Castles in the air: Canada’s unexploitable hydrocarbon ‘resources’

Seventy-five per cent of Canada’s existing oil reserves, and 99 per cent of the known bitumen resource (Remaining Ultimately Recoverable Resources) will remain in the ground by 2050, if climate change is to be limited to the internationally agreed target of 2.0 degrees of warming by the end of this century. These are the figures cited in a new study on “unburnable fossil fuel reserves” recently published in Nature. Of course, other countries would also have to forego exploitation of fossil resources: for example, 92 per cent of U.S. coal reserves, and 77 per cent of those held by China and India would remain unused. But Canada was identified as having the lowest potential utilization of established oil reserves compatible with the global climate abatement target. Critical to this study was a global ‘carbon budget,’ which scientists are now using to define how much carbon dioxide can be released over time to have a specific probability of limiting warming to a particular range. Given that budget, fossil fuel production was allocated internationally on the basis of supply costs, which then allowed the projection of unused regional reserves. It is possible to argue with much about this study. Disputes over production costs and reserve figures are common. More seriously, some analysts now doubt the two degree target is attainable, while others think it is not ambitious enough. And the work is predicated on the assumption that the international community actually takes action to avoid dangerous climate change. But it does highlight two critical points that are not widely appreciated. The first is that addressing human created climate change ultimately means reducing global greenhouse gas emissions to few percent of current levels. We are not talking about a 10 per cent reduction here or a 30 per cent cut there. To forestall open-ended warming, sooner or later humans have to stop net greenhouse gas (GHG) emissions. Avoiding more serious climate risks requires a global effort, which for a rich country like Canada would imply GHG reductions of 80 per cent, and a virtually emissions-free energy system, by mid-century. The second point is that the world is awash with fossil fuels. The problem is that burning a substantial proportion of those resources could have catastrophic consequences for humanity and global ecosystems. So most of these potential supplies are unusable. And since Canada is a high cost producer (far from markets and with a bitumen resource that demands energy to extract and upgrade), a lot of those unusable hydrocarbons are here. This does not herald the imminent demise of the fossil energy sector in Canada. Even ambitious GHG emissions reduction scenarios such as those in the UN sponsored Deep Decarbonization Pathways Project foresee oil and gas extraction in Canada decades ahead. But it does mean headlong expansion of bitumen extraction is incompatible with serious climate goals. And it also suggests a national economic strategy focused on Canada’s role as an oil and gas exporter is high risk, and may ultimately amount to building castles in the air. The recent oil price collapse has shown just how vulnerable such a strategy is to changing international circumstance (even more so when, like Alberta, current health and education expenditures are funded from volatile resource rents). Such an overdependence on staples exports is not new to the Canadian experience. Since coming to power the Harper government has acted as if the climate change file would go away. They pulled Canada out of the Kyoto Protocol, opposed carbon pricing, and have failed to introduce GHG regulations for the oil and gas sector. This is not good news for climate policy. But it has not even helped the oil and gas sector. Canada is now known for its ‘dirty oil’, faces loss of market access because of the high GHG production intensities of our oil, and is targeted by pipeline protesters frustrated with government climate inaction on both sides of the U.S./Canada border. But the climate file is not going away. The scientific consensus continues to strengthen and big emitters like the United States and China are beginning to engage. Political movements such as fossil-energy divestment campaigns for universities, cities and pension funds will get more vocal. And as the impacts of climate change become clearer, international resolve to act will grow. The good news is that the technologies and practices needed for decarbonization are within reach. Regulation, carbon pricing and support for R&D can push low carbon innovation such as renewable energy, carbon capture and storage, zero-emission vehicles and net-zero homes. By framing this as a long-term transition to a low carbon society governments can open up new opportunities, improve the livability of our cities, and build the economy of the future. These changes will take decades, but there is no point being coy about where we are going. James Meadowcroft is a professor, Canadian research chair in governance for sustainable development at Carleton University. news@hilltimes.com The Hill Times

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