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Pipelines or Paris: Can Canada have its cake and eat it too?

As Canada approves a massive LNG project and two
controversial pipeline projects, Tzeporah Berman asks whether its national
energy policy and its Paris promises add up. The answer, she says, lies in
understanding what Canada actually committed to.

By: /
6 December, 2016
Demonstrators protest against the Northern Gateway pipeline project at English Bay in Vancouver, British Columbia, May 10, 2014. REUTERS/Ben Nelms
Tzeporah Berman
By: Tzeporah Berman

Deputy director, Stand.Earth

For most of the last decade, Canada was widely seen as opposing progress on an international climate agreement, culminating in former Prime Minister Stephen Harper’s decision in 2011 to become the only country to pull out of the Kyoto Protocol.

Then, our new Prime Minister Justin Trudeau led a large Canadian delegation to Paris for COP21 in November 2015 and reversed Canada’s position, boldly declaring that “Canada is back” and leading the charge to support limiting warming to well below 2 degrees Celsius, with 1.5 degrees Celsius as a level of global ambition.

But recently, many are questioning whether Canada has truly changed course when it comes to the fight against climate change.

In September, Trudeau conditionally approved Petronas’ Pacific NorthWest LNG project which, if built, would become the largest point source of greenhouse gas emissions in the country.

Then, last week, Trudeau made major announcements on several pipeline projects — the government approved both Kinder Morgan’s Trans Mountain Expansion Project and Enbridge’s Line 3, while rejecting the Northern Gateway project and imposing a moratorium on crude oil shipping on B.C.’s North Coast.

We’ve always been clear in our position that strong resource development goes hand in hand with strong environmental protection,” Trudeau said.

The pipelines were given the green light just two weeks after a Canadian delegation led by Environment Minister Catherine McKenna went to Morocco for the final days of COP22, where the government once again expressed Canada’s strong support to developing countries as they work to reduce emissions that cause climate change,” this time with a $2.5 million investment in clean tech.

But is it inconsistent of Trudeau to both approve pipelines at home and attempt to meet our international climate policy commitments, as laid out in the Paris agreement, which came into effect November 4?

Critically, the answer depends on what you understand those commitments to be.

For example: In Paris, did Canada commit to the Nationally Determined Contribution (NDC) pledge that the Harper government had previously filed (to reduce Canada’s greenhouse gas emissions by 30 percent below 2005 levels by 2030)?

Yes, we did. 

Trudeau, who knows that the world’s collective NDC pledges fail to meet the 1.5-2 degree goal of the Paris Agreement, has wisely said that Canada’s pledge was a ‘floor, not a ceiling’ for Canada’s ambition.

Another example: In Paris, did Canada commit to “[holding] the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels,” as defined in Article 2 of the agreement?

Yes, we did.

Numerous studies (here, here, here and here) have argued that building additional pipeline capacity and oilsands expansion is inconsistent with either a 1.5- or 2-degree Celsius target. The Paris Agreement historically included these targets at the insistence of 43 of the most vulnerable nations to climate change.

However, some continue to only recognize the Paris Agreement by our NDC commitment. Even under this Harper-established target, significant questions emerge: Can we meet our NDC pledge if emissions from the oilsands grow to 100 metric tonnes, which is the cap on emissions that the Alberta government set in its latest climate plan? If we can, is a new pipeline needed for this level of production from Alberta?

All of these questions are under debate and many are waiting to see how Trudeau squares the circle of development versus emissions reductions in the much anticipated new national climate plan, which is set to be discussed in Ottawa this week.

Trudeau definitely made his job much harder when he approved Petronas in late September. The announcements last week make the task even more difficult. 

