Features

Canada’s petroleum sector will reinvent, not fold, and the world will be better for it

The petroleum sector is, to put it mildly, used to wild swings in its circumstances. Not just swings in price, but changes in market demand, or new play types, or the advent of new technology such as horizontal multistage fracking – rolling with the punches and innovating is part of the game.

In the current environment though, it really is different this time – the industry simply can’t get product to market. Canada is nearly paralyzed in an ocean of red tape and handwringing, bizarrely worried about our global reputation to the point that self-sacrifice is part of the government’s strategy, and is in the process of passing legislation that will seize things entirely (when a project has to spend more than half a second discussing “man camps”, you know it is doomed).

The oil pipeline battle is beyond well-documented, and the cost to the country every single day is incredible. Fewer are aware of the dumpster the natural gas business is in though, for similar reasons – a lack of market access. True, part of the natural gas problem lies with the antics of the near monopoly gas transporter. TransCanada Pipelines, or, what did they change their name to… NotCanadian Pipelines? Oh yes, TC Energy (10,000 shipping crates full of “TransCanada” logo-ed golf shirts heading for Africa, as we speak). Anyway, the elephant that is trying to hide by pulling a shrub over itself, via a name change that excludes the word “Canada”,  is running the country’s natural gas pipeline system like the Soviet Union used to manage the potato harvest, with random trainloads getting through and just as many left to rot in some remote rail siding.

So while the world is asking the petroleum industry to change directions, to get more environmentally friendly, and also to, well, kill it off outright, the Canadian energy industry’s ability to reinvent itself is being hamstrung by the abolishment of its cash flow. It’s not pretty.

In ordinary circumstances – such as when product can actually reach hungry markets – reinvention is somewhat easier. Shell is doing a considerable job of it, pushing a progressive agenda along with continuing to ensure a strong production base. But they are global, and are demonstrating these new visions pretty much anywhere in the world except here.

Canada’s petroleum industry is in for more of a challenge, given that it has to fight its own government, but that doesn’t mean reinvention is not happening. Amid the gloom of the empty office towers, the old can-do attitude is reappearing here and there like a plucky flower through a crack in the concrete.

Some of the reinvention is simply overdue processes, such as the firm that is recycling plastic liners from frack water tanks (Rundle Eco Services). Their vision is, like the best of the industry, a vision based on the principle that these initiatives need to be profitable and not supported by government largesse.

Others are more complex and technically challenging, but with absolutely monster potential payoffs. Stantec, the big engineering firm that is not SNC Lavalin, worked with Alberta Innovates on a “Bitumen Beyond Combustion” project that outlined potential uses for bitumen including use in carbon fiber, asphalt, and batteries of all things. Initiatives like this are game-changers, because, if they get off the ground, are indications that we have moved beyond the “haul your commodity to market and see what it gets” mentality. Canada has an abundance of raw materials; it is imperative that we find new ways to use them.

Critics of the industry are quick to throw rocks because the industry isn’t moving fast enough or doing enough. These critics, while a diverse group, have one near universal thing in common – they’ve never built anything. Or, put another way, they’ve never been responsible for developing, funding, planning, and executing major projects, reasonably on time and budget, under a bewilderingly difficult and time consuming regulatory process, and then making a profit at them. To them I offer a sincere STFU until they have.

On top of that, the world is beginning to see just how hard it is to change energy courses. After more than $4 trillion in renewable investment, the world’s energy sources remain stubbornly above 80% reliant on fossil fuels – a number unchanged in 30 years. As such, the middle ground of Canada, the 80% that is open to rational energy discussions, will realize that Canada’s petroleum sector is a well-run industry that will and should be at the forefront of any energy transition plan.


About the Author

Terry Etam is an independent senior consultant for small and midsize oil and gas companies. His website Public Energy Number One is dedicated to energy education and he is the author of The End of Fossil Fuel Insanity.

EU nationalists refuse carbon elimination by 2050

The nationalist and Eurosceptic governments of Poland, the Czech Republic, Hungary and Estonia have blocked a European Union (EU) proposal to slash the bloc’s carbon emissions to net zero by 2050. At a council summit on June 20, leaders of the EU’s 28 member states agreed instead to start working on “a transition to a climate-neutral EU.”

Though the majority of the EU nations wanted a much more robust version of the plan, where earlier proposals envisioned a strict road map of how to reach net zero emissions and a hard 2050 deadline, such deal would have impacted the lives of more than 500 million people living in the EU. The nationalist governments are wary of such a plan’s negative impact on jobs, industries, and quality of life. These central and eastern European states are particularly dependent on nuclear power and coal for energy.

A weakened version of the plan was also too strict for the group of Eastern European countries. The veto votes from Poland, the Czech Republic, Hungary, and Estonia meant the proposed 2050 emissions target became a mere footnote. Sending a message to investors and business, 24 of the EU leaders agreed to the statement: “For a large majority of member states, climate neutrality must be achieved by 2050."

EU leaders called on the European Investment Bank (EIB) to increase climate funding and acknowledged vast differences in the continent’s energy mix. Polish Prime Minister Mateusz Morawiecki pushed back to say, “We need concrete things on the table. What additional money could be allotted to Poland so that we do not end up in an offside trap?

France and Germany, who are imposing high carbon taxes on their respective countries – resulting in weekly Yellow Vest protests for the past eight months in France – had led the push for the EU to set the ambitious new climate goal for 2050, ahead of United Nations (UN) climate talks in September, which American President Donald Trump will not be attending.

Canada’s Senate passes Bill C-69 and Bill C-48

This week, Canadian Senators passed two controversial energy bills as it prepared to adjourn for the summer and the upcoming fall election. Bill C-69, the Impact Assessment Act, sets up a new authority to assess industrial projects including pipelines, mines, and inter-provincial highways, for their effects on public health, the environment and the economy. Bill C-48, the Oil Tanker Moratorium Act, formalizes a moratorium on oil tanker traffic of a certain size in waters from the northern tip of Vancouver Island to the province’s border with Alaska.

CEO of the Canadian Energy Pipeline Association (CEPA) Chris Bloomer welcomed the earlier approval of the Trans Mountain pipeline expansion but said the industry is facing broader problems and “The potential for new major pipeline development in Canada is bleak with the Senate’s passing of Bill C-69. Canada is sending mixed messages that will send critical investment capital elsewhere.”

Both bills passed on Thursday and were given Royal Assent to become law on Friday. Bill C-69 passed by a vote of 57 to 37. Bill C-48 passed by a vote of 49 to 46, with one abstaining.

On June 12, Energy Ministers from Alberta, Saskatchewan, and Ontario said many of the amendments that were struck down would have made Bill C-69 more palatable for the resource sector. They wanted the amendments taken as a complete package. Conservative Senator Richard Neufeld called C-69 “one of the most toxic, polarizing and divisive bills” he has encountered in his ten years as a Senator. Alberta Premier Jason Kenney tweeted, "This means the No More Pipelines Law will become law. A bad day for our economy, and the Canadian federation."

Prime Minister Justin Trudeau responded by saying the legislation is necessary to get energy projects built in Canada. “The conservatives still seem to think that the way to get big projects built is to ignore Indigenous peoples and ignore environmental concerns. That didn’t work for 10 years under Stephen Harper, and it’s certainly not going to work now. That’s why we had to change the process.”

At the Bloomberg Canadian Capital Markets conference in London, co-founder of Grafton Asset Management Geeta Sankappanavar said Canada risks becoming a “banana republic” for its restrictive energy policy and failure to attract new investment into the sector. She said, “We have had basically signs on our energy industry that Canada is closed for business. Today we are in danger of becoming unfortunately a little bit like a banana republic on the energy side.

Ms. Sankappanavar’s firm has raised and deployed CAD $1 billion in the Alberta oil patch and blames carbon taxes, falling oil prices, and increased regulatory scrutiny under new federal government rules for contributing to what she calls an “awful” malaise in the sector. She added, “It is a very, very dark and bleak place. We have had significant regulatory and political challenges in our industry. We are wasting our time” and at risk of becoming “violinists on the Titanic.” Additionally, Ms. Sankappanavar said, “Canada has a brand issue,” and the industry also needs to do a better job promoting the progress it’s made in reducing relative emissions and investing in renewable energy.

The 2001 "Canada Action Plan" Crystal Ball Check

TRANSCRIPT

John Robson

I’m John Robson, and welcome to the Climate Discussion Nexus Crystal Ball Check.

