Energy & the Environment

Jared Pilon

Published

4 years ago

12 minute read

Oil and gas.

The three letter curse words.

Many are calling for the end of oil and gas while promoting the slogan “Build Back Better”.

The slogan which originated from the 2015 Sendai Framework for Disaster Risk Reduction in response to Great East Japan Earthquake and Tsunami, has now morphed into the slogan for all things green and socially just.

The Liberal Party of Canada’s website outlines their plan for “Protecting our Environment and Moving Our Economy Forward” as follows:

Fighting and Preparing for Climate Change
Making Communities Cleaner, More Efficient, and More Affordable
Protecting Canada’s Natural Legacy

The document lays out a commitment to achieve net-zero emissions by 2050, plant two billion trees in ten years, provide interest-free loans for retrofits, build vehicle charging stations, set up a camping travel bursary and ban single-use plastics.

So what is the problem with the Liberals environmental plan? Simple. It lacks depth, neglects financial implications and worst of all, its not rooted in reality.

Net-Zero Emissions by 2050

Making a commitment to hit this target through “legally binding” targets ignores the reality that we live in.

The Parliamentary Budget Office has indicated that emissions-reductions cannot be met unless the carbon tax is drastically increased.

While it may be possible to tax the country into a state of zero emissions, this would significantly cripple the economy, destroy jobs and ruin lives. This is not acceptable.

What should the government do?

Up to the mid-late 1800s, wood was the primary source of energy for developed nations.

What changed from that point to now? Innovation.

Government needs to remove red tape, repeal poor policy, end harmful taxation and allow the free market to pursue new technologies.

How can we be sure that this will work?

The free market is driven to create returns for shareholders. If there is an opportunity to create profits through new technology, free markets will find a way to capitalize.

In order to truly implement policies that improve our environment, we need to look beyond our borders and bring leading Canadian technologies to foreign countries.

Canada is a significant coal exporter. Coal, when burned, is a much higher polluter than other non-renewable resources such as natural gas and hydrogen. The government should work with foreign countries to promote the use of natural gas as a substitute.

Retrofit Buildings

Plans to provide free energy audits, interest-free retrofit loans and grants for zero-emissions homes are the main talking points of the Liberal retrofit plan.

First off, nothing supplied by the government is free. All government expenses are bankrolled by taxpayers.

In the midst of reduced or eliminated incomes due to the pandemic, the likelihood of home-owners or landlords being willing to take on debt to retrofit homes or office buildings is going to be limited for the foreseeable future.

Similarly, the costs associated with building a zero-emission home will not be offset with a $5,000 grant as proposed in the Liberal plan.

What should the government do?

Canada is already home to stringent building regulations. Regulations that carry significant costs.

In order to encourage further “green” building, the market needs access to more affordable products.

The government could accomplish this through the reduction of red tape, and the promotion of trade deals that allow for foreign firms to bring their goods and technology to Canada.

Competition and innovation ultimately drive down consumer costs and will always be more effective and efficient than government subsidies.

Charging Stations

Recently, the federal government announced that it will “invest” $295 million to help Ford Canada upgrade its Oakville assembly plant to begin making electric vehicles.

With the increased manufacturing of electric cars, comes a requirement for charging stations.

According to a 2015 US Department of Energy study, costs for single port Level 1 stations range from $300-$4,500. For DC fast charging stations, $14,000-$91,000.

Level 1 stations add 6 miles of range per hour @ 1.9kW. DC fast charging stations add 90 miles per 20 minutes @ 90kW.

Before taxpayer funds are thrown at green projects, a complete analysis of the life-cycle costs should be a requirement. This will ensure that emissions are truly lower and that taxpayers are receiving economic value for their tax dollars.

What should the government do?

Government subsidies that prop up an industry or product are inevitably harmful to consumers. These subsidies hide costs that the free market would ultimately choose not to absorb.

Instead, government should encourage vehicle manufacturers to produce more fuel efficient vehicles, regardless of the fuel system used to power the vehicle.

This could be done through the existing Scientific Research & Experimental Development Tax Incentive Program. The specific objective of the project should be to offset the costs of wages paid to research and development staff who are engaged in this direct work.

