Energy sector looking for aid and regulation delays as throne speech looms

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This article was published 11/09/2020 (2183 days ago), so information in it may no longer be current.

OTTAWA – Canada’s fossil-fuel sector is looking to this month’s throne speech for signs the federal government is not throwing in the towel on oil and gas.

Meanwhile Canadian climate strikers are threatening mass protests if the same speech doesn’t show a plan to eliminate all greenhouse-gas emissions produced by human activities in Canada in less than a decade.

The two visions for the throne speech, expected Sept. 23, are at odds and both are ratcheting up the pressure on the Liberal government ahead of a cabinet retreat where the Liberals are expected to make the final policy decisions for the throne speech and the plans for economic recovery from the pandemic.

Tim McMillan, president of the Canadian Association of Petroleum Producers, is hoping the speech makes “a clear statement” that the oil patch will be part of the recovery, with promises of tax credits and a rethink of a new clean-fuel standard, scheduled to take effect in 2022.

The fuel standard requires companies to reduce the amount of greenhouse gases produced when liquid and gaseous fuels are burned by cutting emissions throughout the supply chain, from extraction to consumption. The regulations start with 2.6 per cent cuts in 2022, rising to 13 per cent by 2030.

McMillan said the industry wants to be part of the “ambitious green agenda” Prime Minister Justin Trudeau has promised but it needs help. And he says the fuel standard will be too hard for many companies to meet.

“In its current form, (it) will have the effect of shipping jobs and investment offshore and we’ll be importing a lot of the products that we probably do a better job of producing here in Canada,” he said.

The pandemic saw demand for fossil fuels plummet, which also sank prices, causing Canadian companies to cancel more than $8.6 billion in capital spending and lay off 19,000 people. Another 15,000 jobs are at risk by the end of 2021, McMillan said. He said clear signals on the fuel standard and tax credits could help the industry recover.

Bora Plumptre, a senior analyst at the Pembina Institute, which promotes a transition to clean energy, said many other countries are pursuing similar policies, including in Europe and China, as well as some U.S. states. He said scaling back the standard would also make it impossible to hit our Paris agreement targets to slash greenhouse-gas emissions and will also drive investments away from the renewable fuels industry in Canada.

Renewable fuels such as ethanol or biodiesel are one of the ways to meet the new standard — blending traditional diesel with biodiesel reduces overall emissions, for example.

Scott Lewis, an executive vice-president at the biomass diesel company World Energy, said Canada will lose investors and opportunities in biofuels if the government does not send a clear direction for what will be required here.

“We need a clear policy,” he said.

Lewis added that many investors are demanding fossil-fuel companies show climate plans before they give them any money, and efforts to meet the clean-fuel standard would be one way to convince investors to sign on.

Natural Resources Minister Seamus O’Regan, who is under a lot of pressure to deliver aid for the floundering oil industry in his home province of Newfoundland and Labrador, hinted earlier this week that the government is looking at making big investments to support the adoption of cleaner technology in the energy industry. That could include technologies to meet the clean-fuel standard.

His spokesman said the industry will have a big role to play in the post-pandemic world.

For climate activists, however, the oil and gas industry should play no part of it. Climate Strike Canada Friday issued updated demands of Ottawa on global warming, including eliminating all emissions from human activities by 2030.

Canada’s current promise is to cut emissions by about one-third by 2030, and to get to “net zero” by 2050. That would mean any emissions still produced are captured so they don’t end up trapping heat in the atmosphere.

Lilah Williamson, a B.C.-based member of a group called Sustainabiliteens and part of Climate Strike Canada, said Friday that the throne speech is Trudeau’s “last chance to be a leader” on climate change. A year ago, Trudeau joined hundreds of thousands of Canadians during a national climate strike march in the middle of the federal election campaign.

A similar strike is planned for Sept. 25, two days after the throne speech.

“It’s up to you whether we will be protesting or celebrating,” Williamson said of Trudeau.

This report by The Canadian Press was first published Sept. 11, 2020.