Narrator

The global warming issue depends heavily on computer model forecasts about climate problems that greenhouse gas emissions will supposedly cause decades from now. But it turns out that climate experts and government officials have been making these kinds of forecasts for a long time, warning about things that, by now, should already have happened, if their models are as accurate as they claim.

John

And I think it’s time we checked how good their crystal ball turned out to be. Before we put any trust in their new forecasts, we’re entitled to see how good the old ones were.

For our first trip back to the future, we want to look at this 2001 pamphlet, which the Government of Canada mailed out to people across the country to build support for their costly new climate policy plans two decades ago.

“The Earth is getting warmer … We are changing our climate” the pamphlet warned.

It swept aside any uncertainties and insisted that we are the cause, it’s going to be harmful, and we need to take action now (that is, in 2001) to stop it from happening.

Narrator

The pamphlet went on to list the following predictions:

  • Canadian cities will experience longer and more intense heat waves

  • These heat waves will make air pollution get worse

  • Sea levels on the northern coast of British Columbia will rise by up to 30 cm by 2050

  • Crop yields on the prairies will start declining due to increased droughts

  • There will be more frequent forest fires

  • And water levels in the St Lawrence Seaway will fall by up to 1.25 meters this century

John

Now those warnings sound pretty familiar. We’re hearing them today. But it’s been almost 20 years since the Canadian government declared the debate over and made those predictions in that pamphlet. Let’s see if any of them came true.

More Heat Waves:

Environment Canada’s long term temperature archive for every city in Canada can be seen online at YourEnvironment.ca. Toronto’s records go back to 1840. Summertime daily highs have barely changed over the past hundred years.

Now here are the monthly average daytime highs for June, July and August, the hot months, since 1990. There’s simply no evidence of longer or more intense heatwaves over the past few decades. Use the site to check out other large urban areas in Canada yourself – good luck finding anywhere that shows a trend of longer and more intense summertime high temperatures.

More Air Pollution:

Narrator

Environment Canada maintains air pollution records for most major Canadian cities back to the early 1970s. In 2017 the Fraser Institute took the data and produced this report. It clearly shows that, instead of going up, heat-related pollution levels have been steady or declining in major urban areas for at least the past 20 years.

So far on the government’s predictions, we’re zero for two.

Rising BC Sea Levels

John

Global tide gauge data is maintained by the Permanent Service for Mean Sea Level in Liverpool, England, and it too is all available online. According to the Government’s 2001 pamphlet, sea levels along the northern BC coast should be going up by about 6 cm per decade due to climate change. Northern BC coastal sea levels have been measured at Prince Rupert since 1925. And in fact water levels rose up to the mid-1970s, but since then they haven’t changed much at all. And a little farther north in Ketchikan Alaska, they’re actually going down.

This graph compares what the government forecast and what has actually been observed since the early 1990s. Another wrong prediction.

Falling Prairie Crop Yields

Narrator

Is prairie grain production declining due to drought, or anything else? Statistics Canada has measured annual prairie crop yields since 1908. Since the government published its prediction of falling grain yields, total wheat and canola production on the prairies has soared by over 60%, while spring wheat production per hectare is up about 66%. Another failed prediction.

More Forest Fires

John

The National Forestry Database, again operated by the Canadian government, provides estimates of the number of forest fires every year. The national record goes back to 1970. And the number of forest fires in Canada since 2001, when the pamphlet was published, has actually been going down slightly, not up, as the government’s model forecast.

Declining St. Lawrence Water Levels

Narrator

The government predicted that St Lawrence River water levels would fall so quickly they should be down by about 25 cm by now. The Water Survey of Canada is a government agency that monitors water flow and levels in all major Canadian river systems. Their data collection is easily accessible online.

Here’s the monthly average data for the St Lawrence from the monitoring station near Cornwall Ontario, going back to when the seaway opened in 1959. And here’s a chart of the data up close since 2000, comparing actual St Lawrence levels to the government’s predicted rate of decline. As you can see, the level changes a little from year to year, but it isn’t declining the way the government forecast.

John

So that’s zero out of six predictions right. That’s like striking out twice in one at-bat. Their forecasting model did far worse than random guessing would have.

It would be bad enough if they made all these mistakes while admitting that the science is uncertain and needs to be debated, and that climate is complex. But they were doing the opposite.

Already two decades ago they had shut down the idea of a debate and insisted that the science was settled. But the science that produced these forecasts was hopelessly inaccurate. The government used worthless computer projections to engage in fearmongering aimed at silencing critics and intimidating Canadians into supporting a costly policy agenda.

Narrator

So you don’t have to take at face value any of the government’s current forecasts about the supposed dangers of climate change until they can explain why so many of their past predictions were wrong.


About the Author

Dr. John Robson is Executive Director of Climate Discussion Nexus. He holds a Ph.D. in American History from the University of Texas at Austin and has worked as a historian, policy analyst, journalist and documentary filmmaker for three decades. He has been examining the climate change issue for many years, including both the science and the policy debates.

Reducing GHG emissions is abstract, reducing comfort levels is not, and don’t even think about the latter

I once volunteered to help administer a prize of some sort for an organization I can’t remember the name of (there are good reasons for the hazy memory, some sort of repression I think). The prize on offer was for an organic yard weeding – to whip someone’s yard into shape without the use of herbicides. The contest winner lived on the edge of the city on an oversized lot, and we arrived one fine evening to see an ocean of dandelions in bloom, for (what seemed like) as far as the eye could see (but was actually more tennis court-sized). The homeowner came out, and we told him why we were there, and he gave us a dubious “Really?” look, sort of sorrowful and puzzled, like one might give to a beginner-class boxer that won a title-shot fight against Mike Tyson in his prime. He said we didn’t have to do it, which was sort of like telling a grocery store clerk not to worry, that he didn’t have to solve world hunger. The volunteer crew, two or three of us, worked for an hour or so and cleared a patch that a good-sized dog could have covered. The remaining 99.9 percent of the dandelions met their fate in the usual chemical way, I presume; I did not return because I had other things to do with forties.

I was recently reminded of that warm evening and its accompanying feeling of pointlessness when reading some comments from the head of the International Energy Agency. Fatih Birol, at a conference in Vancouver, pointed out the realities of where we are at in the effort to reduce emissions by moving away from fossil fuels. Thirty years ago, 81 percent of the world’s energy mix was from fossil fuels. Last year, after over $4 trillion in renewable energy investment, fossil fuels make up…drum roll please… 81 percent of the world’s energy mix.

Peter Tertzakian penned an excellent analysis of the report, noting that “The gap between what we perceive, what we aspire to, and what is reality is already wider than the Pacific Ocean. And it’s getting wider… In fact, industrializing regions of the world are so demanding for all sources of energy that even the ‘approvals of conventional oil and gas projects fall short of what would be needed to meet continued robust demand growth,’ says the IEA.”

Further buttressing this message was the annual BP Statistical Review of World Energy, a goldmine of energy information that the world needs desperately to comprehend but never will, because only nerds are unafraid to tread here. In the introduction, BP CEO Bob Dudley commented: “the data compiled in this year’s Review suggest that in 2018, global energy demand and carbon emissions from energy use grew at their fastest rate since 2010-11, moving even further away from the accelerated transition envisaged by the Paris climate goals… The strength in energy consumption was reflected across all the fuels, many of which grew more strongly than their recent historical averages… Despite the continuing rapid growth in renewable energy last year, it provided only a third of the required increase in power generation, with coal providing a broadly similar contribution.”

And that’s where we are now. A few decades of ever-spiraling climate warnings, trillions spent, massive renewable energy development, and we are moving further away from climate targets. It should be stunningly clear that the movement to isolate/strangle/destroy the fossil fuel industry is not working; all the war is doing is reshaping it – production is moving from regions where comfortable activists can attack it to regions of the world where people welcome it. Furthermore, the world’s energy demands simply expand when our income levels expand – we fly more, travel more, buy more, etc. Almost no one will sacrifice their standard of living in any meaningful way. Yes, we’re terrified of a climate apocalypse, and we’ll get right on that right after this trip to Europe.

The conclusion of these reports is inescapable, and hopefully one day soon policy chieftains will pay attention. The current agenda of the UN, as administered by the Canadian government, is acting completely irrespectively of the continued rise of fossil fuel usage. Forceful tactics aimed at limiting the size of Canada’s (or the US’, in the latest news) petroleum sectors is simply moving global petroleum production to other parts of the world that have lesser environmental standards. These tectonic shifts are resulting in a world that is getting fossil fuels from jurisdictions that have lower environmental standards than the ones in the countries that are being strangled.

