Category Archives: Renewables

As Big Oil tanks, why is Canada so slow to adapt?

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Alberta Premier Rachel Notley and Canadian PM Justin Trudeau (Photo: Premier of Alberta/Flickr)

The business model of Big Oil has already started to collapse.  The model is premised on strong growth to fuel high prices and render economically viable the exploitation of expensive-to-develop, non-conventional fossil fuels, including the tar sands and shale oil and gas.

Persistent low oil prices are having a devastating impact on global investments in oil discoveries, which have dropped to an all-time low of 2.4 billion barrels in 2016 , a substantive decline from the 9 billion barrel annual average of the last 15 years.

Sanctioned oil reserves – those identified for new development – dropped to 4.7 billion barrels in 2016, a 30% drop from 2015.  But that doesn’t tell the whole story because the numbers of “new development” projects receiving a final investment decision fell to their lowest level since the 1940’s.  Total oil output was 85 million barrels/day (MB/d) with 69 MB/d coming from conventional sources, 6.6 MB/d from shale wells and the rest from tar sands and heavy oil. 

Added to this portrait, there is currently a market glut due, in part, to US shale oil supplies, combined with existing tar sands production. 

Under these circumstances, BP anticipates stranded assets.

Stranded in Alberta

tarsands industry-kris krüg
Twilight in Fort McMurray (Photo: Kris Krüg)

Naturally, the first projects to be stranded are those extracting expensive resources – the Alberta tar sands being high on that list.  The cost of extracting oil from the tar sands is worse than for any other resource.  It takes one unit of natural gas to produce less than three units of oil.  Capital investment in the oil sands fell about 30% in both 2015 and 2016.  The decline is estimated to be another 11% for 2017.

In Fall 2016, Exxon made its biggest reserve revision in its history, cutting 19% from its reported reserves, most of the cut – 3.6 billion barrels – from its Kearl, Alberta oil sands project.  This is in addition to a re-assessment of 1 billion barrels of other North American reserves.  In keeping with the collapse of the high growth/high price business model, other oil companies, Chevron and Shell included, have lowered their valuations of reserves by more than $50 billion since 2014. 

Shell, ConocoPhillips and Marathon Oil Corporation have also pulled back on their tar sands investments. For Statoil, it has been a total withdrawal from the sands at a loss of $500-$550 million.

Especially significant, Koch Industries, formerly the third largest leaseholder in the tar sands and a strong champion of Keystone XL to bring tar sands bitumen to Koch refineries in Texas, has indicated it’s pulling out of its $800 million Muskwa region lease in Alberta.  This, after a 50 years of Koch Industries involvement in the tar sands.

BP and Chevron are considering getting out of the tar sands business as well.

So far, 17 tar sands projects have been suspended or terminated and no major new projects are planned.

Equally important, Canada’s bitumen is a lower quality oil, which only the US Gulf Coast refineries are capable of handling.  Then, like compounded interest, the high viscosity of tar sands oil renders the cost of transportation higher than conventional oil.  This is because condensates must be added to improve the viscosity.  The result is Canada’s bitumen acquires a lower price in European and Asian markets.

Finally, economics aside, there aren’t any environmentally friendly options for exploiting the tar sands region, an area of 140,000 square kilometres, equivalent to the size of Florida.  The process to get a barrel of oil out of the ground is both energy-intensive and harmful to the environment.  One either has to bake the oil to the top or use open pit mining techniques.  Due to these procedures, there are 170 square kilometres metres of toxic lakes in Alberta.

Higher on the totem pole of environmental considerations, the tar sands are the greatest single source of current and potential emissions in Canada.  These factors mean Canada cannot meet its 2030 GHG reduction targets with a tar sands “business as usual” formula.  Presently, the petroleum sector represents 25% of Canada’s GHGs.

Trudeau stalls progress

Despite all this, the Trudeau government continues to adhere to the industry’s objectives to double tar sands production to 4.3 MB/d by 2030.

But scientists are warning us that to limit the warming of the planet to 2° Centigrade, the carbon budget that the planet will have left is 800 gigatonnes (Gt).  However, the existing and likely-to-be-exploited reserves of fossil fuels represent 15,000 Gt.  This means that Canada has a large role to play by in keeping tar sands reserves in the ground.

Clean Transportation – beginning of end for Big Oil

The transportation sector represents 55% of the global demand for oil.  Consequently, even a modest penetration of the vehicle market would have a major impact on the supply-demand portrait of the petroleum industry.

Volvo’s first fully-electric car is due to arrive in 2019

According to Bloomberg New Energy Finance, about 120 electric vehicle models will be on the market by 2020.  Case in point, beginning 2019, all Volvo models will be either hybrids or fully electric vehicles. Five new Volvo all-electric models will be introduced between 2019 and 2021.  Other European and Asian vehicle manufactures are not far behind.

Then there is China, which is destined to be the leader in the clean transportation revolution, thereby keeping the pressure on the rest of the world – the Trump administration included – to maintain or accelerate the shift to zero and low-emission vehicles. 

Not only has China legislated a 5 L/100km overall fleet corporate average fuel economy (CAFE) target for 2020 – the average fuel economy of each automaker based on its sales for the year in question – but it also has the world’s most aggressive legislation on electric vehicle sales.  China mandates that 12% of automakers’ sales in 2020 must be electric, with interim regulations set at 8% for 2018 and 10% for 2019.  These regulations apply to foreign and domestic manufacturers alike.

By comparison, the US CAFE standard for 2025, and the Canadian clone target, is 4.3L/100km for cars and 5.9L/100km for light duty trucks, as per the decision of the former Obama administration.  The term “light duty trucks” includes the highly popular SUVs, which represent approximately 60% of automakers’ new vehicle sales in Canada.

Of course, the unpredictable Trump administration may weaken the 2022-2025 CAFE legislation, or give them the total axe.  But the good news is that 14 US states are prepared to take the matter to the courts should President Trump decide to do so.

Moreover, California and 9 other US states, plus Quebec, have legislation requiring that 15.4% of each manufacturer’s sales be zero and low-emission vehicles by 2025.  This would apply to electric vehicles and plug-in hybrids.

The global picture also includes the fact that European Union emission standards are considerably more stringent than those of the US.

This leaves little wiggle room for the North American automakers to breath a Trump-related sigh of relief on the pace of the shift to clean transportation.  This assumes that North American manufacturers want to be competitive in the global economy.  Governments shouldn’t have to bail them out a second time.

Methane & Pipelines: Canada forgets Paris

Trudeau’s pipeline dreams cannot be achieved with Big Oil pulling out of the more expensive-to-exploit projects and the inevitable shift to clean transportation beginning around 2020, when electric vehicles will become competitively priced.

More important, Trudeau’s pipeline dreams are incompatible with the Paris Accord and Trudeau’s own modest targets for a 30% GHG reduction relative to 2005, by 2030. 

Trudeau also sidesteps the challenges associated with the global carbon budget by having postponed the required reductions of methane emissions to 2023.  Trudeau approved the Pacific Northwest LNG facility, whose proponent recently pulled the plug due to low global LNG prices. But with his government’s continued support for LNG development, we cannot expect to reduce methane emissions by 40% to 45% by 2025, relative to 2012 levels.  In other words, Trudeau had taken advantage of Trump pulling out of the Canada-US methane agreement that would have the two countries begin reducing methane emissions in 2020. 

Trudeau may have been too quick on the methane trigger though, since a US Court of Appeals in Washington DC has ruled that the Trump administration has overstepped its authority in suspending the rules on methane emission reductions.

Overall, between 2005 and 2015, Canada reduced its emissions by just 2.2%, which indicates it will be impossible to achieve a 17% GHG reduction by 2020, something that is necessary in order to meet Trudeau’s 2030 target.

Consequently, it is high time that the Government of Canada and the provinces start thinking of economic development and the green economy as synonymous…as opposed to the token gestures of the 2016-17 Budget of the Government of Canada.

No wonder Shell and Norway’s Statoil are already becoming diversified energy companies, with a new emphasis on clean technologies. If only Trudeau would apply that thinking to Canada.

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Note to Justin: Pipelines don’t help transition to green economy

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Photo: Canada2020 / Flickr
Photo: Canada2020 / Flickr

When Justin Trudeau talks of oil pipeline projects as part of an energy transition, what exactly is he talking about?

