Trade Energy East for hard cap in Alberta? (G&M op-ed)


Tom Rand's latest op-ed in the Globe and Mail: Premiers musn't let spilled oil become a red herring -  in which he argues Premiers Kathleen Wynne and Rachel Notley have an historic opportunity: trade Ontario's approval of TransCanada's Energy East pipeline for hard emission cap (and coal phaseout) in Alberta. Like all good compromises, everyone loses something.  

(text is below for those outside paywall)

 

This week’s Nexen Energy pipeline leak may throw a wrench into provincial leaders’ ability to reach consensus and wrest control of climate policy from Ottawa.

The premiers have been gaining momentum with their pragmatic “subnational” approach to creating a new, low-carbon economy. At their summit in St. John’s, the provincial leaders addressed fast-tracking decisions on the pipelines needed to expand high-carbon oil production in Saskatchewan and Alberta – an agenda they also hope to wrest away from Ottawa.

Pipelines are where climate promises meet pragmatic action and national targets bump against provincial ambitions. Leaks and spills make it more difficult to find compromise. This latest one has naturally outraged many Canadians, who are concerned about the environmental damage. My concern is that it will prove to be a red herring that distracts the country from a bigger opportunity on climate change: a coherent national climate strategy built with regional consensus.

It seems impossible to square such disparate provincial climate goals with a coherent national strategy. Alberta’s emissions targets have been, and remain, Alberta’s own business. If they grow as planned, Canada has no chance of meeting even the most modest of emission-reduction targets. That’s the hard truth both Ottawa and the premiers have been dancing around for years.

The status quo in Alberta has been to avoid any talk of absolute cuts in emissions, focusing instead on fuzzy intensity targets. All that changed in Alberta’s recent election. Oil executives might not be on board, but voters clearly want a new conversation. And that’s where Ontario Premier Kathleen Wynne and newly elected Alberta Premier Rachel Notley have the opportunity of a lifetime – if the recent pipeline leak doesn’t spill into provincial goodwill.

For Ms. Notley, the spill underscores her decision not to support the more contentious pipelines, Northern Gateway and Keystone XL. But on Friday, she argued (correctly) that pipelines remain the safest way to transport Alberta’s bitumen, and is a proponent of TransCanada’s Energy East pipeline, capable of carrying about a million barrels a day from Alberta and Saskatchewan, through Ontario and Quebec, to refineries in Eastern Canada.

For Ms. Wynne, the spill is doubly challenging. Even prior to Nexen’s fumble, any show of support for Energy East would strain her hard-earned credibility on the climate file. She’s already stated that greenhouse-gas emissions will be part of Ontario’s approval criteria. Now she’s got pictures of oil spills to deal with.

According to Pembina, Energy East will enable upstream emissions – which come from producing the oil in the pipeline, not burning it – of more than 30 million tonnes of CO2 per year. That’s equivalent to doubling the number of cars on Ontario’s roads, or reopening Ontario’s coal plants. Worse, the proposed cap-and-trade legislation asks Ontario industries and citizens to bear the burden of significant emissions reduction – targeting an ambitious 80-per-cent reduction by 2050. Ontarians will not want an energy project in their backyard that cancels that effort.

Ms. Wynne could simply refuse Energy East. Fast-tracking a decision doesn’t mean automatic approval, and an early and clear signal is better than the fog of uncertainty that exists now. But that puts pressure to put more bitumen on rail, a far more dangerous option, or to open a pipeline to the fast-melting North.

There is another choice.

If Ms. Wynne demands from Alberta, in return for Energy East approval, a hard and legally binding limit on tar-sands production levels and a coal phaseout to match Ontario, she will have accomplished something no other politician – federal or provincial – has been able to do. She will also provide Ms. Notley with political cover to push through the most aggressive climate strategy ever proposed in Alberta. The limit on production can be set to today’s level, plus Energy East capacity, less today’s rail transport. The net result increases production by 750,000 barrels a day – about a third over today’s levels, but much less than what Alberta wants.

A good compromise hurts everyone. Climate hawks like me hate to see any increase in tar-sands production. But there are multiple wins: Producers get cheap access to markets; Eastern Canada gets new refining jobs; no more bitumen goes by rail; Alberta’s entrepreneurs can apply their entrepreneurial talent and capital to clean-energy technology; Canadians get a coherent climate strategy.

And Ms. Wynne and Ms. Notley keep the lead from Prime Minister Stephen Harper – on climate, on pipelines, on energy and on the emerging global clean economy. That is, if we don’t get distracted by spilled oil.