It is also irrefutable that those who are using the fear of climate change as a means to reengineer the social order are not throwing in the towel; they are simply doubling down. The Extinction Rebellion movement will surely spread, if for no other reason than the band Radiohead decided to donate all proceeds from a new release of material to the group. Sales from a band of Radiohead’s stature will surely buy a lot glue for the XR warriors to attach themselves to immovable objects. But no matter what they adhere themselves to, the other 7-billion-odd people are in unison offering a collective and unmistakable “meh” when the latest firebrand pending-doom end-of-the-world scenario hits the web.

With this inevitable meltdown of climate-thwarting expectations should come the awareness that many, many strides are being made in all sorts of industries to lower emissions. It is impressive to pick up any technical journal for almost any industry and read about the efforts being made to reduce environmental footprints. We therefore should not be completely dismissive of environmental fears; genuine concern for the environment has sparked much thought and action to do what is realistic to reduce our footprints. We are on a decent trajectory, though not the one that some of the more exuberant activists want.

At the end of the day, that is all we have – emissions levels can be reduced, but 7 billion people are making it abundantly clear that it will happen gradually, and only if we remain comfortable. Efforts to upend the existing order, to “get off fossil fuels immediately”, are fools errands that will lead only to acrimony, divisiveness, and probably bloodshed. That might sound melodramatic, but it is probably literally true; ask the Extinction Rebellion woman who glued her breasts to the street – I’m betting there was blood shed as that fiasco was disassembled. Let’s hope that the coming injuries are limited to that sort of thing.


About the Author

Terry Etam is an independent senior consultant for small and midsize oil and gas companies. His website Public Energy Number One is dedicated to energy education and he is the author of The End of Fossil Fuel Insanity.

Canadian government approves Trans Canada pipeline expansion

On Tuesday, the Canadian government approved expansion of the 66-year-old Trans Canada crude oil pipeline that it bought last year for CAD $4.5 billion from Kinder Morgan Canada. Hoping to appease energy supporters ahead of the October federal election, the Liberals angered environmental activists despite also declaring a climate emergency this week.

The Liberal government previously approved the expansion in 2016 but that decision was overturned last year after a court ruled the government had not adequately consulted indigenous groups. Though Ottawa expects legal challenges to this latest approval, construction will resume shortly. This is expected to take two and a half years and could be in service by the second half of 2022.

The project triples Trans Mountain’s capacity to carry 890,000 barrels per day from Alberta’s oil sands to British Columbia’s Pacific coast and alleviates congestion on existing pipelines and diversify exports away from the United States. Western Canada’s oil production has expanded faster than pipeline capacity, causing a glut of crude to build up.

Prime Minister Justin Trudeau has been under intense pressure from both western Canadian Premiers and energy supporters who accuse him of doing too little for the oil industry, and from environmental groups who wrongly see the oilsands as a highly polluting source of crude production.

Trans Mountain still requires various permits and route approvals in British Columbia, where that province’s far-left New Democratic Party government opposes the project. BC Premier John Horgan said his government was “disappointed” with the federal government’s decision but would not unduly withhold construction permits. However, the BC government plans to appeal a recent BC Appeal Court ruling that the provincial government cannot restrict the flow of oil on pipelines that cross provincial boundaries.

The Canadian Energy Pipeline Association said in a statement that the decision will help create billions in economic benefits across Canada as it allows Canadian oil to reach higher-paying international markets. Alberta Premier Jason Kenney, a frequent critic of PM Trudeau, said, “This is now a test for Canada to demonstrate to the rest of the world we are a safe place in which to invest. We will measure success not by today’s decision but by the beginning of actual construction and more importantly by the completion of the pipeline.

The pipeline is a vital conduit to help Canadian oil reach higher-priced international markets. According to a National Energy Board filing, eighty percent of the expanded pipeline’s total capacity has been contracted to companies including Suncor Energy, Canadian Natural Resources, and Exxon-owned Imperial Oil. Numerous indigenous groups have said they are interested in investing in it.

Trans Mountain has stockpiled about 30 percent of the pipe it needs and would resume construction where it left off a year ago, at the Westridge Marine Terminal in Burnaby, BC, and between Edmonton and Jasper, Alberta.

Governments rapidly return to coal

With global coal production up 4.3 percent and consumption up 1.4 percent, the fastest rate of increase in five years, a major report by energy giant BP said the world was returning to coal following three years of falling consumption. “This strength was concentrated in Asia, with India and China together accounting for the vast majority of the gains in both consumption and production. As a result, the peak in global coal consumption which many had thought had occurred in 2013 now looks less certain. Another couple of years of increases close to that seen last year would take global consumption (of coal) comfortably above 2013 levels,” the BP report said.

BP’s highly respected annual report, which examines trends in energy demand and use, including from renewables, said last year’s global energy demand and carbon emissions from energy use had grown at its fastest rate since 2010-11. The report notes that massive investments in renewable energy were needed but would not be enough to satisfy ­increasing demands for power, most notably in China and India. Global greenhouse gas emissions overall were up 2 percent last year as a result. Most of the increase in demand for power came from China, India, and the United States – where most notably, unusually hot and cold weather led to a spike in demand for heating and cooling.

Even if renewables are growing at truly exceptional rates, the pace of growth of power demand, particularly in developing Asia, limits the pace at which the power sector can decarbonise,” the report said, and that building more renewable sources of energy could not keep pace with rising demand.

In Australia, Queensland's environment department has signed off on a plan to manage groundwater on and around Adani’s controversial mega coal mine of Galilee Basin, which the Queensland government has issued final approval for construction to begin. "You could be thinking from today, in two years' time, people should be expecting we have exported our first piece of coal," Adani Chief Executive Lucas Dow told reporters in Brisbane.

In the face of eco-activist opposition, Queenland’s State Environment Minister Leeanne Enoch said the decision was made solely by her department and that Cabinet members had nothing to do with it; “It has been made by the regulator and is backed by expert advice," she said.

State Oppostion leader Deb Frecklington labelled the decision a win for Queenslanders who need a job, but says it's just the beginning as she wants the Galilee Basin to be opened up to more projects, though won't soften the state's environmental laws to make the approvals process easier if elected next year. "You can't just come into Queensland and start digging up coal, it is an extremely rigorous and difficult process as it should be," she said.

Regional leaders were glad a decision had been finally made and were now waiting for Adani to follow through with jobs. LNP mines spokesman Dale Last says 19,000 people have applied for the 1500 direct jobs Adani says the project will create during construction.

Alberta invests in First Nations energy projects

This fall, Alberta’s new United Conservative government will bring in legislation to create a Crown corporation, called the Indigenous Opportunities Corporation, supported by CAD $1 billion to help First Nations invest in major energy projects such as pipelines.

Indigenous Relations Minister Rick Wilson will consult First Nations groups over the summer to better inform the legislation when it comes forward and the board of the Crown corporation will have First Nations representation.

During the election campaign, Premier Jason Kenney had promised that, should he win, his government would fund the corporation with CAD $24 million over the first four years to give legal, technical, and financial advice to First Nations looking to initiate or participate in energy projects, as well as CAD $1 billion to provide financial backstops and loan guarantees.

At his announcement, Premier Kenney said the corporation addresses a historic imbalance, adding that for too long some First Nations did not have the financial means to get commercial rates of credit. "(Some) have not had the same advantages. They don't have the balance sheets quite frankly to be partners in projects like TMX (Trans Mountain pipeline expansion). The idea of the Indigenous Opportunities Corporation is to help them get that financial capacity," he said.

Grand Chief of the Treaty 6 Nations Wilton Littlechild said the discussion was about growing the economy, but not development for its own sake. "We also heard concerns, of course, about is it possible to have sustainable development and promote respect for Mother Earth at the same time. From our experience the answer is yes. It's not no to any development or yes to all development. We need to seek a balance, and that's been the approach of those successful First Nations that have been able to capitalize on that opportunity," he said.

Chief Aaron Young of the Stoney Nakoda-Tsuu T'ina Tribal Council said the talks were promising, "We are now at the table where we can come together and solve our own problems and move forward.”

Oil tanker ships attacked near Iran

On Thursday, two oil tankers near the strategic Strait of Hormuz were attacked, prompting the United States Navy to rush to the aid of the vessels in the Gulf of Oman off the coast of Iran, including one that was set ablaze.