That we will be on the path to reducing our dependency on fossil fuels by increasing our oil dependency in the short term? And that by immaculate conception we will reduce these very same dependencies over the long term? Supposedly, we will switch to a green economy sometime between now and when we are all dead, with the help of Adam Smith’s “invisible hand”.

Green is the future for jobs

When the Trudeau government repeatedly indicates we can grow the economy while protecting the environment, it knows full well that it is reinforcing the myth that the resource economy is about economic development and protecting the environment represents a cost. Journalists and most of the general public, who know nothing about green economics, can identify with this myth. This, despite the fact that the green economy offers better economic development models than the traditional resource economy model in terms of job creation.

If Trudeau was serious about working on a transition now, he could pursue his stated inclinations on the international scene to re-direct Canadian subsidies for the fossil fuel industry. For example, he could encourage, among other things, the diversification of the Alberta economy, and the Western Canadian economy in general, to join the global migration to the high-job creation, high-growth, green economy.

Corporate welfare for fossil fuel sector

The International Monetary Fund has estimated that the direct and indirect subsidies for Canadian fossil fuels work out to $46 Billion/year in US 2015 dollars. Reallocating these subsidies to help Western Canada catch up in the migration to the green economy would offer a more sound path to the country’s future prosperity

The pipeline capacity numbers speak for themselves – namely that we are headed in the wrong direction. The Kinder Morgan Trans Mountain project would increase the capacity of that pipeline from 300,000 barrels/day to 890,000; Enbridge Line # 3 would be doubled to 760,000 barrels/day and Keystone XL is set for Canadian and US approvals to carry 830,000 barrels/day. Energy East has not as of yet been approved, but Trudeau has claimed that opposition to the 1.1 million barrel/day Energy East pipeline is not based on science.

Stars aligned for green economy

Science is telling us that to avoid catastrophic climate change, 80% of known fossil fuel reserves must remain in the ground. The 100 megatonne ceiling that Trudeau likes to brag about as an example of putting limits on tar sands development will increase tar sands emissions by 40%.

The time is ripe for beginning the transition because solar and wind have come down so far in cost that they are often cheaper than fossil fuels. China, the world’s largest energy consumer, has figured this out and continues to set the pace for the rest of the planet with a $361 Billion commitment to renewables in its 5 year plan for 2016 to 2020.

Shells leads way diversifying into clean tech

Somehow, it is the oil giants themselves who have come to the realization that they will have to diversify if they are to avoid being left with large volumes of “stranded assets.” Fitch Ratings have gone so far as to forewarn that the oil companies will have difficulty gaining access to capital if they do not diversify into renewables.

Shell gets it! Shell has successfully won a bid for the 630 Megawatt Borssele 3&4 zone offshore wind project off the coast of the Netherlands. Shell’s chief energy advisor claimed “the penny has now dropped that this is the new business space.” Thus Shell will be more active in offshore wind in 2017, currently eying offshore tenders in Germany and the UK. Shell is also planning to divest from the tar sands. Norway’s Statoil has already done it.

France’s Total has ambitions to be a top-three solar player within 20 years after taking over battery maker Saft and having bought out a majority share in SunPower.

Dong of Denmark is divesting from petroleum and has become the world leading investor in offshore wind with 4.4 GW of offshore wind projects presently under construction off Europe’s coasts.

Cleaner cars en route

This brings us to the matter of the transition in the transportation sector. At this point, the US automakers, such as the CEO of Ford, Mark Fields, are gearing up to tell Donald Trump that the current US automobile fuel economy standards – which incrementally become more stringent through to 2025 – will cost US jobs and raise the average cost of vehicles. But the rest of the developed world will continue to require that the industry dramatically reduce its emissions.

A Morgan Stanley report projects that electric car sales will represent 10% to 15% of vehicle sales by 2025. This is less than Volkswagen’s projection of 20% to 25% of sales for the 2020 to 2025 period but nevertheless reinforces the growing consensus that the tipping point favouring electric vehicles will come in the 2020-25 period.

In effect, Fields is conveying half of the truth. That is, the vehicle manufacturers are investing in getting more efficiency out of the internal combustion engine, something which adds to the manufacturer’s costs. But the other half of the truth is that they will reach a point where investing in electric vehicles will be the more cost effective way to reduce vehicle emissions.  This is what can be appropriately called a transition, as opposed to the Trudeau version of the word, which calls for more petroleum production.

No business case for new pipelines

Stanford University’s Tony Seba predicts that the falling costs of electric vehicle technologies will contribute to oil becoming redundant by 2030. That translates into a too-short life span for tar sands pipelines to be an acceptable economic proposition.

Further on the Fields argument on the cost of change, innovation should be regarded as a normal cost of doing business because the alternative is that of no improvements and being outclassed by one’s competitors.

Improved fuel economy a good investment

The US Alliance of Automobile Manufacturers laments about the cost of improved fuel economy. It lies.

The increasing cost of new vehicles has little to do with fuel efficiency improvements and more to do with consumers buying more fully-equipped vehicles for both comfort and entertainment; the shift away from cars to the high-profit margin light duty trucks and SUVs in particular; and automakers’ increasing pursuit of the higher end luxury market.

The reality is that Canada can support a more aggressive transition to zero and low-emission vehicles with standards more stringent than those of the US federal government. In doing so, the Government of Canada could join US states and the Government of Quebec, all of which have taken a different path than that of the US federal government.

Enough of Trudeau’s greenwashing

We could agree with Trudeau’s greenwashing line that we need to engage in a transition and that we can develop the economy while protecting the environment. But the transition needs to begin now to guarantee the economy of tomorrow. To do this we need a green economic development model.

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Despite Trump & Trudeau’s pipeline fetish, green economy will keep booming

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US President-Elect Trump (Flickr/Gage Skidmore) and Canadian PM Trudeau (Flickr/Canada 2020) are both big on pipelines
US President-Elect Trump (Flickr/Gage Skidmore) and Canadian PM Trudeau (Flickr/Canada 2020) are both big on pipelines

Forces at play suggest there will continue to be significant advancements in the global migration to a green economy.  Trudeau and Trump are rowing against the current.

Despite Trudeau’s continued focus on tar sands extraction and limiting provincial action on climate change; despite Trump’s obsession with fossil fuels – coal in particular – the US and Canada will be swept up in these global green economy currents.

Moreover, these global forces strengthen the case that the proposed tar sands pipelines – Kinder Morgan, Energy East and Keystone XL in particular – are redundant, superfluous or pipelines to nowhere.

Trudeau stuck on resource economy

One can be understandably be pessimistic with Trump’s appointment of climate change deniers to his Cabinet. In Canada, there are also grounds for pessimism given Trudeau’s recent track record, including:

  • Approving or backing the Kinder Morgan, Line 3 and Keystone XL pipelines, plus two BC LNG plants – Petronas and Woodfibre – and BC’s Site C dam
  • His favourable view on the Energy East pipeline, to the effect that he said that opposition to this pipeline is not based on science
  • A razor-thin climate plan, stemming from the agreement with most of the provinces
  • This means it would be very difficult to meet even the Conservative GHG reduction target, one now adopted by the Liberals and calling for a measly 30% yearly GHG reduction in 2030 relative to 2005 levels
  • His heavy reliance on carbon pricing, despite the fact that, as a stand-alone measure, this is not likely to be very effective – especially with low oil prices and the low carbon price proposed
  • Confirming in his 2016-17 Budget the National Energy Board’s (NEB) role for environmental impact assessments for pipelines
  • His plan to modernize the NEB subsequent to a 3 year-long process entailing advice from a panel of 5 people, 3 of whom are close to the oil and gas industry

On the issue of over-relying on carbon pricing, two provinces come to mind. First, BC has a $30/tonne carbon tax, but the government is quite comfortable with the Petronas-backed Pacific Northwest LNG facility and the $6 Billion Pacific Trails gas pipeline to connect to BC’s northeast shale gas to the LNG facility. This project alone would raise BC’s emissions by 6.5 to 8.7 megatonnes/year or an 8.5% increase in GHGs/year

A second case in point is Quebec. Despite its cap and trade system, it went ahead with new legislation to facilitate the exploitation of fossil fuels in the province and $450 million in public subsidies for a cement facility in Port-Daniel, which would become one of the greatest sources of emissions in the province at 1.7 million tonnes of CO2 equivalent/year.

