Oil and gas industry’s fancy foot-dragging wins the day, again

CHELSEA, QUE.—It has been a splendid couple of weeks for the oil and gas industry. Over the decades, it has gone from being the scourge of international climate conferences to running the show in Dubai at this month’s COP28. The conference president this year, Sultan Al Jaber, is also CEO of the Abu Dhabi National Oil Company, and has been credibly accused of using his contacts at the global gathering to promote LNG projects. Also, a record 2,456 oil company representatives from around the world are accredited delegates. Al Jaber insists he accepts an eventual phase-out of fossil fuels, but—as always with these events—solemn commitments are larded with convenient bolt-holes, vague language, extended deadlines, and a lack of serious enforcement measures. So whether delegates at COP28 (which ends on Dec. 12) ultimately endorse a phase-out, a phase-down, or an end to “unabated” oil and gas production—that is, production facilities that don’t employ carbon capture utilization and storage (CCUS) to trap and defuse emissions—hardly matters. There will always be another conference, new targets, new strategies, no immediate threat to fossil fuel production, and no end to the damaging emissions destroying the planet. More than a decade ago, Big Oil began casting itself as a partner in addressing climate change rather than an obstacle. It did this by promoting expensive, small-scale remedies like CCUS, and insisting that governments contribute significantly to larger, more dubious projects. It wasn’t hard in Canada. Chrystia Freeland’s latest federal economic update, for instance, reaffirmed billion-dollar federal loan guarantees for a massive CCUS pipeline in northern Alberta intended to collect and bury emissions from some 20 sites—although construction isn’t expected to start for some years, if ever. CCUS has not yet been proven to work on a large scale, and, where it is working, it is often used to extract *more* oil from nearly depleted wells. The International Energy Agency recently warned that carbon capture will not be enough to mitigate emissions-causing climate change, but it remains a shiny, billion-dollar decoy that enables the industry to continue—and even expand—fossil fuel production. The fossil fuel industry has also flooded Canada—and the world—with advertising in print and television featuring green landscapes, ruddy-faced welders, Indigenous partners, smart women engineers—all puzzling over how to limit emissions while a dulcet-voiced narrator croons about the economic and environmental potential of “clean energy”. That’s another thing it did: changed the words “oil and gas” to the more neutral “energy.” Years ago it erased “tar sands” from the vocabulary and replaced it with the less graphic “oil sands.” As for “natural gas,” that is an early marketing coup. “Natural” gas is composed mostly of methane, a powerful greenhouse gas that is a byproduct of oil production. Environmentalists have properly relabelled it “fossil gas,” but you don’t find that daring phrase on the lips of many Canadian politicians. This green-washing has been noted and widely deplored in environmental circles, including at the United Nations, but in the meantime it has bought the industry time. That, along with a veritable army of well-paid, even-toned, industry lobbyists who insist that the health of the planet is never far from their thoughts—as long as it doesn’t interfere with spiralling corporate profits, expanded production, and their own handsome paycheques. In Canada, of course, the capture of our political class is complete. Alberta Premier Danielle Smith turns every timid attempt by the federal government to mitigate an obvious crisis into a personal insult and assault on her province’s “sovereignty” as she did again last week. She lives in an alternate universe in which she is an “equal” partner to the federal government, beholden, apparently, to no one except a sub-set of Alberta voters. And the oil industry. The Trudeau government has abased itself, trying to woo her and other fossil fuel industry spear-carriers: buying a $30-billion money-losing pipeline, sending millions of dollar to the province to clean up abandoned wells and to cap methane emissions, insisting that somehow, magically, the oil industry can continue to expand while lowering emissions. That fruitless campaign continues with two key announcements last week. After decades of consultations and years of delay, the Liberal government finally released its long-promised “cap” on emissions from oil and gas production—the leading single source of greenhouse gas emissions, nationally. Only it isn’t a hard cap, but rather a cap-and-trade system that is less ambitious than originally proposed—aimed at emissions reductions of 35-38 per cent below 2019 levels, instead of the original 42 per cent—and it relies on an absurdly ambitious role for CCUS, on gradually tightening targets over time, and on contributions to a sort of technological swear jar, the so-called Decarbonization Fund, for polluters who keep on polluting. The policy is incredibly complicated and can mean whatever people want it to mean. Will it significantly reduce emissions? Doubtful. The global market will do that eventually and Canada will be playing catch-up. Above all—as federal ministers Jonathan Wilkinson and Steven Guilbeault were at pains to explain—the new measure is aimed at reducing pollution, not production. This neatly avoids constitutional (if not political) conflict since the feds are responsible for containing greenhouse gas emissions while provinces oversee natural resources—but a world of expanded fossil fuel production is not a climate-friendly world. And it did not mollify Premier Smith, who denounced the federal moves as a “de facto” production cut, an attack on Alberta jobs and prosperity, and blatant unilateralism. This passionate outburst, including her recitation of a list of climate measures mostly taken by the previous provincial NDP government, is undermined by Alberta’s continually increasing emissions—higher than any other province or even G7 member. Earlier last week, Guilbeault also pledged to reduce methane emissions, largely a byproduct of oil and gas production, by 75 per cent by 2030. If this sounds familiar, it is because in 2016, newly-elected Prime Minister Justin Trudeau agreed to urgent action on methane with then-U.S. President Barack Obama. Methane, a more powerful greenhouse gas than carbon, is relatively easy to capture but, even though it is often described as “low-hanging fruit” in the battle to contain emissions, governments have been slow to harvest, and oil companies unenthusiastic about plugging leaks. Some progress has been made thanks to “incentives,” but haltingly. Guilbeault’s new policy isn’t likely to change that—at least not quickly enough. First, inspectors have to find the emissions which are massively under-counted. Then we wait until mid-2024 for draft regulations, and another year at least for publication of the final rules to kick in in 2030. The “cap” fossil fuel emissions has a similarly leisurely timeline, with yet more consultation and the final regulations not due until 2025. But Wilkinson insists his flexible—even forgiving—regime will work, and notes that Pathways Alliance, a lobby group for Canada’s largest fossil fuel producers, “has been part of this”—i.e. part of developing the regulations for their own industry. Someone should tell Premier Smith. Meanwhile, the five largest oil companies operating here amassed $38-billion in profits in 2022. And Canada is expected to hit an all-time high in oil production in 2024 as the Trans Mountain pipeline starts pumping more crude from Alberta. This train is definitely going in the wrong direction, despite all the confounding programs, warring rhetoric, and fanciful claims. You only need to open your windows during wildfire season to realize that. But, perhaps the greatest victory for oil and gas, is the knowledge that Pierre Poilievre could be prime minister by 2025, rendering all the Trudeau government’s blandishments futile, all the proposed new regulations moot, and—for the rest of us—worsening climate change a certainty. While the Conservative leader is busy trying to “ruin” Trudeau’s end-of-year holiday with procedural hi-jinks aimed at fighting the carbon tax some more, fossil fuel executives and their well-compensated lobbyists can take comfort in a job well-done. They’ve earned their Christmas bonuses this year. Susan Riley is a veteran political columnist who writes regularly for The Hill Times. The Hill Times