Beyond the direct goal of improving vehicle emissions, this program would create more opportunities for high-paying jobs within the tech sector which would further help to diversify the Canadian economy.

Trees and Camping Travel Bursary

The tree planting program involves two billion trees, ten years, 3,500 seasonal jobs and an overall $3 billion effort to deploy natural climate solutions.

If there is a job that meets pandemic guidelines, planting trees in the great outdoors qualifies.

The camping bursary was to provide a $2,000 grant to help families go camping in Canada’s national parks. No grants have been provided to date.

Additionally, the Learn to Camp program was to be expanded so that every Canadian child could learn how to camp by the time they reached grade eight.

What should the government do?

The WE scandal resulted in a missed opportunity to create job opportunities for post-secondary students. This can be remedied by expanding the Canada Summer Jobs program in advance of the 2021 tree planting season.

If there is little or no interest in the tree planting program for 2021, it should be abandoned entirely. Instead, government should support private sector companies who are consistently engaging in tree planting projects and other environmental reclamation projects.

Boutique tax credits and other one-off government programs typically result in creating winners and losers. As such, the camping bursary program should be cancelled.

Instead, and in conjunction with a full tax code review, the government could find efficiencies within the tax system that would translate into real results for Canadians.

Single-Use Plastics Ban

A recent announcement to ban single-use plastics, regulations to be finalized in late 2021, seeks to fulfill a long running Liberal election promise.

The ban will remove plastic grocery bags, straws, stir sticks, six pack rings, cutlery and takeout containers.

At a time where the hospitality industry is reeling from the impacts of the pandemic, this will be another difficult adjustment for this industry.

Smaller Alberta plastic manufactures have expressed concern with the new policy. Although single-use plastics account for a small portion of the plastics market, the costs associated with re-tooling a manufacturing facility can be quite high.

What should the government do?

Instead of virtue-signalling, the government should focus on addressing the issue of plastic recycling. The slogan of reduce, reuse and recycle can be traced back to the 1970s. Why hasn’t it caught on as hoped? Simply put, there is no money in plastic recycling.

Government should focus resources instead to projects that find viable solutions for plastic recycling. One such project is the development of plastic-bitumen composite roads.

Adding carbon capture technology to the plastic processing and bitumen mixing process would allow for road materials to be produced in an environmentally conscious manner.

Plastic-bitumen composite roads could result in better quality roadways as they are less water absorbent. Due to the temperature swings in Canada, this could save significant amounts of money otherwise spent on maintenance.

Final Thoughts

Canadians across the country have a strong desire to protect and preserve our environment for our children and future generations.

Environmental policies need to be more than exercises in virtue-signalling.

Government needs to understand the climate that we live in, the size of our country and the economic implications of the decisions being made.

Government subsidies are unacceptable. Subsidies result in expensive infrastructure projects and bloated consumer costs. If we need a reminder of this we only have to look at the recent failing of the Ontario green energy initiative.

Government should focus on reducing red tape, encouraging competition and providing targeted tax credits. Policy that focus on tax credits require free market enterprises to undergo the leg work to get new technology to a state where it can be capitalized on. This allows the free market to determine what is viable and how to achieve capitalization in the most efficient manner.

Lastly, we need capitalize on revenues from our oil and gas sector in order to further technological advances. Passing legislation to end emissions, create a zero-plastic waste economy or any other lofty agenda neglects the real world implications of these decisions. These policies do not take into consideration the resources required to accomplish these goals. Additionally, many families are being left behind as a result of these policy decisions.

We can protect our environment through innovation. In making policy decisions, government must not take better care of the environment than the residents who call it home.

https://www.jaredpilon.com/

Jared Pilon

I have recently made the decision to seek nomination as a candidate in the federal electoral district of Red Deer - Mountain View. As a Chartered Professional Accountant (CPA), I directly see the negative impacts of government policy on business owners and most notably, their families. This has never been more evident than in 2020. Through a common sense focus and a passion for bringing people together on common ground, I will work to help bring prosperity to the riding of Red Deer – Mountain View and Canada. I am hoping to be able to share my election campaign with your viewers/readers. Feel free to touch base with me at the email listed below or at jaredpilon.com. Thanks.