The current Quebec government is also favourable on Energy East.

And yet…renewables are now cheaper than coal

Obama-gets-tough-on-coal-plant-emissions-with-30-percent-reduction
Outgoing President Obama visiting Copper Mountain solar plant in 2012 (Photo: Sempra U.S. Gas & Power)

Let’s take a look at the emerging energy landscape in the US. 

Trump’s rhetoric aside, the falling cost of renewables will make it hard for Trump to give full priority to fossil fuels in the electricity sector.  Since 2009 in the US, the cost of solar has been cut by nearly half and wind has fallen by two thirds.  Solar and wind installations are now cheaper than coal in many parts of the US. This trend is exemplified by the fact that 99% of new US generation capacity in the first quarter of 2016 was represented by renewables, 64% from solar. For the year 2016, renewables will likely account for two thirds of new capacity.

As a result, there is now 20 gigawatts (GW) of wind capacity under construction in the US, or in an advanced development stage, which will ultimately raise the US total wind capacity beyond its current 75 GW.  What Trump will not be able to ignore are the 88,000 jobs in the US wind sector, especially the 21,000 jobs in US wind tech manufacturing. 

As for solar, it is poised to shake up global markets as unsubsidized solar is beginning to outcompete coal and is coming in below the cost of wind projects. 

This reality undermines Trump’s ambitions for revitalizing the industry with “clean coal.”  Not only has the popularity of renewables and natural gas resulted in the producers of 45% of the country’s coal output having filed for bankruptcy, but also the least expensive, least costly and easiest to mine US coal sources have been fully exploited, making a return to the good old, cheap coal days unlikely.  Against this backdrop, 11 GW to 14 GW of US coal capacity went offline in 2015.

Further on Trump’s promise to bring back coal jobs, these new economics had the US solar sector adding more jobs in 2015 than the US oil, gas and pipeline sectors combined.

And despite Trump’s rhetoric, he will not be able to counteract the global implications of China, the world’s largest energy consumer, which continues to shake up global energy economics with its massive investments in renewables and its war on coal.  Not only has coal dropped from 80% of China’s electrical generation sources in 2011 to 70% in 2015, but the projections are that by 2025 coal will represent just 55% of China’s electricity mix.

With the 2 principal consumers of coal, China and the US, at the precipice of massive declines in demand for coal, the International Energy Agency is projecting global coal demand to stagnate over the next 5 years.

Also on the global scale, emerging economies are giving priority to solar energy.  Auctions in Chile and India have had solar coming in at half the price of coal power.  Accordingly, the amount of solar PV added globally is likely to exceed wind capacity additions with as much as 70 GW installed in 2016, compared to 59 GW of wind.

With US coal exports largely dependent on China and India, this all spells more bad news for the US coal industry.

Within the next decade, global clean energy installations will represent more new capacity added than coal and natural gas combined. This green revolution is advancing more quickly in emerging markets, where renewable energy investments were greater in 2015, at $154.1 Billion, than in OECD countries, at $153.7 Billion.

Automotive sector shifting fast to electric

A solar ev charging station in San Francisco
A solar ev charging station in San Francisco

But the most significant cause for optimism lies ahead, with the shift towards low and zero-emission vehicles being imminent.  This has major implications for future oil demand, since the transportation sector represents 55% of global petroleum demand

Here, China continues to lead the way. Up from 331,000 electric vehicles sold in the country in 2015, the projection for 2016 is for 400,000 vehicles – giving us every reason to believe China will meet its target to manufacture 2 million eco-vehicles/year by 2020.

European nations are joining the bandwagon.  The German federal upper house, the Bundesrat, adopted a motion to ban internal combustion engine vehicles from the new vehicle market after 2030.  Meanwhile, Norway has passed legislation to do the same by 2025, and the Netherlands may well join them.

In effect, Norway is leading the pack, as this country is well on its way to achieving its targets, with nearly half of its 2016 new vehicle sales being plug-in hybrids and electric vehicles, up from 28% in 2015.

With respect to the vehicle manufacturers, it is not just that Volkswagen has announced an investment of $11 Billion in a battery manufacturing facility or its projection that 20% to 25% of its sales will be electric during the 2020 to 2025 period.  Many vehicle manufacturers are actively preparing for the introduction of low and zero emission vehicles. FordHyundai-KiaVolkswagen, Mercedes, BMW, Toyota and Volvo, all have ambitious plans for a wide range of electric and plug-in hybrid models by 2020.

Concurrently, the entry of electric trucks into the marketplace will also make a difference.

China’s electric vehicle-leading enterprise, BYD, will soon triple the 400 employees at its e-bus manufacturing facility in California to make trucks, as well as more buses. Canada’s Lion Bus, manufacturer of electric school buses, will be adding class 5, 6, 7 and 8 trucks to its lineup.  Mack Trucks is working in collaboration with Wrightspeed to produce an electric garbage truck and Tesla has added trucks to its Master Plan.

In keeping with these considerations, by 2020, the UK will have more charging stations than gasoline stations. In effect, it appears that Shell’s UK arm also sees the writing on the wall in that the company is thinking of introducing charging stations at its service stations.  This my happen as early as 2017.

European automakers are also getting into the act. In November, 2016, Daimler, BMW, Ford and the Volkswagen group (the latter includes Audi and Porsche) signed a Memorandum of Understanding to set up a fast Combined Charging System to cover common long distance travel routes in Europe – 400 station locations in all. The development of the network would begin in 2017 and the goal will be to have thousands of fast charging points on the continent by 2020. Other partners/manufacturers would be welcome to join the network.  These fast charging stations will offer up to 350 kW of power, compared with Tesla’s fast chargers, which deliver 120-135 kW.

The Combined Charging System will be complemented by Hubject,  a cross-provider, cross-border e-Roaming platform that connects 40,000 charge points worldwide. Charging point locations, availability and payments will be possible with the one application. The application is backed by a European consortium that includes Volkswagen, Daimler, BMW and Siemens.

Going one step further, the EU recently approved regulations that all new and renovated homes and apartments must have charging stations in place beginning 2019. 

California will be adopting similar requirements to the effect that all new buildings and parking lots must have the wiring and control panels in place to receive charging stations.

Speaking of the US, Chargepoint, a private supplier of charging stations, installed its 30,000th station in August 2016. 

On the downside, Trump may weaken or eliminate regulations for the vehicle manufacturers to improve their respective corporate average fuel economies. That said, the global government policy momentum and global private sector competition among the world’s vehicle manufacturers will ensure a progression to low and zero emission vehicles regardless.

Canada and the US will have to change

Currently, the global supply of petroleum on the market exceeds global demand. This is the result of a flattening of demand, combined with an abundance of new supply sources, due in part to the production of US shale oil, together with existing tar sands exploitation.

An internal memo to the federal Deputy Minister of Finance, released to the public in mid-July, 2016, indicated that existing pipeline capacity is sufficient to accommodate tar sands industry needs until 2025.

Not surprisingly, Dinara Millington, Vice-President of the Canadian Energy Research Institute, echoes the end of the era of exponential oil demand growth by pointing out that the decline oil prices is a reflection of the collapse of the traditional supply-demand model.  The demand has not materialized to accommodate increased supply in international markets.

To this effect, Exxon is reassessing 3.6 Billion barrels of oil sands reserves and several other oil firms, Chevron and Shell included, have lowered their valuations of reserves by more than $50 Billion since 2014. More recently, Norway’s Statoil announced its withdrawal from tar sands investments at a loss of $500-550 million.

Also a liability for Canada’s tar sands, Canada’s bitumen is a lower quality oil which only US Gulf Coast refineries are capable of handling.  The result is Canada’s bitumen will acquire a lower price in European and Asian markets than conventional supplies.

Trudeau on wrong track

Justin Trudeau and Christy Clark (Province of BC/Flickr CC)
Justin Trudeau has backed BC Premier Christy Clark’s LNG vision (Province of BC/Flickr CC)

The pending decline in the appetite of the transportation sector for petroleum combined with the unstoppable momentum of the global green economy, indicate that Canada, with its big push on pipelines, is on the wrong track. 

The Trudeau’s continued focus on pipelines and resource economy means it is unlikely that Canada will achieve even the poor Conservative GHG reduction target it has adopted. This is sad since there are 6 to 8 times more jobs per government investment unit created by investments in green jobs than from funds sunk into the traditional resource sectors.