The United States blamed Iran and denounced what it called a campaign of “escalating tensions” in a region crucial to global energy supplies. American Secretary of State Mike Pompeo said his country’s assessment of Iran’s involvement was based in part on intelligence as well as the expertise needed for the operation. It was also based on recent incidents in the region that the US also blamed on Iran, including the use of limpet mines, which are designed to be attached magnetically to a ship’s hull, to attack four oil tankers off the nearby Emirati port of Fujairah and the bombing of an oil pipeline in Saudi Arabia by Iranian-backed fighters in May.

Taken as a whole these unprovoked attacks present a clear threat to international peace and security, a blatant assault on the freedom of navigation and an unacceptable campaign of escalating tension by Iran,” Secretary Pompeo said.

Iran has previously used mines against oil tankers, in 1987 and 1988 in the ‘Tanker War where the US Navy escorted ships through the region. The fact that both vessels remained afloat suggested mines may have damaged them. Seniors American officials said the US had photographed an unexploded mine on the side of one of the tankers and that the US will re-evaluate its presence in the region as it considers a plan to provide military escorts for merchant ships.

The ships’ operators offered no immediate explanation on who or what caused the damage against the Norwegian-owned MT Front Altair and the Japanese-owned Kokuka Courageous. Each was loaded with petroleum products. The Japanese-owned tanker, abandoned by its crew, was towed to a port in the United Arab Emirates on Friday, after a Dutch firm said it had been appointed to salvage the ships. The Front Altair burned for hours at sea and its operator Frontline said an explosion was the cause of the fire and its crew of 23 from Russia, the Philippines, and Georgia was safely evacuated to the nearby Hyundai Dubai vessel.

Iran denied being involved in the attacks last month and its Foreign Minister called the timing of the attacks suspicious since Japanese Prime Minister Shinzo Abe was meeting Supreme Leader Ayatollah Ali Khamenei in Tehran.

Following talks between the two leaders on Wednesday, PM Abe said any “accidental conflict” that could be sparked amid heightened between Washington and Tehran must be avoided. A statement published by Ayatollah Khamenei’s website after the meeting suggested a tense exchange between the two. The Ayatollah had reportedly told PM Abe that, “We have no doubt about your good will and seriousness, but … I don’t regard Trump as deserving any exchange of messages,” and that while Iran remains opposed to building atomic weapons, “You should know that if we planned to produce nuclear weapons, America could not do anything.” PM Abe later told journalists that he stressed with Ayatollah Khamenei that President Donald Trump wanted to de-escalate the tensions, and “I frankly told that to Supreme Leader Khamenei as my opinion.”

CEO of the Dubai-based Institute for Near East and Gulf Military Analysis Riad Kahwaji said either the international community could push Washington to ease up on Iran or continued attacks could encourage global pressure against the Islamic Republic. The burden, he said, would fall on Western powers, particularly the United States but including France and Britain, to protect regional waters. “If there was going to be a war ... it will be the international community against Iran. No one wants to slide into a lone war against Iran. I would not be surprised to see the Chinese and Japanese sending ships to escort at least tankers and ships flying their colors,” he said, given their dependence on Gulf oil.

The "97% Consensus" slogan


TRANSCRIPT

There are so many empty slogans out there I wish we could tackle all of them at once. But the “97% of scientists agree” is surely the elephant in the room. Lots of people have tried to rebut it by dismissing the notion of consensus itself, or by praising the historical examples of renegade scientists who went against a prevailing consensus and turned out to be right. But that unnecessarily concedes the major claim itself, which the evidence shows is simply not true. I hope you enjoy the video, and that you’ll share it widely.
-JR

Narrator

The claim that 97% of the world’s scientists agree is pretty much the ace of trumps in the whole climate debate. After all, who’s going to argue against a consensus that strong, backed by so many experts. But what exactly are they supposed to agree on? If you look behind the curtain, no one seems sure what the experts actually said. Or who they are. Or… anything.

John

At first glance it seems straightforward enough. In 2013 President Barack Obama famously tweeted that “Ninety-seven percent of scientists agree: #climate change is real, manmade and dangerous.”

In 2014, his Secretary of State John Kerry said 97% of “the world’s scientists tell us this is urgent.” And that same year, CNN said “97% of scientists agree that climate change is happening now, that it’s damaging the planet and that it’s manmade.”

Narrator

That’s pretty much what most people think when they hear the 97% slogan: Every scientist believes man-made climate change is an urgent crisis.

But there are millions of scientists in the world. How many exactly were surveyed? When were they surveyed? Who did it? And what exactly did they agree on?

John

Let’s find out. I’m John Robson and this is a Climate Discussion Nexus Fact Check on the 97 percent consensus slogan.

To begin with, there are some ideas that pretty much all scientists accept. For instance that birds are descended from dinosaurs, though that idea was once dismissed as highly eccentric. And when it comes to climate, you don’t need a poll to tell you that carbon dioxide is a greenhouse gas, meaning it likely has some overall warming effect. That’s been known since the mid-1800s. And if you did do a survey, you would find overwhelming scientific agreement on that point.

Also, there are lots of indications that the world is somewhat warmer now than it was in the mid-1800s, the end of a natural cooling period called the Little Ice Age.

Finally, virtually nobody disputes that humans have changed the environment of our planet, by releasing emissions into the air, changing the land surface, putting things in the water, and so forth.

These aren’t controversial ideas, and they’re accepted even by most climate skeptics. What we don’t accept is that any of them prove that humans are the only cause of global warming, or that climate change is a dangerous threat.

If 97% of scientists believed that, it would be troubling. Though even so, we’d still have to find some plan whose benefits outweighed its costs. In any event, that level of consensus that the problem was manmade and urgent would certainly be noteworthy. But the thing is, they don’t agree on that.

A close look at what survey data we have, and there isn’t much, tells us, yes, there is a great deal of agreement that CO2 is a greenhouse gas to some degree, that the Earth has warmed in the last 160 years, and that humans affect their surroundings. But that survey data also tell us there’s far less agreement on everything else including whether we face a crisis.

So where did this 97% claim come from and why is it so widely repeated?

Narrator

The 97% claim seems to have begun with a historian of science named Naomi Oreskes who, in 2004, claimed she’d looked at 928 articles about climate change in scientific journals, that 75% of them endorsed the “consensus view” that “Earth’s climate is being affected by human activities” and that none directly disputed it.

By 2006, in Al Gore’s An Inconvenient Truth, this finding had somehow morphed into “a massive study of every scientific article in a peer-reviewed journal written on global warming for the last 10 years and they took a big sample of 10%, 928 articles, and you know the number of those that disagreed with the scientific consensus that we’re causing global warming and that it’s a serious problem? Out of the 928, zero.”

John

That was a fib. Gore took a study that found 75% endorsed the idea that humans have some effect on climate and turned it into proof that 100% of scientists believe it’s a serious problem. It does no such thing.

Narrator

And nor do the handful of other surveys on the subject. For instance five years later, in 2009, a pair of researchers at the University of Illinois sent an online survey to over 10,000 Earth scientists asking two simple questions: Do you agree that global temperatures have generally risen since the pre-1800s? and Do you think that human activity is a significant contributing factor? [Note: They asked some other questions too, but didn’t report the questions or results in the publication.]

John

They didn’t single out greenhouse gases, they didn’t explain what the term “significant” meant and they didn't refer to danger or crisis. So what was the result?

Narrator

Of the 3,146 responses they received, 90 percent said yes to the first question, that global temperatures had risen since the Little Ice Age, and only 82 percent said yes to the second, that human activity was a significant contributing factor.

Interestingly, among meteorologists only 64 percent said yes to the second, meaning a third of the experts in the study of weather patterns who replied didn’t think humans play a significant role in global warming, let alone a dominant one.

What got the most media attention was that among the 77 respondents who described themselves as climate experts, 75 said yes to the second question. 75 out of 77 is 97%.

John

OK, it didn’t get any media attention that they took 77 out of 3,146 responses. But that’s the key statistical trick. They found a 97 percent consensus among 2 percent of the survey respondents. And even so it was only that there’d been some warming since the 1800s, which virtually nobody denies, and that humans are partly responsible. These experts didn’t say it was dangerous or urgent, because they weren’t asked. [Note: or as noted above, if they were the results weren’t reported.]

So far the claim that 97% of “world scientists” are saying there’s a climate crisis is pure fiction. But wait, you say. There must be more. Yes, there is. But not much.

