad to see the Government of Ontario’s approval for the construction of the Darlington Small Modular Reactor. Projects like this will mean more good quality, union jobs that you can raise a family on and support our communities. To electrify our economy, meet our long-term clean energy needs, and achieve Canada’s energy independence we will need SMRs to complement our large-scale CANDU nuclear facilities to power our future.”

– Rebecca Caron
President, Society of United Professionals

 

“Today marks a major step forward for Canada’s clean energy future. The start of construction on the first grid-scale small modular reactor in the G7 is a clear signal that Ontario is serious about decarbonization, energy security, economic growth and international opportunities. With a strong domestic supply chain and world-class expertise, our industry is ready to deliver, bringing clean, reliable power to more Canadians while supporting good jobs and local communities.”

– George Christidis
Interim President and Chief Executive Officer, Canadian Nuclear Association

 

“Salit Steel is proud to play a role in this landmark clean energy project. As a Canadian, family-owned company with over 120 years of experience in the steel industry, we are deeply committed to supporting nation-building infrastructure. We’re honoured to contribute our reinforcing steel expertise to a made-in-Ontario solution that will power homes, create good-paying local jobs, and position Canada as a global leader in nuclear innovation. This project by the Ontario Government and OPG is a pivotal step toward a cleaner, more sustainable energy future, and we’re proud to help build its foundation.”

– Steven Cohen
Owner, Salit Steel

 

“Small modular reactors are pivotal to Ontario’s clean energy and economic future. Ontario Tech University is pleased to see the commencement of construction on the first of four SMRs begin at Darlington. As the home of Canada’s only accredited undergraduate nuclear engineering program, we are dedicated to training the next generation of nuclear industry talent from entry to expert. Our students are uniquely positioned to support these investments and will drive innovation and lead the future of clean energy right here in Durham Region.”

– Dr. Steven Murphy
President and Vice-Chancellor, Ontario Tech University

 

“The Ontario Chamber has long advocated for investments in diverse forms of clean energy — including SMRs — to help meet electricity demand for a growing economy. Today’s announcement – and its exciting opportunities for Ontario companies – supports our businesses and workers, positions Ontario as a global nuclear innovation leader, and helps ensure clean, reliable and affordable energy to power our future.”

– Daniel Tisch
President and Chief Executive Officer, Ontario Chamber of Commerce

 

“The IBEW Local Union 353 appreciates all the continued hard work and support by the Ontario Government – we maintain the growth in developing education programs that support our members in preserving the quality of work that our customers expect. The experience with our members and contractors that we have gained over the last 10 years together has helped us to build valued partnerships and expand community outreach programs that are building our province.”

– Salvatore Maltese
Business Rep, IBEW Local Union 353

 

“BWXT applauds the leadership shown by the Ontario government and OPG to secure the economic and environmental future of Ontario through this historic nuclear energy project. Our team is now manufacturing the first reactor pressure vessel for Darlington and we proudly embrace our role as a key partner to the Canadian nuclear industry.”

– John MacQuarrie
President, Commercial Operations, BWXT

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Economy

Canada’s Energy Wealth Is Bleeding South

Published on

From the Frontier Centre for Public Policy

By Marco Navarro-Genie

Without infrastructure, Canada is losing billions while the U.S. cashes in on our oil and gas

Canada’s energy wealth is stuck in traffic, and our American neighbours are cashing in. It’s worse than that. Canada is bleeding millions of dollars daily because it lacks the infrastructure to export its natural resources efficiently.

While our oil and gas continue to flow—mainly to the United States—provinces like Alberta and British Columbia are forced to sell at steep discounts. This isn’t just an economic inefficiency; it’s a structural failure of national policy. The beneficiaries? American businesses and their governments which pocket the profits and tax revenues that should be circulating through the Canadian economy. This is no way to achieve economic sovereignty for Canada.

With U.S. interests reaping the rewards, this should have been a central talking point when Prime Minister Carney met with President Trump earlier this month.

Ottawa often offers the recent completion of the Trans Mountain Expansion (TMX) pipeline as an example of federal support for the energy sector. But such claims are misleading. Kinder Morgan, a private enterprise, had initially planned to build the extension without a penny from taxpayers. It withdrew only after being crippled by federal regulatory delays and political uncertainty.

Ottawa stepped in not as a benevolent saviour to help Albertans, but to prevent lawsuits and save face—ultimately overpaying for the pipeline and watching construction costs balloon to nearly six times the original estimate.

To now declare this bungled project a “gift” to Alberta, as a recent op-ed in the Toronto Star did, is not only tone-deaf: it’s an insult. It ignores the fact that Alberta’s taxpayers helped finance the very project Ottawa botched. It also reveals an astonishing lack of understanding of the historical, economic and political dynamics at play between Ottawa and Western Canada.

The tragedy is that TMX, despite its importance, is insufficient. Our infrastructure bottlenecks remain. With each passing day, Canada forfeits wealth that could fund essential improvements in health care, education and national defence.

According to the Frontier Centre for Public Policy, which has developed a real-time tracker to monitor these losses, the price differential between what we could earn on global markets versus what we settle for domestically adds up to $26.5 billion annually.

Ottawa’s reluctance to greenlight new infrastructure is a primary cause of this problem. Ironically, the losses from this reluctance in a single year would be enough to pay for another TMX, mismanaged or not. The solution lies in a national commitment to building utility corridors: designated routes that facilitate the movement of energy, goods and services unhindered across provincial boundaries.

Carney’s recent promise to remove all interprovincial trade barriers by July 1 is a nice soundbite. But unless it includes meaningful infrastructure commitments, it is bound to fail like every other rhetorical flourish before it.

Canadians should be rightly skeptical. After all, what Ottawa has failed to achieve in the 157 years since Confederation is unlikely to be accomplished in the next 60 days.

The political math doesn’t help either. The Bloc Québécois holds the balance of power in the 45th Parliament, and its obstructionist stance on national pipeline development ensures the advent of more gridlock, not less. The federal government continues to uphold Bill C-69—dubbed the “no-pipelines bill”—further entrenching the status quo.

Meanwhile, Canada remains in the absurd position of relying on U.S. infrastructure to transport oil from the West to Ontario and Quebec. This undermines our economic independence, energy security and national sovereignty. No amount of “elbows up” will correct this enormous gap.

If the prime minister is serious about transforming Canada’s economic landscape and making the country strong, he must bypass the Bloc by cooperating with the Official Opposition. A grand bargain focused on utility corridors, interprovincial infrastructure and national trade efficiency would serve Alberta, Saskatchewan, and every Canadian who depends on a strong and self-reliant economy.

The stakes are high. We need a more productive country to face challenges within Canada and from abroad. Billions in lost revenue could fund new hospitals, more schools and better military readiness.

Instead, along with the limited exports of oil and gas, we’re exporting great opportunities to middlemen—and greater economic strength—south of the border.

The path forward is clear. A strong, self-reliant Canada needs infrastructure. It needs corridors. It needs leadership.

Marco Navarro-Genie is the vice president of research at the Frontier Centre for Public Policy. He is coauthor, with Barry Cooper, of Canada’s COVID: The Story of a Pandemic Moral Panic (2023).

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