Case in point: Quebec’s electric vehicle sector is not on the federal radar screen.  (This sector includes 2 battery manufacturers; work underway on the development of a super battery; 2 charging station manufacturers; a developer of an electric motor wheel; an electric school bus manufacturer which plans on branching out into truck classes 5 to 8; a manufacturer of an urban transit electric bus soon to be included in a pilot project in Montreal; and several research facilities)

Whether they like it or not, the above facts mean that Trudeau and Trump will soon be forced to adjust their respective mindsets to address the emerging global green economy.

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Electric Vehicles are set to take off…so why is Trudeau still pushing pipelines?

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Tesla Model 3 at March 2016 unveiling (Steve Jurvetson/Flickr)
Tesla Model 3 at March 2016 unveiling (Steve Jurvetson/Flickr)

In my previous March 2016 article “Pipelines to Nowhere“, I made the point that the proposed Canadian pipelines are about increasing the international supply of petroleum when all the signs are that demand fossil fuels are levelling off over the longer term.

For example, recent data showed renewables represented 99% of new US electrical generation capacity added in Q1 of 2016, up from the 68% in 2015 referred to in my March story, leaving one to believe that further progress has been made since year 2015, when 90% of global new capacity added was associated with renewables.

That said, it is the incredible, emerging trends in the transportation sector – currently nearly 100% dependent on petroleum – that are on the verge of severing the world from its heavy addiction to oil.  On that note, the majority of car companies have plans for bringing in a wide array of plug-in hybrid and electric vehicles by 2020 and by that time an electric vehicle would be competitively priced versus a conventional internal combustion engine vehicle.

Big car makers get serious about EVs

Notwithstanding this progress, the transportation times appear to be changing faster than indicated since my March article was published.  A couple of significant examples confirm this trend, including:

1)  Volkswagen recently announced it will invest $11B in a battery manufacturing facility and expects 20% to 25% of its sales – 2 to 3 million vehicles/year – to be electric vehicles by 2025

2) Tesla has $1000 deposits for 370,000 Model 3 vehicles that won’t be delivered until 2017

3) A projection coming out of the UK suggests that by 2020 there will be more charging stations in the UK than gasoline stations

4) Porsche is hiring 1400 people for the development and deployment of its new electric sports car

5) Mack, Tesla and China’s BYD have made it known they will be bringing electric trucks into the marketplace, with the BYD truck to be assembled in Lancaster, California – the same place BYD manufactures electric buses – and the two types of vehicles will share many components.

Outpacing the aforementioned examples, Norway has increased its sales of plug-in hybrids and electric vehicles from 25% of the total new vehicles sold in 2015 to 28% in the first half of 2016.

Germany, Netherlands could ban gas cars

Against this backdrop, the Netherlands and Germany are now mulling over banning gasoline cars from new vehicle offerings, beginning in 2025.  Then there is the news from Australia that it is placing fast-charging stations around the country to sell electricity at the same price as that from one’s home plug outlet.

And as I indicated in “Pipelines to Nowhere“, China and California have myriad policies to make zero emission vehicles (ZEVs) the shape of the future, with China having a target to manufacture 2 million eco-vehicles/year by 2020 and California targeting 1.5 million ZEVs on its roads by 2025.

Resistance is futile

So why are electric vehicles only 1% of total vehicle sales now and how can so much happen by the end of the decade to drive such transformative change?

First, there are the dealers.  According to a survey conducted on behalf of the US Sierra Club, dealerships are doing everything imaginable to discourage potential clients from purchasing electric vehicles by not keeping them in-stock, keeping them not charged for a test drive and salespeople ill-informed on what one needs to know about electric vehicles.  The salespeople much prefer to push the high-volume, high-profit margin SUVs.  Funny coincidence, I experienced a similar scenario when I tried to purchase a hybrid in the 2008 model year.

2016 Chevrolet Suburban
2016 Chevrolet Suburban

Then there is the matter or the US Corporate Average Fuel Economy (CAFE) standards cloned in Canada, which set sales-weighted average fuel consumption targets  for each vehicle size category, as well as sales-weighted targets for the overall vehicle sales of each manufacturer.  The perverse side of this concept is such that if a manufacturer has sales heavily weighted in favour of large, high-energy-consuming vehicles, its overall sales fuel economy target becomes more lenient, otherwise known as “compliance flexibility.”   The manufacturers are now exploiting this loophole to the limit, even to a point of making some models bigger to be subject to less stringent fuel economy standards.

In theory, the automakers have to make up for failing to meet overall sales-weighted fuel consumption targets in later years, leading up to 2025.  But the automakers are already gearing up for sob stories to request more leniency on the part of the US government, with the excuse that they have to accommodate unanticipated client demand for the vehicles with the high profit margins, the SUVs.

Here in Canada, the Government of Quebec has introduced Bill 104 to duplicate the stipulations of California and 9 other states, on the percentage of zero emission vehicles (ZEVs) and hybrids manufacturers must sell from 2018 to 2025 – that percentage incrementally increasing each model year from 3% in 2018 to 15.5% in 2025.  The Quebec dealers and the manufacturers are putting up a fight that essentially says that: a) the policy won’t work because the public must be free to choose and the demand is not there for ZEVs and hybrids; and b) what is good enough for California and 9 other US states is not good enough for Quebec.

Meanwhile survey after survey has shown that electric vehicles are favoured by the public, and 2020 is the tipping point when ZEVs become competitive.

The City of Montreal has acknowledged this public receptivity in that it will shortly adopt legislation requiring car sharing services to incrementally offer greater percentages of electric vehicles, beginning in 2018 and reaching 100% electric by 2020!

Trudeau Govt failing Canada on climate change

Meanwhile, the federal Liberal Budget for 2016-17 only allots $56 million over two years for cleaner transportation, with a large portion of these funds to be invested in developing standards and regulations  – I thought the latter expenses were part of government operating costs!  And the Trudeau government has already reneged on its promise to invest in charging stations and have a government vehicle procurement plan favouring ZEVs.

The current government has its mind set on pipelines for which there will not be a corresponding increase in consumption to justify increasing the supply. Plus, Canada can’t meet the Conservative GHG reduction targets should these pipelines be built. 

Justin Trudeau speaks at the Paris climate talks - flanked by Canadian premiers (Province of BC/Flickr)
Justin Trudeau speaks at the Paris climate talks – flanked by Canadian premiers (Province of BC/Flickr)

But wait, you say.  The Liberals have said they are going to overhaul the environmental review process.  The context is a reaction to a Federal Court decision to annul the National Energy Board’s recommendation for approval of the Northern Gateway pipeline and a desperate attempt to avoid a repeat overturning of the NEB approval of the Kinder Morgan TransMountain Pipeline to triple its capacity from 300,000 to 890,000 barrels/day.  Trudeau’s support for the latter pipeline dates back to the 2015 election campaign.

Taking a closer look at this Trudeau concern about the implications of the aforementioned Federal Court decision for the Kinder Morgan project, Trudeau appointed a three-person panel to advise the government on the NEB approval of the TransMountain project.  One of the three panelists is former Tsawwassen First Nation Chief Kim Baird, who participated in an executive exchange program with Kinder Morgan.  Ms. Baird is now a registered lobbyist for liquefied natural gas projects in BC.  Hardly the profile of a credible panelist to advise the Trudeau government.  The President of the Union of BC Indian Chiefs, Stewart Philip, has referred to this panel appointment as a conflict of interest.

More conflicts of interest

Now, Trudeau has an even bigger NEB conflict of interest on his plate.  Within the last few days after the August 29, 2016 stillborn start to the Montreal segment of the NEB hearings on Energy East, the hearings were suspended indefinitely in response to two formal requests that two of the three NEB commissioners on Energy East be removed because of a conflict of interest.  These two commissioners, Jacques Gauthier and Lyne Mercier, along with the NEB President, Peter Watson, met with former Quebec Premier Jean Charest in January, 2015, while Charest was acting as a consultant for TransCanada.
All Jim Carr, the Minister of Natural Resources Canada, could say in reaction to the latest NEB fiasco is that the NEB needs to be modernized to avoid these conflict of interest situations.  This is in keeping with Budget 2016-17, which confirms the NEB’s role evaluating the environmental impacts of pipeline projects.