Narrator

Another survey appeared in 2013, by Australian researcher John Cook and his coauthors, in which they claimed to have examined about 12,000 scientific papers related to climate change, and found that 97% endorsed the consensus view that greenhouse gases were at least partly responsible for global warming. This study generated headlines around the world, and it was the one to which Obama’s tweet was referring.

John

But here again, appearances were deceiving.

Two-thirds of the papers that Cook and his colleagues examined expressed no view at all on the consensus. Of the remaining 34%, the authors claimed that 33% endorsed the consensus. Divide 33 by 34 and you get 97%. But this result is essentially meaningless, because they set the bar so low.

The survey authors didn’t ask if climate change was dangerous or “manmade”. They only asked if a given paper accepted that humans have some effect on the climate, which as already noted is uncontroversial. It could mean as little as accepting the “urban heat island” effect.

So a far better question would be: How many of the studies claimed that humans have caused most of the observed global warming? And oddly, we do know. Because buried in the authors’ data was the answer: A mere 64 out of nearly 12,000 papers! That’s not 97%, it’s one half of one percent. It’s one in 200.

And it gets worse. In a follow-up study, climatologist David Legates read those 64 papers and found that a third of them didn’t even say what Cook and his team claimed. Only 41 actually endorsed the view that global warming is mostly manmade. And we still haven’t got to it being “dangerous”. That part of the survey results was simply invented, by politicians and activists.

Other researchers have condemned the Cook study on other grounds too. For instance economist Richard Tol showed that over three-quarters of the papers counted as endorsing even the weak consensus actually said nothing at all on the subject. And evidence later emerged that the authors of the paper were drafting press releases about their findings before they even started doing the research, which indicates an alarming level not of warming or of consensus but of bias.

The reality is that neither this study, nor a handful of others like it, prove that 97% of scientists believe climate change is mostly manmade, let alone that it’s a crisis. The fact that people who claim to put such stock in “settled science” accept such obvious statistical hocus pocus is both astounding and disappointing.

Narrator

So what do climate experts really think? The year before Obama sent out his tweet, the American Meteorological Society (AMS) surveyed its 7,000 members. They got about 1,800 responses. Of those, only 52% said they think global warming over the 20th century has happened and is mostly manmade. The remaining 48% either think it happened but is mostly natural, or it didn’t happen, or they don’t know. And while it’s possible that the three-quarters who didn’t answer split the same way as those who did, it’s also possible that committed alarmists are more likely to answer such surveys. In any case, it’s a small sample, even of AMS members, let alone of the world’s scientists.

John

There was one more survey a few years later by the Netherlands Environment Agency that claimed 66% of climate experts believed humans were mostly responsible for warming since 1950. Which falls far short of 97% even if it outperforms the other studies.

A social psychologist named Jose Duarte, who specializes in survey design, published an analysis of that one, pointing out that they diluted the sample by including large numbers of psychologists, philosophers, political scientists, and other non-experts, making their results meaningless as a measure of what scientists think. Just as you’ll find that the people who cite that 97% number are overwhelmingly not trained scientists, certainly not trained statisticians.

Narrator

So we’re no farther ahead than when we began. Most experts agree on the basics, namely that carbon dioxide is a greenhouse gas and probably causes some warming and that humans have some impact on climate probably including some warming. But they actively debate the rest: How much warming will there be? Is it a problem? Should we try to stop it, or adapt, or wait and see? These are all important questions and we need good answers.

John

And there's the claim that many of the world’s national science academies, representing hundreds of thousands of scientists across the globe, have issued statements supporting the consensus about global warming and demanding government efforts to cut emissions. The problem is, not a single one of those societies took a survey of their members before issuing their statements in the name of their members. The statements were put out by a small number of activists using their committee positions to make it look as though their views are shared by all the world’s experts. But if they are, why didn’t these authors survey their members before publishing the statements?

There are a couple of other studies that claimed to prove a consensus. But they run into the same problems. All they show is wide agreement on the uncontroversial bits. They offer no information about whether a majority of scientists think global warming is a crisis. And then they’re spun wildly by non-scientists to tell us things they don’t begin to say, often about questions they didn’t even attempt to investigate .

The problem isn’t just that we don’t know what percentage of scientists agrees with this or that statement about global warming. It’s something much worse. All this talk of a 97% consensus amounts to a dishonest bullying campaign to stifle scientific debate just when we need it most because the question looms so large in public policy.

As physicist Richard Feynmann once said, “I would rather have questions that can't be answered than answers that can't be questioned.” And that’s especially true when we’re asked to take drastic action based on those answers.

Not long ago that survey expert I mentioned earlier, Jose Duarte, warned his fellow scientists about the negative consequences of claiming consensus. He said:

“It is ill advised to report a consensus as though it is an aggregation of independent judgments. Humans are an ultrasocial species, and dissent is far costlier than assent to a perceived majority… A scientist who contests the prevailing narrative on human-caused warming, or merely produces smaller estimates, will likely end up on a McCarthyite blacklist of ‘deniers’. Self-described mainstream climate scientists refer the public to such lists, implicitly endorsing the smearing of their colleagues. This is disturbing, and unheard of in other sciences.”

The unfortunate truth is that there is strong political pressure for climate experts not to question claims of impending doom. Those who do so face steep personal and professional costs, including a barrage of abuse that can be highly unpleasant for people who mostly wanted to devote their lives to the quiet pursuit of knowledge not to noisy polemics. And that means we should listen carefully to them when they feel compelled to speak out anyway.

Whether they represent 50%, or 10%, or 3% of experts, what matters is the evidence they bring and the quality of their arguments.

And on that, I would hope we have 100 percent agreement.

For the Climate Discussion Nexus, I’m John Robson.


About the Author

Dr. John Robson is Executive Director of Climate Discussion Nexus. He holds a Ph.D. in American History from the University of Texas at Austin and has worked as a historian, policy analyst, journalist and documentary filmmaker for three decades. He has been examining the climate change issue for many years, including both the science and the policy debates.

UK Government Proposes Backdoor Subsidies to Onshore Wind and Solar

The UK’s Renewable Obligation and Feed-in Tariff have now, thankfully, closed. Unfortunately, the Department of Business, Energy and Industrial Strategy has announced an attempt to restore subsidies in a covert form, via the mysteriously named “Smart Export Guarantee” (SEG).

On the 9th of June BEIS released documents relating to upcoming secondary legislation, The Smart Export Guarantee Order 2019, a proposal to amend the Electricity Supply Licence to require large electricity suppliers (i.e. retail providers of electricity with more than 150,000 domestic consumers) to offer specifically designed off-take tariffs to renewable electricity generators up to 5 MW in capacity. This has been mistakenly reported by the British media as relating principally to “small scale” generators, with the Telegraph, for example, illustrating its story with a photograph of PV panels on the slate roof of a country cottage.

However, 5 MW is sufficient for 20 acres of ground-mounted solar panels, or 2 wind turbines of 150 metres in overall height, and in fact it is such far-from-micro generators that are the most probable beneficiaries of this scheme.

Examination of the government’s detailed proposals shows that the SEG is designed to establish a camouflaged backdoor route by which subsidies to onshore wind and to ground-mounted solar can be restored.

This contravenes the Treasury’s ruling that there should be a moratorium on new subsidies for the sector until the total consumer cost starts to fall, which is not expected until the mid to later 2020s. The Chancellor and his colleagues should be furious at this attempt to evade stated public spending limits.

Superficially, the level of the tariff offered is left to individual suppliers to decide, although it must be positive at all times, meaning that renewable generators will never have to resort to negative pricing, whereby a generator pays to dump their unwanted electricity on the markets.

However, in spite of the absence of a mandatory tariff level, the Department’s “Consultation Response” makes it very clear that government will be applying pressure to ensure that the rates are “appropriate”. Ofgem is to provide “guidance” (see p. 18 of the Consultation Response), and in a thinly veiled threat BEIS writes that “Government will consider reviewing these tariff setting arrangements, if it becomes clear that small generators are not able to access a competitive range of export tariff options.” (p. 15, and also see p. 13).

Indeed, at one point BEIS observes that:

“We will consider reviewing the tariff setting arrangements if we consider that offerings are not reflective of market values or unreasonable discounts are being factored in.”

In other words, the SEG proposal forces suppliers to offer a positive tariff to renewables, leaving them free to set the tariff at any level they like so long as Ofgem and BEIS agree that it is “rational”. They can offer any tariff they like so long as it is above the market rate, or “reflective of market values” to use BEIS’ euphemism. Of course, given the uncontrollable output of wind and solar, the actual merchant value of their electricity is low, well under that of the wholesale price commanded by dispatchable, generators responding to market demand, so even a guarantee of the wholesale price would constitute a subsidy of a significant kind.