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Energy

What does a Trump presidency means for Canadian energy?

Published on November 20, 2024

Todayville

From Resource Works

Heather-Exner Pirot of the Business Council of Canada and the Macdonald-Laurier Institute spoke with Resource Works about the transition to Donald Trump’s energy policy, hopes for Keystone XL’s revival, EVs, and more.

Do you think it is accurate to say that Trump’s energy policy will be the complete opposite of Joe Biden’s? Or will it be more nuanced than that?

It’s more nuanced than that. US oil and gas production did grow under Biden, as it did under Obama. It’s actually at record levels right now. The US is producing the most oil and gas per day that any nation has ever produced in the history of the world.

That said, the federal government in the US has imposed relatively little control over production. In the absence of restrictive emissions and climate policies that we have in Canada, most of the oil production decisions have been made based on market forces. With prices where they’re at currently, there’s not a lot of shareholder appetite to grow that significantly.

The few areas you can expect change: leasing more federal lands and off shore areas for oil and gas development; rescinding the pause in LNG export permits; eliminating the new methane fee; and removing Biden’s ambitious vehicle fuel efficiency standards, which would subsequently maintain gas demand.

I would say on nuclear energy, there won’t be a reversal, as that file has earned bipartisan support. If anything, a Trump Admin would push regulators to approve SMRs models and projects faster. They want more of all kinds of energy.

Is Keystone XL a dead letter, or is there enough planning and infrastructure still in-place to restart that project?

I haven’t heard any appetite in the private sector to restart that in the short term. I know Alberta is pushing it. I do think it makes sense for North American energy security – energy dominance, as the Trump Admin calls – and I believe there is a market for more Canadian oil in the USA; it makes economic sense. But it’s still looked at as too politically risky for investors.

To have it move forward I think you would need some government support to derisk it. A TMX model, even. And clear evidence of social license and bipartisan support so it can survive the next election on both sides of the border.

Frankly, Northern Gateway is the better project for Canada to restart, under a Conservative government.

Keystone XL was cancelled by Biden prior to the invasion of Ukraine in 2022. Do you think that the reshoring/friendshoring of the energy supply is a far bigger priority now?

It absolutely is a bigger priority. But it’s also a smaller threat. You need to appreciate that North America has become much more energy independent and secure than it has ever been. Both US and Canada are producing at record levels. Combined, we now produce more than the Middle East (41 million boe/d vs 38 million boe/d). And Canada has taken a growing share of US imports (now 60%) even as their import levels have declined.

But there are two risks on the horizon: the first is that oil is a non renewable resource and the US is expected to reach a peak in shale oil production in the next few years. No one wants to go back to the days when OPEC + had dominant market power. I think there will be a lot of demand for Canadian oil to fill the gap left by any decline in US oil production. And Norway’s production is expected to peak imminently as well.

The second is the need from our allies for LNG. Europe is still dependent on Russia for natural gas, energy demand is growing in Asia, and high industrial energy costs are weighing on both. More and cheaper LNG from North America is highly important for the energy security of our allies, and thus the western alliance as it faces a challenge from Russia, China and Iran.

Canada has little choice but to follow the US lead on many issues such as EVs and tariffs on China. Regarding energy policy, does Canada’s relative strength in the oil and gas sector give it a stronger hand when it comes to having an independent energy policy?

I don’t think we want an independent energy policy. I would argue we both benefit from alignment and interdependence. And we’ve built up that interdependence on the infrastructure side over decades: pipelines, refineries, transmission, everything.

That interdependence gives us a stronger hand in other areas of the economy. Any tariffs on Canadian energy would absolutely not be in American’s interests in terms of their energy dominance agenda. Trump wants to drop energy costs, not hike them.

I think we can leverage tariff exemptions in energy to other sectors, such as manufacturing, which is more vulnerable. But you have to make the case for why that makes sense for US, not just Canada. And that’s because we need as much industrial capacity in the west as we can muster to counter China and Russia. America First is fine, but this is not the time for America Alone.

Do you see provinces like Alberta and Saskatchewan being more on-side with the US than the federal government when it comes to energy?