What should be at the heart of the question of the environmental review process is the Harper government’s decision to put the National Energy Board in charge.  Tinkering with the oil-tainted NEB engine is about changing an image and not the substance. Substance would suggest the re-habilitation of the Canadian Environmental Assessment Agency, or some equivalent, to get the job done – properly!

Canada needs solid, clear legislation

Canada is still operating under the traditional resource economy model while its competitors are moving into fast-forward on the green economy.  This is the context for Budget 2016-17 offering less for clean technologies than the budgets of previous Liberal governments.

There is a moral or common thread to this piece.  First, when the government objectives are clear and well-laid out in policy and legislation, industry will comply.  Second, where things are fuzzy, or in the all of the above category, industry will procrastinate though whatever loopholes are made available to them.

Canada needs solid and clear policies and legislation, not meaningless clichés or platforms for “all of the above.”

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South Australia blazes trail for renewable energy

South Australia blazes trail for renewable energy

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South Australia blazes trail for renewable energy
Australian solar farm (Flickr cc license/BAS)

First-time visitors to Australia are often drawn to the big city attractions of Sydney and Melbourne or the fabulous beaches of Queensland’s Gold Coast. I’ve always had a soft spot for Adelaide in South Australia, a city built more on a human scale, where downtown can be easily navigated on bike, foot or tram. For me, Adelaide’s greatest attraction is a huge market right in the city’s centre.

Australian hot springs (Flickr cc license/Geo Thermal)
Australian hot springs (Flickr cc license/Geo Thermal)

When I first visited Adelaide in 1993, I met Mike Rann, a young, charismatic aboriginal affairs minister in South Australia’s Labor government. His party lost the election that year, but Rann later became party leader and then state premier in a minority government in 2002. I met him again in 2003 when he outlined ambitious plans to address climate change by aggressively moving South Australia into renewable energy. Wind and solar were the obvious opportunities, but he was also enthusiastic about “hot rocks”, superheated pockets that could create steam to drive turbines for electricity.

Suzuki Forest

Rann proudly introduced me to the Youth Conservation Corps. Young people in this program are trained to restore land overgrazed by sheep or cattle, plant trees and make wildlife inventories. Rann surprised me by dedicating 45 hectares of reforestation land as Suzuki Forest.

I met young people working on “my” forest who enthusiastically told me about the number and variety of birds they’d seen that day, described plant species and talked about how many trees they had planted. Many were street kids, inspired by the chance to learn about nature and conservation and proud to be re-greening the area. I was impressed by their passion and eagerness. They believed in what they were doing and it provided a small income to get them off the streets.

My Adelaide visit that year ended at the World of Music and Dance festival, or WOMAD, a marvelous annual event where I heard the late Richie Havens sing his famous song “Freedom”. To top it off, I met Uncle Lewis O’Brien, a Kaurna elder who honoured me with the name Kaurna Mayu (mountain of a man).

I kept in touch with Mike Rann over the years. He was re-elected with majority governments in 2006 and 2010, then resigned in 2011. Last March, I returned as a guest of WOMADelaide. Although Rann was in Italy where he is now Australia’s ambassador, his wife Sasha welcomed me back. Again, the festival was a wonderful gathering of local and visiting musicians and dancers (including two groups from Canada), and to my delight, Uncle Lewis is alive and welcomed us to his country.

40% of electricity from solar, wind

Australia's Sundrop Solar Farm (Flickr cc license/UCL Engineering)
Australia’s Sundrop Solar Farm (Flickr cc license/UCL Engineering)

In Adelaide, I met Ian Hunter, South Australia’s environment minister, who boasted of his state’s tremendous progress in renewable energy. South Australia gets 40 per cent of its electricity from solar and wind and hopes to reach 50 to 60 per cent within a few years. The area is blessed with abundant sunlight, but few jurisdictions have committed to solar as aggressively and successfully as South Australia. From my hotel room, I looked down on a factory roof covered in rows of solar panels, which are now mounted on one of every four houses.

I also returned to Suzuki Forest. I was delighted and amazed at the variety and size of plants and trees, and the birds that now flourish among them. Perhaps my forest has been protected by neighbouring Schwarzenegger Forest!

Competing pressures

Despite the impressive work in South Australia, most of the country is caught between the terrible reality of climate change — droughts, massive fires and dying reefs — and continued pressure to serve the economy by relying on fossil fuels, including recently approving the world’s largest coal mine.

Australia’s centre-right Liberal government under Prime Minister Tony Abbott gutted the previous government’s actions on climate change, disbanding the Climate Commission headed by world-renowned climate expert Tim Flannery in 2013 and cancelling Australia’s modest carbon price in 2014. Fortunately, the public started funding Flannery’s work, and the commission was reborn as the independent Climate Council. Abbott was booted by his own party after a short reign.

Nevertheless, the country — like much of the world — is in the throes of deciding whether to act seriously to reduce the threat of climate change. South Australia shows that many opportunities exist to do so.

David Suzuki is a scientist, broadcaster, author and co-founder of the David Suzuki Foundation.

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Trudeau abandons green election promises, lacks real climate plan

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Justin Trudeau talking a good game at the Global Progress summit (Canada 2020/Flickr)
Justin Trudeau talking a good game at the Global Progress summit (Canada 2020/Flickr)

“Not everything that can be counted counts, and not everything that counts can be counted.” -Albert Einstein

With the recent National Energy Board approval of the Kinder Morgan pipeline and Justin Trudeau’s enthusiastic post-election remarks to the effect that Canada can build pipelines and address climate change concurrently, it is time to take stock of just where the current government is heading us. 

Put bluntly,  it remains questionable whether Canada can meet the very modest Conservative 2020 GHG reduction target should the Energy East and Kinder Morgan pipelines get the green light. Worse still, the Trudeau Liberals do not have a serious plan on climate change.

Western Canadian regulators band together to reduce pipeline delays
Under Trudeau, several major pipelines are closer to being built

True, Justin’s Liberal government came to power as a champion for addressing climate change – promising to establish a credible environmental assessment process for proposed pipelines, invest in clean tech, and reduce subsidies for fossil fuels.  Yet, barely half a year later, it is in full backtrack mode, as the government’s recent budget demonstrates. 

Most disheartening, while the green economy is advancing at an incredibly rapid rate in China, Europe and the US, the actions of the Liberal government on increasing the supply of petroleum to international markets and its 2016-17 budget initiatives on climate change will only increase the green economy jobs and growth gap between Canada and its competitors.

Market for fossil fuels disappearing

Consider for a moment that two of the largest markets for fossil fuels are electrical power generation and transportation – the latter nearly 100% dependent on petroleum.  The transition to a green economy is well-advanced in the electrical sector, as I discussed in my recent CSC article, “Pipelines to Nowhere, while the transportation sector is showing signs that a transition is imminent. 

Signs of the times

Like a dog hanging on to its bone, the Liberals seem to be oblivious to the clear signs of the beginning of the end of the fossil fuel era. This despite the staggering warning signs. Here are just a few of the biggest ones:

1) 90% of all new global electrical generation capacity in 2015 came from renewables

2) Global emissions have remained flat since 2013

3) China’s coal consumption declined in both 2014 and 2015

4) US coal producers representing 45% of US coal output have gone into bankruptcy

5) 21 countries have experienced economic growth while diminishing their respective emissions since 2000

6) The tipping point when an electric vehicle becomes comparably priced to a conventional one is predicted to occur as early as 2020 – with the overall cost to the consumer being cheaper due to lower fuelling and maintenance costs.

7) The arrival of zero and low-emission vehicles, even under modest market penetration scenarios, will have devastating impacts on demand for petroleum.

8) China is a world-leader, with 331,000 electric vehicles sold in 2015. By 2020, it is expected to manufacture 2 million eco-vehicles/year and have 5 million on the road

9) Ford, Hyundai-KiaVolkswagen and Volvo all have ambitious plans for a wide range of electric and hybrid models by 2020. Meanwhile, a full 10% of BMW’s North American sales in April 2016 were electric vehicles and 25% of all 2015 new vehicle sales in Norway were electric

10) The Chief Financial Officer of Suncor, Alister Cowan in April 2015 has candidly said that “The years of large, multi-billion projects are probably gone

11) The Canadian oil and gas sector will see just $17 Billion in revenues for 2016 vs. $30 Billion in project spending (which is already a 62% decline from the previous year)

Despite all of this, the Trudeau government continues to do everything possible to promote Energy East and the recently NEB-recommended Kinder Morgan pipeline, for which the signs suggest that these pipelines may be economically redundant. So many new developments have occurred on this file since my “Pipelines to Nowhere” article was first published in The Common Sense Canadian in March that I’ve done an update to this piece on my blog.