BEIS repeatedly refers to the SEG as a “market-based solution” or “market driven” instrument. In truth, the real-world result of the Smart Export Guarantee will be to put suppliers under pressure to offer above market rates to renewables. The Department of Business Energy and Industrial Strategy, not the market, will decide what price is reasonable.

BEIS will deny it, but this is obviously a veiled market coercion backed up with the threat of punishment if suppliers don’t do what, with a wink and a nudge, they are told. The Smart Export Guarantee is a support mechanism, a subsidy under another name. Indeed, it is State Aid.

Strikingly, there is no closure date for the SEG programme (p 18), so without a clear decision from a future government it will apply in perpetuity. In some ways this makes the Smart Export Guarantee worse than the Renewables Obligation or the Feed in Tariff which, though foolish, were at least time limited. A generator had a limited number of years of entitlement to subsidy, and the schemes delivering those entitlements had clear closure dates. The SEG tariffs, on the other hand, will probably be available to a generator for as long as they wish to stay in the market, and the SEG itself would remain a mandatory regulatory requirement on suppliers until a future government decided to cancel it.

In spite of the powerful market distorting character of the intervention, BEIS has decided (pp. 7, 37) that there will be no central and public register of the SEG contracts, the spurious justification offered being that it would “create additional burdens while offering limited benefits” (p. 7). The convenient outcome of this decision is that the consumer cost of the SEG policy will be almost impossible to calculate. Her Majesty’s Treasury, for example, will have no idea how much the SEG is distorting the market, and the costs will not appear in the Office for Budget Responsibility’s calculation of the burden of environmental policies. Futhermore, the general public will be unable to determine how much the SEG is costing consumers through increased prices and bills.

In point of fact, as the Impact Assessment itself admits, it is not possible to estimate the cost of the policy since the tariffs to be offered are not known and the market response is “uncertain”. The policy is uncosted and uncostable. That is surely unacceptable.

However, the Impact Assessment does present some estimates of the policy’s consequences, but these are misleading. Without any justification, the department predicts (in Table 2) that net effect of the tariffs will be to encourage the construction of only trivially, small quantities of new capacity, 1.6 MW per year of wind, one medium sized wind turbine, and 11 MW per year of solar, a handful of sites. These are ludicrous estimates, and if they were true, then the SEG would be an absurdity, a heavy bureaucratic imposition on energy suppliers for, in effect, zero benefit.

In fact, and BEIS surely knows this, with favourable tariffs uptake could be very high, as it was with the Feed-in Tariff (FiT), which delivered 6,000 MW of capacity in few years. The SEG could easily encourage solar and wind capacity as rapidly and on a comparably large scale, and if it does there will inevitably be significant consumer costs. The FiT is now adding £1.5 billion per year to consumer bills. The Impact Assessment does not address the clear possibility, indeed likelihood, that the SEG will result in similar or even greater consumer burdens.

Indeed, it appears that this entire scheme has been expressly designed in order to conceal the probable costs and subvert any reasonable public oversight of and control over the scale and allocation of these new subsidies for renewable generation. Mr Clark, Secretary of State at BEIS, has made many questionable decisions during his tenure. The Smart Export Guarantee could easily prove to be one of his worst.


About the Author

The Global Warming Policy Forum is a London-based think tank which conducts campaigns and activities which do not fall squarely within the Global Warming Policy Foundation’s remit as an educational charity.

Alberta Premier creates an energy ‘war room’

Alberta’s Premier Jason Kenney has announced the creation of an energy ‘war room’ intended to quickly take on industry opponents and paid activists without government bureaucracy holding them back. During the provincial election campaign, Premier Kenney pledged to combat misinformation in the media about the energy sector and fight back against what he said are foreign-funded interests attacking the industry.

Government communications are by nature a little bureaucratic and tend to be a bit slow moving and risk averse. The energy war room will have a mandate to operate much more nimbly and much more quickly with a higher risk tolerance, quite frankly, than is normally the case for government communications,” he said in his announcement.

The office will be based in Calgary, the province’s energy headquarters, with a CAD $30 million budget funded by the United Conservatives’ large emitters levy and overseen by Energy Minister Sonya Savage. Premier Kenney said he would announce who will be leading the initiative “in the near future.”

Premier Kenney said he hopes to have it up and running by the end of the summer and that it will be staffed by government employees and potentially contractors. The war room’s attention will extend all over the world and the Premier said if the government sees misinformation being spread in “paid, earned and social media” the war room would respond on the information battlefield “in real time.

On Friday, Premier Kenney and Energy Minister Sonya Savage held a round table with several industry leaders and advocacy groups, including the Calgary Chamber of Commerce, Canada Action, The Canadian Association of Petroleum Producers and Energy Citizens for advice on how the war room should work.

The Premier said the creation of the energy war room is necessary since the 24-hour news cycle is a thing of the past and the initiative will be able to work freely beyond government communication limitations, where he says taking hours or days to approve a message won’t cut it. “The news cycle is now basically instantaneous with social media,” he said.

Premier Kenney disagreed that the initiative will only serve to galvanize the environmental groups that it’s meant to target, saying a defensive posture in the past hasn’t worked. He says it will be tough to gauge the war room’s success, but one measure will be whether there is a shift in public opinion about Alberta’s energy industry.

BC Chief said Trans Mountain stake should go to Indigenous owners on route

The Canadian federal government is to make a final decision by June 18 on whether the delayed expansion of the Trans Mountain pipeline can proceed. Finance Minister Bill Morneau previously said the federal government will not negotiate the sale of the pipeline it bought for CAD $4.5 billion last summer until after construction of its proposed expansion is “de-risked,” without explaining what that means.

British Columbia Director Shane Gottfriedson of Project Reconciliation, a First Nations consortium planning to buy a majority stake in the Trans Mountain pipeline, says Ottawa should favour communities along the route when deciding who can make an ownership bid. Mr. Gottfriedson, a former Chief of the Tk’Emlups te Secwepemc First Nation and a former BC regional Chief for the Assembly of First Nations, says the emergence of a rival Alberta Indigenous bidder raises concerns about weakening his group’s all-inclusive bid and that Project Reconciliation’s business model is more “inclusive” because it wants to enlist Indigenous groups from BC, Alberta, and Saskatchewan in its CAD $6.8-billion bid for a 51 percent stake in the pipeline project.

Iron Coalition, an Alberta-based organization co-chaired by Chief Tony Alexis of Alexis Nakota Sioux Nation, just announced details of its intended bid. Iron Coalition says it is the only Alberta group mandated by the Assembly of Treaty Chiefs to pursue the stake and is inviting all First Nations and Metis communities in the province to join in.

On Wednesday. Iron Coalition announced it is inviting First Nations and Metis groups from across Alberta to join its bid team, promising all resulting profits will be split equally among members. Project Reconciliation, on the other hand, is asking for support from Indigenous communities throughout BC, Alberta, and Saskatchewan, and plans to place 80 percent of the cash flow from the pipeline stake into a “sovereign wealth fund” to invest in environmentally friendly projects.

Whispering Pines Indian Band Chief Michael LeBourdais says it makes more sense for his organization, the Western Indigenous Pipeline Group, and Iron Coalition to be owners of the pipeline because Trans Mountain brings oil and refined products from Edmonton to Burnaby, BC and it doesn’t pass through Saskatchewan.

Chief LeBourdais said communities in BC and Alberta are the “title and rights holders” when it comes to the pipeline. “Here’s the difference between us and Project Reconciliation,” he said, “We’re the ones bearing all the risk because the pipe goes through my reserve, goes through my traditional territory. These are my rivers, my salmon. We’re bearing all the risk. So we should have more say.”

Canadian Senate approves Bill C-69

The Canadian Senate has approved legislation intended to change how major projects such as oil pipelines are assessed, though with more than 180 amendments. Bill C-69 will now go back to the House of Commons where Prime Minister Justin Trudeau's Liberal government must decide which amendments it will accept.

Amendments include removing the power of the federal Environment Minister to veto a project and altering how the effect of climate change is considered in the regulatory process. Many of the amendments were recommended by the oil and gas industry, and environmental groups have previously railed against unelected senators having such an impact on the bill.

In 2015, the Liberal government introduced Bill C-69 to fulfil its election promise to streamline and restore trust in the environmental approval process for major projects. The legislation in its original form was fiercely opposed by the oil industry and the Alberta government. Critics said it would deter investment in the sector by creating uncertainty and giving too much power to federal ministers to veto projects.