Long-term planning, not short-term appeasement

Even if one believes that both new pipelines approved last week could fit under the Alberta emissions cap, industry projections show that it is unlikely that both would be needed before late in the next decade. The question becomes then: if we ‘need’ the Trans Mountain Kinder Morgan pipeline by about 2025 to accommodate oilsands production consistent with the emissions limit, should we still build it given the need for rapidly declining emissions from the oilsands after 2030 to meet our goal of decarbonization in this century? What about Trudeau’s commitment to evidence-based decision-making, reconciliation with Canada’s Indigenous peoples and community engagement? What about the flawed consultation process that many say violated their constitutional rights, the environmental risks associated with tankers, and the social conflict that will accompany the construction of these projects?

I support Alberta’s Climate Leadership Plan. I think it is a strong climate policy and quite courageous of Premier Rachel Notley to change Alberta’s emissions trajectory after decades of Alberta ignoring climate change. Building a low-carbon economy in a region dependent on oil exports is no easy task. The Alberta climate plan is an important first step. 

But now we must ask: what will the next step be, and where are we going? In 2009, Canada joined other G8 nations in announcing a science-based, long-term target of 80 percent reduction of greenhouse gases by 2050. At the most recent UN Climate meeting in Marrakech, Canada reaffirmed those commitments.

Emissions reductions have to come from somewhere.

Industry has stated that it ‘needs’ the Trans Mountain Kinder Morgan pipeline by about 2025. Putting aside the debate over that, we need to look at the long-term goal here. To meet the 80 percent target, total Canadian emissions would need to be less than 150 megatonnes (mt) in 2050. If the cap on oilsands does not ramp down over time, then this one industry would be responsible for more than two-thirds of all of Canada’s emissions in 2050. That’s basic math, and is not a viable option for a functioning national economy. Currently, the oilsands are responsible for roughly 10 percent of our nation’s emissions.

Emissions reductions have to come from somewhere. Every time Trudeau approves another fossil fuel project or piece of fossil fuel infrastructure it means that more emissions reductions have to come from other parts of the economy. If the oil and gas sector is allowed to expand, far greater reductions are going to have to come from other provinces and sectors just to meet our 2030 targets, let alone plan for 2050.

It’s worth noting here that many in the Global South say a full phase-out of fossil fuels and emissions is necessary by 2050 for wealthy countries in order to ensure global equity. Those voices will only grow stronger as the waves grow higher.

If Canada intends to meet its goals — and its moral obligations — the Alberta emissions cap will ultimately have to evolve, and be brought down over time, in the same way we are phasing out coal. To fit with long-term commitments, the cap will have to decline swiftly between 2030 and 2050.

Accounting for a changing market, climate and political landscape

Is Trudeau honestly trying to balance pipelines and the Paris Agreement? Perhaps, but that balancing act cannot possibly hold for very long. The writing on the wall is quite clear at this point: fossil fuel expansion and protecting our climate are clearly in direct conflict over the long term.

This is hard for some to see. Somewhere along the way, over the last eight years of polarized conflict and exhaustive advertising by the Harper government and oil industry, even some progressives seem to have a deeply ingrained belief that approving a pipeline means political and economic success in Canada.

With Donald Trump’s election last month, there will likely be even more pressure to do so — and some say Keystone and Energy East may even be back on the table. After last week’s pipeline decisions, there is simply no way Keystone and Energy East are necessary to secure full market value for oilsands production within the Alberta emissions cap, let alone the national climate plan.

The other consideration is that markets are changing quickly, as is the climate. With the lifting of the U.S. crude export ban, the price differential that industry has pointed to as being one of the primary reasons that a new pipeline would mean a higher price for Canadian oil is greatly reduced. Despite this, the argument is made that new pipelines still mean an economic advantage because we need to have access to more than one customer. However, we have a pipeline to tidewater in the existing Kinder Morgan line. We must ask why, if Asian markets are so important, companies are not selling the oil from that pipeline to Asia? Canada’s crude is heading to refineries in California and other parts of the U.S. because there are refineries there with extra capacity for heavy oil. Not true for Asia. There is no excess refining capacity for heavy crude there.