Time to shift fossil fuel subsidies to clean tech

While the Liberal election campaign included a reduction of fossil fuel subsidies, Budget 2016-17 failed to deliver.

An offshore wind installation in Denmark (United Nations Photo/Flickr)
Offshore wind installation (United Nations Photo/Flickr)

With the $46 Billion/year Canadians already spend to subsidize the fossil fuel sector, coupled with the glut of supply on the global market, both the industry and country urgently need to diversify the Western Canadian economy and catch up to the high-growth, high-job-creation clean tech sector. The moment is ripe for the Canadian fossil fuel sector to be a leader in a common, pan-Canadian effort to join the global green economy.

Such diversification of the sector is possible. Just look at Norway’s Statoil, which recently made the former head of its renewable energy division its new CEO and defined clean techs as one of the prime pillars of its overall corporate goals. The company has become a major global investor in clean tech innovation, including a floating offshore wind platform and recently-created venture capital entity to invest in clean tech start-ups.

Trudeau fails to regulate the regulator

Perhaps most disconcerting is the Liberals’ broken election promise to create bonafide environment impact analyses for pipelines.

First, the “interim plan”, for National Energy Board (NEB) hearings on Energy East is “rubber stamped” in Budget 2016-17 by way of involving a mere 3 month prolongation of the hearings and an expanded NEB mandate to take into account emissions.  This constitutes insufficient time to put into place research contracts for scientific studies on GHG impacts.

More disturbing is that Budget 2016-17 cements the industry-friendly NEB as the permanent authority for environmental impact analyses concerning pipelines. Unfortunately, the much-dismantled and formerly internationally-respected Canadian Environmental Assessment Agency is relegated to that of an advisory body on environmental impact analyses.

Bonafide environmental impact assessments would entail starting the Energy East and Kinder Morgan review processes over, with the right parameters from the outset, and overseen by a competent team – at least comparable to that of the former Canadian Environmental Assessment Agency.

This is precisely the perspective that should have been adopted with respect to Kinder Morgan. Ditto for the upcoming federal and Government of Quebec hearings on Energy East.

Paying polluters

A tar sands operation in Fort McMurray, Alberta (photo: Chris Krüg)
Tar sands operation in Fort McMurray, Alberta (Chris Krüg)

The 2016-17 Budget’s three-sentence description of the Low Carbon Economy Fund bears a resemblance to the $1B Climate Fund announced by Stéphane Dion just prior to the defeat of the previous Liberal government by the Conservatives.  Under the still-born Climate Fund, the greater an entity’s emissions, the more money one could get from the government to reduce one’s emissions.  Put another way, that means that the largest emitters, such as oil and gas companies, would be the largest beneficiaries of a “pay the biggest polluters the most dollars fund” – a sharp and perverse contrast with “the biggest polluters pay more model”.  While this may make the fossil fuel companies appear to be righteous, it is an inefficient and costly way to reduce emissions.

Clean Tech funds cut

The amounts of funding for clean technologies in 2016-17 are lower when compared with the funding that was available during past Liberal governments – a period when emissions went up.

One example is that of Sustainable Development Technology Canada (SDTC), which had an average allocation of $40 million/year during past Liberal governments, while Budget 2016-17 only provides for $50 million over 5 years.

Another former Liberal government sustainable development program was Technology Early Action Measures, a program complementary to that of SDTC, which had an allocation of $56 million for the period 1999-2001.

Quebec to invest half billion in green transportationMoreover, past Liberal governments offered substantial funding for clean transportation innovation but Budget 2016-17 only calls for $56.9 million over two years, which is to be divided up to cover the development of regulations and standards, including international emission standards for the air, rail and marine sectors.  Thus, this money will only cover a handful of clean transportation projects.

This has all the appearances of a shell game.

With Canada’s share of global clean tech markets at just 1.3% while the green economy is advancing at a extraordinary pace, it is clear that Trudeau and his Liberals have a poor sense of priorities aligned with traditional centres of power and money.

Where are the green infrastructure funds?

The “all of the above”, positives-and-negatives modus operandi that is the Liberal trademark, is very prominent in the Liberal plan for infrastructure.  While Budget 2016-17 funding to support public transit is a strong positive, Trudeau has let it be known that the provinces and municipalities will define the projects for federal support. In other words, urban sprawl-related highways and bridges will also be eligible for this Santa Claus re-election fund, thereby undermining gains made on reducing GHGs attributable to public transit projects.

Low credibility, contradictions and manipulation

Further to the above weak links in the Trudeau climate plan, consider the following:

1) Trudeau has said that opposition to Keystone XL and Energy East is not based on science

2) Trudeau had praised Alison Redford for her boasting of Canada’s environmental record as a means to warm up the Obama administration to approve Keystone XL

3) The Investor State Dispute Settlement provision of the Trans Pacific Partnership would allow corporations to sue a national government like ours in the event domestic environmental laws impede the maximization of profits. Despite this, cross-country Liberal consultations on the TPP have been primarily with highly restricted audiences, little advance notice and no answering of tough questions.

As progressive Canadians, we must rise above the hype of the Trudeau government on climate, recognize that the Leap Manifesto is out-of-date and needlessly inflammatory, and focus on the urgent requirement for  Canada to catch up with its competitors on green economics – the better economic development model, yielding 6 to 8 times more jobs per government investment unit than does the traditional economy.

A combination of solutions

There is no magic solution for achieving climate goals, rather it is like addressing poverty: One needs a combination of measures that collectively contribute to goals pursued. With so many countries ahead of Canada, there is a wealth of examples from other countries to draw upon, such as:

1) A legislative agenda with meaningful penalties for non-compliance

2) Shifting some of the $46B/year in Canadian fossil fuel subsidies to investments in clean tech, training fossil fuel workers for green jobs, and creating a more-diversified and less-vulnerable Western Canadian economy

3) Engaging the Business Development Bank of Canada and other financing arms of the federal government to establish clean technology programs, coupled with a meaningful green bond programs

4) Building networks of research centres for clean technologies that cultivate public-private partnerships, plus a national clean technology integration centre that links clean energy, low carbon buildings and clean transportation – the US National Renewable Energy Laboratory is one great model for this

5) Supporting clean technology product development and manufacturing, including Quebec’s electric vehicle sector

6)  Initiatives comparable to those of China and California for encouraging a rapid migration to low and zero emission vehicles

The above is simply brief illustration that a meaningful strategy on climate change and a migration to a green economy is possible if there is a will to do so.

For a more detailed analysis of the myths and realities of the Trudeau government’s energy policies, check out this report.

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90% of world’s new electricity coming from renewables: Welcome to the end of the fossil fuel era

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Solar installation class (Haggerston Community College/Flickr CC licence)
Solar installation class (Haggerston Community College/Flickr CC licence)

According to the International Energy Agency, a staggering 90% of all new electrical capacity brought online around the world in 2015 came in the form of renewable energy. That same year, China invested a record $110 Billion in clean tech – virtually 100% of its electrical capital – and in 2016, it’s set to close 1,000 coal mines. While Canada is shedding fossil fuel jobs like they’re going out of style, the world’s current economic powerhouses – China, the US, Germany, Brazil, Korea – are generating millions of new green jobs.

In other words, the bust we’re witnessing in Fort McMurray and North Dakota is no mere blip – no typical, “cyclical” downturn. Common Sense Canadian contributor and retired federal government energy innovation expert Will Dubitsky, who has been tracking and publishing these figures here for several years now and whom I draw on extensively for this article, put it to me in the following terms:

[quote]We don’t expect a return in the blacksmith business. At some point, it was simply replaced by more modern tools and trades.[/quote]

Statistics don’t have feelings

Bank of England's Carney- Most fossil fuel reserves shouldn't be burned
Mark Carney in Davos, Switzerland, 2010 (Photo: Wikipedia)

Even if you dismiss the extraordinary economic opportunities emerging in the clean tech sector, the mounting costs and existential threat of climate change are proving impossible for global leaders to ignore, as Paris demonstrated. People at the very core of the so-called “establishment” – from Mark Carney, Governor of the Bank of England to BP Chief Economist Spencer Dale, now acknowledge that most fossil fuel reserves will have to be left in the ground.