Of course. The North American capital that is threatening their economic interests is not Washington DC; it’s Ottawa.

I think you are seeing some recognition – much belated and fast on the heels of an emissions cap that could shut in over 2 million boe of production! – that what makes Canada important to the United States and in the world is our oil and gas and uranium and critical minerals and agricultural products.

We’ve spent almost a decade constraining those sectors. There is no doubt a Trump Admin will be complicated, but at the very least it’s clarified how important those sectors are to our soft and hard power.

It’s not too late for Canada to flex its muscles on the world stage and use its resources to advance our national interests, and our allies’ interests. In fact, it’s absolutely critical that we do so.

Energy

What Will Be the Future of the Keystone XL Pipeline Under President Trump?

Published on November 18, 2024

Todayville

From EnergyNow.ca

By Terry Winnitoy, EnergyNow

The Keystone XL Pipeline, proposed in 2008, was designed to transport Canadian crude oil from Alberta to refineries in the United States, specifically to Steele City, Nebraska, and onward to refineries in Illinois and Texas, as well as to an oil pipeline distribution center in Cushing, Oklahoma.

Spanning approximately 1,179 miles and designed to transport up to 830,000 barrels of oil per day, the pipeline promised significant economic and energy security benefits. However, it became a focal point of political and environmental controversy, leading to its eventual cancellation by Presidents Obama and Biden.

Here’s a brief look at its history, the reasons it should have been built, the political dynamics that led to its cancellation and will President-elect Trump revive it?

Why the Keystone XL Pipeline Should Have Been Built

Economic and Job Creation

The pipeline was projected to create thousands of construction jobs and several hundred permanent jobs, providing a significant boost to the economy. It was also expected to stimulate economic activity through the development of related infrastructure and services.

Energy Security

By facilitating the efficient transport of a large volume of oil from a stable and friendly neighboring country, the pipeline would have reduced American dependence on oil imports from more volatile regions, enhancing national energy security.

Environmental Safety

Pipelines are generally safer and more environmentally friendly for transporting oil compared to rail or truck, with lower risks of spills and accidents. The Keystone XL was designed with the latest technology to minimize leaks and environmental impact.

Regulatory Oversight

The project underwent extensive environmental reviews and was subject to strict regulatory standards to ensure it adhered to environmental protection and safety measures.

Political Reasons for Cancellation

Environmental Activism

The pipeline became a symbol for environmentalists who opposed further development of fossil fuel infrastructure. They argued it would contribute to climate change by enabling the extraction and consumption of oil sands, which are more carbon-intensive than other oil sources.

Obama’s Cancellation

President Obama rejected the pipeline in 2015, citing environmental concerns and its potential impact on global climate change. He argued that approving the pipeline would have undercut America’s leadership on climate change.

Trump’s Reversal and Biden’s Final Cancellation

President Trump revived the project in 2017, citing economic benefits and energy security. However, President Biden canceled it again on his first day in office in 2021, fulfilling a campaign promise to prioritize climate change issues and transition towards renewable energy.

Political Symbolism

For both Obama and Biden, the decision to cancel the Keystone XL Pipeline was also a symbolic gesture, demonstrating a commitment to environmental sustainability and a shift away from fossil fuel dependence in line with their administrations’ climate policies.

Will President-Elect Trump Reinstate It?

Currently, there is no definitive answer on whether President-elect Trump will reinstate the Keystone XL Pipeline. His previous administration showed support for the project, citing its potential economic and energy security benefits. However, reinstating the pipeline would require navigating significant political, legal, and environmental challenges that have developed over the years.

It would also depend on the current geopolitical, economic, and environmental priorities at the time of his taking office. The Keystone XL Pipeline’s history is a complex tapestry of economic aspirations, environmental concerns, and political maneuvers.

Its cancellation has been a contentious issue, reflecting the broader national and global debates over energy policy and climate change strategy. Whether it will be reinstated remains a significant question, contingent on a multitude of factors including political will, environmental policies, and market dynamics.

That all said, re-instating its approval might be the perfect “in your face” moment for Trump to Obama and Biden as he begins his second term of presidency. We’ll have to wait and see.