Alberta Premier Jason Kenney welcomed the Senate's decision to pass the bill with the unusually high number of amendments, saying, “While we believe the Senate's revised version of Bill C-69 is still problematic, we believe that it is a very significant improvement, and therefore urge the Government of Canada to allow the bill to proceed to royal assent as amended."

In a statement, Minister of Environment and Climate Change Catherine McKenna said, "We are carefully considering the Senate's proposed amendments and thank them for their work. Our government is open to amendments that will strengthen and improve the Bill.

Canadian Senate rejects BC tanker ban bill report

Canada’s Senate has voted to not to accept a report from its transportation and communications committee critical of Bill C-48, which is legislation to formalize a moratorium on oil tanker traffic off northern British Columbia’s coast. The bill will now proceed to third reading at the Senate’s next sitting.

Last month, the transportation and communications committee passed a motion recommending that the Senate not go ahead with that bill, leading to the report. The report, which was written by Conservative senators, argued that Bill C-48 should be defeated because it would lead to divisions across Canada and trigger resentment among Indigenous communities.

Conservatives and a few Independent Senators voted in its favour, while most Independents and Liberal senators voted against it. Independent Senators who are opposed to Bill C-48 had urged fellow members to reject the report. Had they voted to accept the report, they would have killed Bill C-48 right then and there. Opponents of Bill C-48 have said the legislation would make it difficult to approve energy megaprojects. Bill C-48 will now move to third reading, where Senators can talk about amending the legislation.

If passed, Bill C-48 would enact the Oil Tanker Moratorium Act, which would keep oil tankers that can carry over 12,500 metric tonnes of crude oil or persistent oil from “stopping or unloading crude oil or persistent oil, at ports or marine installations located along British Columbia’s north coast from the northern tip of Vancouver Island to the Alaska border.

According to the bill’s text, “The Act prohibits loading if it would result in the oil tanker carrying more than 12,500 metric tons of those oils as cargo.” The bill would also establish an “administration and enforcement regime that includes requirements to provide information and to follow directions and that provides for penalties of up to a maximum of $5 million.

Alberta’s Premier Jason Kenney criticised the vote, arguing that Bill C-48 unfairly targets exports of oil sands bitumen from Alberta, and said if the bill is passed into law the province will launch a constitutional challenge.

Who’s not taking emissions seriously? Globe-trotting climate delegations not fit to lecture a vastly-improving energy sector

Ever been a visitor to a seniors’ home, or even a hospital, visiting a sick loved one or perhaps someone you have injured, and heard in the background one of those humans that relentlessly whines and complains about everything? And you observe that the care workers are seemingly oblivious to the irrationality and ceaselessness of the griping, even when us mortals are casting our gaze about for a pillow that is, at a minimum, face-sized, and you realize that in some settings that is one’s lot in life – to support and keep alive people who are not just ungrateful but in full attack mode because in their belligerent addled minds they know how to do it all better?

And we’ll return to that thought in a bit, but first let’s consider the world from a different angle, and talk about chickens. Well, indirectly anyway, and not talking about chickens qua chickens (as the philosophers say), but from the perspective of vested chicken interests. No, don’t go there either, I’m not talking about “vested chicken” interests, but “vested chicken interests”, people that make their living from the poultry industry.

The poultry industry has banded together to talk about the value of chicken, to help educate average citizens as to the realities of their industry and how well it is run. They’ve set up a web page to discuss explicitly the “Environmental Performance of Canadian Chicken”. The site has valuable eco-information such as that the environmental footprint of Canadian Chicken has been reduced by 37 percent from 1976 to 2016.  

Whether you are dazzled by that statistic or not is up to you, but consider the very existence of that web page, and the content it confers. Canadian chicken farmers are standing up to point out the contributions they are making to reducing their environmental footprint, and it is undoubtedly substantial. Ten or twenty years ago, that would not have happened.

In fact, many organizations are stepping up to improve environmental stewardship, and while few have historically mentioned these achievements, they are now starting to do so because no one notices otherwise. Chicken-ranch emission levels don’t often come up at dinner parties, unless the banality of small-talk is driving me around the bend and I make it an issue to amuse myself. But people – and the media – sure as hell will notice if any business puts an environmental foot wrong. But improving things doesn’t make news. Just ask the poor “Let’s talk chicken” group how hard it is for that topic to go viral.

Similarly, the energy industry is making some truly staggering progress on the environmental front. Starting with the biggest fish, Canada’s oil sands producers agreed, a few years ago, to a voluntary cap on oil sand emissions of 100 megatonnes (Mt). That achievement did not get the green credit it deserved, because it should have convinced the world for once and for all that the oil sands would not single-handedly flood the world with dangerous emissions. Recently Shell announced that the Quest carbon capture storage project has stuffed 4 Mt of CO2 into the ground, the equivalent of the emissions of a million cars in a year. In the US, a Canadian company – Carbon Engineering of Squamish, BC – is in the engineering phase of building a carbon sequestration project that is expected to include multiple sequestration plants capable of removing 1 Mt per year, each.

Speaking of Carbon Engineering, the company is co-owned by none other than Murray Edwards, who also founded what has become one of the largest petroleum companies on the planet. Canadian Natural Resources is a powerhouse in Canadian oil and gas, and also is a relentless proponent of reducing its GHG and environmental footprint. CNRL has decreased GHG emissions intensity by 18% since 2013; if the rest of the world had followed suit the world would be well on its way to meeting whatever global target the UN set up (though one suspects that would be a moving target, as with the endlessly updated “end of humanity” temperature bogey).

There are countless other examples that can be found easily enough if people are interested in actually finding out. Any knuckle-dragger can find similarly successful projects on Google, if they choose to look. This progress, from the chicken guys to Carbon Engineering to CNRL, is amazing stuff, and the world needs to take notice. But before that will happen, Canada needs to change its narrative, starting with the top.

The federal government and their Gregorian-chanting doom acolytes keep saying that “Canada needs to do something” or, “it’s not good enough, we need to do more.” Well, some parts of Canada ARE doing something. And some parts aren’t, even if they’re just as loud and belligerent as the angry geriatrics who tirelessly shout how they could run the whole place a damn sight better.

How about jet-setting climate activists? And not just them, but anyone else that climbs on a plane. Flying is the lowest of the low hanging fruit – no one needs to fly, ever, except in medical emergencies. But even amongst that crowd, the mindless hypocrisy of the climate activist crowd is nauseating. Flying 20,000 people to exotic locations to attend climate change conferences (and lord, do the activists like exotic locations for conferences) only reinforces the point that cutting emissions materially is unbelievably unpopular. It’s not just the climate travellers; air traffic has grown from 1.5 billion passengers in 1998 to 4 billion in 2017 – and is expected to grow to over 8 billion annually by 2037. That is an incredible amount of fuel that’s going to be burned. (A glaring question arises as to why video conferencing won’t work for those people; businesses are adopting it hand over fist.)

It is high time to end this BS narrative that Canada “isn’t doing anything” to fight global emissions, like Minister McKenna likes to say (louder and louder, because, well, you know…people will “totally believe you” when you shout at them right?). It is patently untrue. It is also an unacceptable narrative to demand that Canada become a low per capita emitter, when it supplies the world with an outsized portion of its resource requirements. Metals, minerals, food, lumber, and hydroelectric power don’t leap out of the ground upon command; it is embarrassing that our politicians can’t seem to realize or articulate that. If they can’t or won’t, the rest of us must. Don’t let loud-mouthed fools get away with it, at the next dinner party – you don’t have to obliterate them with logic, though that can be fun, but don’t shy away from standing up for a continuously-improving Canadian petroleum industry that is crucial to the world’s standard of living.

What is glaringly true though is that the people that are shouting these things the loudest are carrying on with consumptive lifestyles just like everyone else (I’m dying to see an activist-circulated pledge to quit flying forever). Once Canadian business figures out the social media freak show, maybe we can start explaining to the world that they’ve been sadly and severely misinformed.


About the Author

Terry Etam is an independent senior consultant for small and midsize oil and gas companies. His website Public Energy Number One is dedicated to energy education and he is the author of The End of Fossil Fuel Insanity.

Quebec feels Alberta's pain, so why keep blocking pipelines?

As Quebec continues to face it’s own “dirty energy” export problems, their politicians should understand the pain Albertans are going through, but they are still deciding to oppose pipelines.