Based on all the available research today – and we have reams of it in our Renewable Energy section – the fossil fuel era is rapidly drawing to a close.

And here’s the cold, hard truth: Statistics and facts don’t care whether you’re a bleeding-heart tree-hugger or dyed-in-the-wool Alberta conservative. They don’t care how badly you need your old job or whether you feel persecuted or unappreciated by the rest of the country. They don’t care about your stock portfolio, your values, your moral compass, your grandchildren, vanishing caribou herds, wild salmon or spotted owls. And we, as a nation – as citizens, employers, employees, parents, youth, pensioners, taxpayers and voters must decide whether we wish to embrace these new realities or bury our heads in the sand – a particular bitumen-laden variety.

Leaping in circles

Canada’s political parties, provincial and federal, are all grappling with these realities in their own, interesting ways – a spectacle now on display from coast to coast to coast.

The NDP’s gong show of a recent federal convention is a prime example. Following his election failure last Fall, Thomas Mulcair absorbed two final nails in his coffin – both over the same issue but from completely opposite ends of the party’s political spectrum. He was too centrist for the party’s left wing, while his openness to the Lewis/Klein faction’s anti-pipeline “Leap Manifesto” angered the Rachel Notley-led provincial party in Alberta, (not to mention working the usual pundits into a tizzy over its sheer audacity, pronouncing the NDP dead upon the manifesto’s arrival). Why on earth Mulcair let the convention happen on Notley’s turf is anyone’s guess.

But Notley fully merits recrimination for her recent ultimatum on pipelines. She won’t get them through BC – even Kinder Morgan is a non-starter, which, apparently no one but we British Columbians, in the “West beyond the West”, realize. The particular blend of First Nations, court challenges, municipal government opposition, powerful coastal activists, widespread public condemnation and complete lack of economic or “jobs” case for the project means that it simply will not happen. I’m taking bets for anyone foolish enough to lay one against me. I’m already collecting on my Enbridge wagers from 5 years ago. Notley will learn soon enough.

BC or Quebec – take your pick

New Quebec government choosing fossil fuels over green jobs
Quebec Premier Philippe Couillard (Photo: facebook)

As for Energy East, well, Notley’s got another fiercely “distinct” Canadian province to contend with in the form of Quebec. Good luck with that one.

But the bigger issue is the whole “getting bitumen to tidewater” argument – i.e. that Canadian bitumen producers are getting shafted on the price for their product because of a lack of pipeline capacity and shipping opportunities. While it sounds credible enough on the surface to people who don’t know better, and it may have been true a few years ago, it no longer holds water today. Moreover, the global growth in demand for fossil fuels is flattening out, while, according to this blog from the World Economic Forum:

[quote]Petroleum consumption in the US was lower in 2014 than it was in 1997, despite the fact that the economy grew almost 50% over this period.[/quote]

In this energy climate, there simply is no argument for expanding export capacity.

Trudeau singing same tune

You can lump the Trudeau government in with Notley on this one, as it continues to advocate for many of the same projects and backs BC’s LNG pipe dream. One of these days, Justin may learn that he can’t have his cake and eat it too – but we appear to be a long way away from that today. In the meantime, he would do a lot to assuage British Columbians, First Nations and the environmental community if his cabinet declined to issue the permit now before it for the controversial Lelu Island/Petronas-led LNG project near Prince Rupert.

BC NDP flip-flops on LNG

LNG, fracking and BC's Energy future- Multi-media discussion in Victoria
BC’s LNG ship may never come in

This project and many others are the brainchild of BC Liberal Premier Christy Clark, who evidently has not received the memo on all the above realities (though we at the CSC have sent her many!). Up until recently, the John Horgan-led provincial NDP was fully on board with fracking and LNG, then it showed signs of changing its tune – a welcome development that would have gone a long way to helping it get elected in May 2017, for the first time in 16 years.

That was, alas, before Horgan flip-flopped back to the pro-LNG side, kow-towing to union pressure. Besides the obvious political, moral and scientific problems my colleague Rafe Mair addressed with this catastrophic error in judgement by Horgan, even the labour justification is plain wrong-headed. Horgan and BC Building Trades boss Tom Sigurdson clearly don’t understand that there are no jobs to be had for British Columbians in LNG. Even if a single project of 21 proposed gets built – which is looking increasingly unlikely given global crash in LNG prices and steady withdrawal of capital – the BC Liberal government has already promised many of these jobs away to China, Malaysia and India in the form of cheap, foreign temporary workers!

I laid out in these pages precisely how the NDP could successfully re-brand itself, incorporating all these insights. In short, the key to their success is the following slogan and all that goes with it: “New Democrats, New Economy.” But the chances of them getting with the program are diminishing by the day.

Notley’s dilemma

Rafe- Notley should change electoral system following Alberta NDP win
Alberta Premier Elect Rachel Notley rode to victory on a wave of progressive policies she’s now steadily abandoning (Alberta NDP facebook page)

The same logic and opportunities apply in Alberta, though it’s an even steeper hill to climb there. I appreciate the bind Ms. Notley finds herself in – which explains her backpedaling on a number of more progressive energy policies she ran on last year. Her pollsters must be telling her she’s got to make these grandiose declarations on pipelines and undercut the federal party if she has any hope of getting re-elected.

She faces an electorate that is understandably anxious about its future –  that only wants things to go back to the way they were in the good old days of $100-150 oil. It’s a scary thing not knowing how you’re going to feed your family. But things in Alberta aren’t going back to the way they were before, no matter how uncomfortable that reality is. And giving people false assurances will only make the problem worse. The only thing that can rescue the Alberta economy and bring jobs back is creating new ones – and there are real ways that can happen (more on that in a moment). Alas, for the moment. it’s easy to see how that may yet seem politically impossible to Ms. Notley.

Not all wine and roses

OK, to the skeptics who’ve gotten this far in the article, first of all, thank you for hearing me out. Second of all, you’re right about a lot of things.

You’re correct that we won’t suddenly replace fossil fuels with renewables across the board. There will necessarily be a transition period and quite possibly a place for fossil fuels in the mix for some time to come. We also won’t be able to sustain the level of growth, materialism and waste in our economy that relatively cheap, abundant fossil fuels have enabled over the past century. Some tough adjustments will need to be made there.

BC sitting on enough geothermal to power whole province, say new maps
Steam rising from the Nesjavellir Geothermal Power Station in Iceland (Photo: Gretar Ívarsson / Wikipedia)

Moreover, not all renewables are created equally – and they all have their problems. Most are not “baseload”, meaning they’re only available intermittently. The exceptions are geothermal (a huge untapped opportunity for places like BC), and large hydro dams, which aren’t clean or green for a whole host of reasons.

The solution to the intermittency issue is multi-fold. It requires building a grid with overlapping sources which fill in each other’s gaps at different times. In places like BC, Manitoba, Quebec, and a number of US states, those large dams we already have can underpin newer, non-baseload renewables. Geothermal can do the same and has for decades in San Francisco. Iceland gets more than half its electricity from it.

There are other problems with renewables though. Aggressive incentives for renewables like feed-in-tariffs have led to soaring electrical costs and energy poverty in places like Germany and Ontario, while in BC, our disastrous private “run-of-river” sham has ravaged watersheds and put BC Hydro on the brink of bankruptcy. The renewable energy sector is no more immune to greed, corruption, foolishness, and government mismanagement than the fossil fuel sector is. Anything we choose to build must be done carefully and with the public interest in mind.

Conservation is the key

The most important piece of the puzzle is conservation – the only form of energy that carries zero environmental impact or cost. The good news is we’re already doing a great job at this. Americans are using roughly the same amount of electricity in their homes today as they did at the beginning of the millennium – despite population increases, more elaborate gadgetry, and the arrival of electric cars. It’s the same story here in BC.

Things are looking up

Now for the really good news! Once we get past the denial and difficulty of letting go of everything we’ve come to take for granted, there are huge upsides to the end of the fossil fuel era. As columnist Will Dubistsky put it in these pages recently, the above developments have resulted in “an amazing decline in energy-related CO2 in both China and the US and global emissions remaining flat since 2013! What’s more, for the first time in history emissions have declined during a period of economic growth.” 