The big questions for Canada are: How much oil can we produce and still meet our climate commitments? How much infrastructure will we need and for how long?

Oil pipelines are not built for five or 10 years. They cost billions and are built to operate for decades. What will the markets look like in 2030, 2040? The only way to answer that question is to do a global market analysis — a climate test — to determine whether the market will support the production that that infrastructure would require to be viable. 

Our own National Energy Board does that analysis as part of the national interest determination; however, it looks at a scenario designed for business as usual (BAU) market conditions. This BAU scenario assumes a demand for fossil fuels that vastly exceeds the Paris goal and is instead consistent with a 4- or even 6-degree Celsius warming. 

The 2-degree target, which the Paris Agreement aims to come in “well below,” is already dangerous to our climate. Professor Kevin Anderson, director of the Tyndall Centre for Climate Change in Britain, has said that “a 4-degrees C future is incompatible with an organized global community, is likely to be beyond ‘adaptation’, is devastating to the majority of ecosystems, and has a high probability of not being stable.”

A 6-degree warming — according to reports from the United Nations that our own country has peer reviewed and signed off on — is a terrifying scenario. In many analyses, a 6-degree world is “uninhabitable.” In this world, pipelines would be the least of our worries.  

Assuming failure or hoping for innovation?

Despite committing to update our assessment process to address climate change, the Trudeau government has yet to require a global market economic analysis consistent with a 2-degree or 1.5-degree analysis. To put it simply, we are building infrastructure assuming the failure of our own policy commitments and of the world in addressing climate change.

Clearly, our infrastructure debates are divorced from our climate policy, and until we reconcile that we will keep building fossil fuel infrastructure that could lock us into production levels post-2030 that are inconsistent with the necessity and our international commitment to decarbonize.

Not so fast, the oil industry will argue — we can increase production and meet Paris commitments as long as we reduce emissions. Right?

Not quite. This argument basically relies on the idea that the industry can ‘decarbonize’ oil. Yes, there are some ground-breaking pilot projects in the oilsands that have had remarkable success in reducing emissions per barrel. The industry as a whole, however, has increased per barrel emissions by 25 percent over the last decade. We frequently hear the Canadian Association of Petroleum Producers arguing that emissions intensity has been reduced by over 20 percent. This is only true if you look back 25 years. Big, one-time gains were made when the industry moved to cogeneration but since that time emissions have gone up, not down.

We are building infrastructure assuming the failure of our own policy commitments.

Perhaps the industry will have success in reducing emissions per barrel now that Alberta Premier Rachel Notley has given it the added incentive of a carbon tax and an emissions limit. That kind of policy certainty and added price will force innovation and new technology adoption. But how much? And if we increase production how do we meet our commitment to 2 or 1.5 degrees? Recent reports have shown that if you add up oil, coal and gas reserves currently under production and in development, we will exceed 2 degrees. In Marrakech a few weeks ago, more than 400 civil society organizations from 60 countries declared that we cannot allow any further expansion of fossil fuel production if we want to ensure we maintain a safe and stable climate.

In October, Trudeau announced a new national carbon-pricing framework. This could be an important step towards meeting our climate commitments and it has been lauded as progress at home and abroad. On its own, however, it is not enough. Good words last month in Marrakech are not enough.

It remains to be seen whether this government is setting the stage for a serious climate policy in line with the level of ambition that we supported last year in Paris or whether we continue to think we can have our cake and eat it too.

Will our new national carbon price and the upcoming national climate plan be enough to deflect criticism from our failure to set and meet ambitious targets and the approval of new fossil fuel infrastructure?

The growing protests, the coming lawsuits and the thousands marching in the streets — as witnessed most notably in B.C. — show that civil society has made the connection and is increasingly calling for fossil fuel project decisions that align with our climate ambition. And, as the reaction to the pipeline announcements made last week shows, it’s a call civil society is not likely to back down on.

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