Last year, Hydro-Quebec generated nearly $15 billion by selling more than 200 TWh of electricity. Despite these high sales, Quebec produces “too much” energy and Hydro-Quebec must regularly let water flow away without generating electricity, resulting in millions of dollars of lost revenue.

Eager to reach new markets — a feeling Albertans appreciate — Hydro-Quebec has pushed to build new export lines through New Hampshire and Maine to reach customers in Massachusetts.

Unfortunately for Quebecers, the province has been getting a dose of its own medicine.

“(Hydro-Quebec) has met fierce environmental resistance by U.S. interest groups, First Nations and some municipal authorities, who say its proposed transmission lines would be disastrous for ecologically sensitive areas,” describes Jesse Snyder, writing for the Financial Post.

In 2018, New Hampshire’s site evaluation committee voted unanimously to reject Quebec’s export line to Massachusetts, which could have generated $10 billion over 20 years, according to Hydro-Quebec.

Quebec’s second route to Massachusetts also faces challenges. While Maine’s Public Utilities Commission has granted a key certificate to the transmission line going through the state, the project is still under review by the Maine Department of Environmental Protection, the Land Use Planning Commission and the U.S. Army Corps of Engineers. The project also faces opposition on the ground where numerous opponents are vowing to fight at every step.

U.S. opposition to Quebec’s hydro-electricity is eerily similar to the sentiments Quebec politicians have expressed towards oil pipelines coming from Alberta.

“The people of New Hampshire rejected the unreasonable burden of international transmission lines proposed by Eversource and Hydro Quebec,” states a Sierra Club release following New Hampshire’s rejection of Quebec’s export line. “This decision gives Governor Baker the perfect opportunity to pick better clean energy projects … Wind and solar power within New England would do more to provide the affordable, reliable, and truly clean energy that we need.”

Sound familiar? Here’s what Quebec’s premier said about pipelines.

“There is no social acceptance for a pipeline that would pass through Quebec territory,” said Quebec’s Premier François Legault. “I am not embarrassed to refuse dirty energy while we are offering clean energy at a competitive price.”

But there’s a key difference. While U.S. opposition has been directed at foreign production, Quebec’s politicians are driving a stake through the heart of our national unity. And it’s costing Canadians big time.

Because governments, including Quebec, have opposed pipeline development within our borders, Canadian businesses have lost out on billions of dollars, Canadian workers have lost out on thousands of jobs and Canadian taxpayers have lost out on billions of dollars worth of government services.

According to analysis from the Canadian Taxpayers Federation, taxpayers lost $6.2 billion between 2013 and 2018 and can expect to lose another $3.6 million every day until 2023 if governments continue to get in the way of pipelines.

That means between 2013 and 2023, a lack of pipeline capacity could cost all provinces and territories at least one new hospital or 25,000 fully funded new teachers for 10 years. With that money, all residents in Quebec City could be exempt from all federal taxes for two and a half years.

Nobody wins when governments get in the way of development. It’s time for Quebec’s politicians to follow the golden rule, allow resources to flow through their borders and help all Canadians pay for more important services.


About the Author

Franco Terrazzano is the Alberta Director of the Canadian Taxpayers Federation and Renaud Brossard is the Quebec Director. The CTF is Canada's leading non-partisan citizens' advocacy group fighting for lower taxes, less waste and accountable government.

AltaGas opens Canada’s first propane export terminal

AltaGas is celebrating the grand opening of its Ridley Island Propane Export Terminal (RIPET), located in Prince Rupert, British Columbia, as the first marine export facility for propane in Canada. The facility, which is expected to ship approximately 1.2 million tonnes of propane annually to customers in Asia, departed its first shipment there on May 23.

Asia is the world’s largest importer of liquified petroleum gas (LPG), with as many as 24 million households using propane for heating and cooking in Japan alone. Propane is also an important feedstock for the petrochemical industry and fuels nearly 25 million vehicles worldwide.

In 2017, AltaGas entered a multi-year agreement with Astomos Energy Corporation, a Japanese propane importer and distributor, to purchase at least 50 percent of the propane shipped from RIPET annually. RIPET provides producers and customers with a significant locational advantage given comparatively short shipping distances to markets in Asia, notably a 10-day shipping time from Canada’s West Coast compared to 25 days from the United States’ Gulf Coast.

RIPET is owned by a joint venture between AltaGas, as to a 70 percent interest, and a Canadian subsidiary of Royal Vopak, as to a 30 percent interest. Royal Vopak is one of the world’s leading independent tank storage companies, with significant experience in marine terminals worldwide; AltaGas has the right to 100 percent of the capacity of RIPET.

AltaGas’ President and Chief Executive Officer Randy Crawford said, “The completion of this game-changing project and the shipment of our first cargo are historic milestones for AltaGas, as well as for our project partners, customers, local Indigenous Peoples, surrounding communities, and western Canada’s upstream energy sector. With RIPET now operational, we can offer producers a uniquely complete solution for their propane, providing premium netbacks and market optionality, while also positioning AltaGas to profitably grow our Midstream footprint – a true win-win for AltaGas and our customers.

Throughout the design and construction of RIPET, AltaGas worked closely with local Indigenous Peoples, communities, and all levels of government to develop opportunities for economic and social development, skills training, and emergency response preparedness. The project provided more than 200 jobs during the construction phase and will provide up to 40 additional permanent jobs for the local economy now that the facility is operational.

Mayor of Lax Kw’alaams John Helin said, “Good partnerships can only form when both parties get to know each other. AltaGas is a good community partner. They included us from the beginning, respected us, trusted us, and worked with us to understand what our community needs. Together, we developed a training program so our people could get good jobs and enjoy the benefits they provide.”

Chief Councillor of Metlakatla First Nation Harold Leighton said, “AltaGas approached the development of their Ridley Island project respectfully, by engaging us early and providing regular updates. They worked with us to accommodate our interests and to find mutually beneficial solutions for their project and our community.

BC is the first province to implement orphan well requirements

British Columbia’s Oil and Gas Commission says the province is the first in Western Canada to impose legal timelines for the restoration of oil and gas wells and the regulation is part of a new liability management plan that ensures all the costs of reclaiming oil and gas sites continues to be paid by industry.

In March, BC Auditor General Carol Bellringer warned that the number of inactive oil and gas wells that have not been properly decommissioned was rising, despite legislation that gave the Commission more powers to speed the process. AG Bellringer’s report said there were almost 7,500 inactive oil and gas wells in BC that had not been property decommissioned and contamination from oil and gas activity can affect human health, ecosystems, and water and air quality.

Energy Minister Michelle Mungall says the regulation enhances the Commission’s checks of a company’s financial health and history to ease pressure on a fund that supports the reclamation of orphaned wells. It will return inactive wells more quickly to their previous state, set a clean-up timeline, and impose requirements for decommissioning wells.

One percent of approximately 25,000 oil and gas wells in BC are orphans that are restored through the industry-funded levy. In a news release, the Commission said that a new liability levy to fund site restorations will be phased in over three years to ensure the Commission has adequate funds to restore all orphan sites.

Devon Energy leaves Canada for $3.8 Billion

Canadian Natural Resources has signed a deal to buy the Canadian operations of Devon Energy for CAD $3.8 billion with asset portfolio that includes thermal in situ oilsands production and conventional primary heavy crude oil operations located adjacent to existing Canadian Natural assets.

The production acquired under the deal totals 128,300 barrels per day, including 108,200 from the thermal in situ operations and 20,100 from the conventional operations. It includes 607,000 hectares of land, of which 405,000 hectares are undeveloped, providing significant upside value and opportunities.

Devon’s heavy oil assets are principally located in the province of Alberta, with net production averaging 113,000 oil-equivalent barrels in the first quarter of 2019. At year-end 2018, proved reserves associated with these properties amounted to approximately 409 million barrels of oil. Field-level cash flow accompanying these assets, which excludes overhead costs, totaled $236 million in 2018.

Proceeds from the sale, which is expected to close on June 27, will be used for debt reduction. President and CEO Dave Hager said, “The sale of Canada is an important step in executing Devon’s transformation to a U.S. oil growth business. This transaction creates value for our shareholders by achieving a clean and timely exit from Canada, while accelerating efforts to focus exclusively on our high-return U.S. oil portfolio.”

Devon put its Canadian assets up for sale February. It is the latest foreign company to reduce its ownership in the oilsands over the past few years, including Norway’s Statoil, France’s Total SA, Arkansas-based Murphy Oil, and Houston-based ConocoPhillips.