Randall Benson is a former oil sands worker who runs a successful solar company and training program (Iron & Earth)
Randall Benson is a former oil sands worker who runs a successful solar company and training program (Iron & Earth)

The message we so often get from the media and our elected leaders, particularly in Canada, is, “Sure climate change is a problem and we have to act, but we’ll get to it in 20 years.” Well, the world is already getting to it. Reducing emissions is very much achievable. So is transitioning to renewable energy, and while Canada has remained on the sidelines of the green jobs revolution thus far, there are signs that’s beginning to change.

Suncor recently announced plans to build multiple wind projects in Alberta. Meanwhile, a group of oil sands workers calling themselves Iron & Earth is pushing for resources to retool their skills for clean tech. These welders, electricians, boilermakers, pipe-fitters, carpenters, etc. are well positioned to transfer their considerable abilities towards wind, solar and geothermal. They’re calling on Rachel Notley to expand Alberta’s solar training programs to include retraining of existing electricians for solar installations. And that’s no big leap.

So, we have two choices as Canadians: 1. Accept that the end of the fossil fuel era is nigh and get on with building a new economy that puts Canadians to work in sustainable, longterm jobs; 2. Remain in denial, chasing a vanishing sector, ensuring Canadians remain out of work…and then accept that the end of the fossil fuel era.

The statistics don’t care. It will happen either way.

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The NDP's only shot at winning in BC: Embrace the NEW ECONOMY

The NDP’s only shot at winning in BC: Embrace the NEW ECONOMY

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The NDP's only shot at winning in BC: Embrace the NEW ECONOMY
BCNDP Leader John Horgan has a tough row to hoe to win the next election (BCNDP/Flickr)

The following is Damien Gillis’ rebuttal to colleague Rafe Mair’s recent piece, “By Backing LNG, the Horgan NDP lost election before it began”

I agree with my colleague Rafe Mair on most things – including his commentary that John Horgan and the NDP’s choice to back LNG has been a political disaster. The only real difference between Rafe’s and my views on the subject is that I still think they have a shot, a slim one albeit, to win next year’s provincial election. But only if they own up to their mistakes and quickly embrace a new, winning narrative.

Magic formula

That narrative is simple. It’s the only one they can win with and it’s so simple and powerful that if they pick it up, short of a Monica Lewinsky-level scandal, it will return them to government. This is it:

[quote]New Democrats, New Economy

[/quote]

Why is this the perfect slogan? It does everything the NDP needs it to. It promises an economic vision and jobs – the things people most want to hear. It contrasts them with the Liberals’ dowdy Old Economy – a shortsighted, failing vision based on fifty-year old ideas like big hydro dams and oil and gas.

It promises the single most popular and alluring of election outcomes – the very thing that brought Barack Obama, Justin Trudeau and many other usurpers to power: Change. Finally, it sets the stage for protecting the environment and the economy at the same time – the Holy Grail of Canadian politics today. I’m telling you, roll with this slogan, backed by a solid campaign, and you win.

It’s the economy, stupid

In the aftermath of the NDP’s catastrophic loss under Adrian Dix last time around, I penned a post-mortem titled, “It’s the economy, Stupid NDP” (based on American political guru James Carville’s famous slogan to that effect). I stand by every word to this day. The main points I made therein are:

  • The NDP didn’t deal with the ballot box issue of the campaign (and more often than not the key issue of all campaigns): the Economy.
  • The NDP failed to tell a compelling story, while the Liberals spun a powerful “jobs” meta-narrative. Sure, it was all bullshit, as we now see, but it worked at the time. They were going to deliver untold “prosperity” to British Columbians by building a brand new LNG industry. The NDP, by contrast, had no vision, no story to offer.

Nice guys lose elections

The latter was easy pickens. You can be a strong, respectable, principled leader and still attack your opponent wherever justified. Christy Clark and her Liberals are unpopular and vulnerable, but you have to be willing to get your knuckles a little bloody in politics. You have to be willing to draw attention to the fact that Christy Clark failed three times to get a university eduction; worse yet, that she got stripped of her student presidency and fined for cheating in a campus election at SFU – hardly irrelevant when gauging her political character today.

Christy Clark commemorating new Port Mann Bridge - as it rang in at 550% of the government's original cost estimate of $600 million (Province of BC/Flickr)
Christy Clark commemorating the new Port Mann Bridge – as it rang in at 550% of the government’s original cost estimate of $600 million (Province of BC/Flickr)

You also have to be willing to remind voters that this government has increased our real debt from $34 Billion to well over $170 Billion since it came to power – much of that owning to a whole, new category of taxpayer obligations it invented to sweep sweetheart private power contracts and PPP construction deals under the rug (that’s not even counting the likely $20 Billion tab coming if Site C gets built).

You have to be willing to say that this government couldn’t manage its way out of a wet paper bag – pointing to a pattern of more than doubling initial estimates for major capital projects like bridges, highways, transmission lines and convention centres.

You have to be willing to tick off a long list of scandals, from triple-deleted emails and healthcare firings all the way back to illegally broken teacher contracts and BC Rail (hey, if your opponents are happy to go back to the fast ferries well, two decades later, over what now seems a paltry cost overrun by comparison to today’s boondoggles, well, then, BC Rail and legislature raids are more than fair game).

All of these things are fair game – not only that, they need to be brought up, in fairness to the electorate. But I digress. Back to that winning formula: The New Economy.

A golden opportunity missed

Asian LNG prices set to tumble further
LNG is a sinking ship (Jens Schott Knudsen/Flickr)

Nearly three years ago, I began doing townhall presentations around BC on the myths of the Liberal LNG vision. Armed with the latest data from Bloomberg and respected global and local energy analysts, I predicted that the bottom would fall out of the Asian LNG market long before we got to it (I said $8/unit, where the break-even point is around $12 – today it’s fallen even below that, with predictions of $4-5 over the next year, meaning it’s impossible to make a buck at LNG).

The response I heard from NDP MLAs at the time was, “We can’t say ‘No’ to everything.”

No, you can’t. But you can say “No” to stupid ideas and “Yes” to good ones. Had the NDP picked up on this intel 3 years ago, they may have taken a political hit in the short term, but by now, a year out from the election, they’d be looking like geniuses who could shamelessly crow, “We told you so!”

Say “Yes” to good ideas

Randall Benson is a former oil sands worker who runs a successful solar company and training program (Iron & Earth)
Randall Benson is a former oil sands worker who runs a successful solar company and training program (Iron & Earth)

So, the flip-side of that coin is what you say “Yes” to. You say “Yes” to renewable energy. I don’t mean rip-off private power projects and old-school, destructive dams – rather our abundant geothermal potential, wind and solar.

You embrace a group like Iron & Earth – oil sands workers lining up to retool their skills for clean tech.

It’s no big leap for an unemployed gas pipeline welder from Fort St. John to weld wind turbine components instead, or for an oil sands electrician to wire up roof-top solar. We have the workforce – we just need to shift it from an old, shrinking economy, to a new, burgeoning one.

All around the world, except Canada, the leading industrial nations are getting it – investing tens of billions in renewable energy and reaping millions of new, green jobs. As our contributor Will Dubitsky recently noted, “according to the International Energy Agency, in 2015, an astounding 90% of all global electrical power capacity added was attributable to renewables.”  Translation: nine tenths of the market for new electricity in the world today is clean tech, not fossil fuels. Pipelines, oil sands and fracking are on the way out. Why stake your future on a losing, outmoded idea?

Get creative

You also say “Yes” to the creative economy. Vancouver now has the biggest digital effects industry in the world and a booming tech sector – driven by the great lifestyle the region has to offer and a growing cluster of skilled people and hubs of activity and resources. Mayor Gregor Robertson is embracing and nurturing this trend, while Christy Clark has shown half-hearted acknowledgement at best. In the last election, her government also ran against the film industry – which is now thriving again in today’s low-dollar environment.

Super, Natural BC

You say “Yes” to preserving and growing our $13-14 Billion Super, Natural BC tourism economy, which employs over 135,000 people vs. 10,000 at the absolute peak of our oil and gas industry – roughly 3,000 direct jobs for British Columbians in oil and gas extraction and maybe double that in additional support services. But you don’t do that by destroying our salmon runs with LNG plants, marring our coastal viewscapes with bad clearcut logging practices, oil tankers and LNG plants. You don’t attract people to “the greatest place on earth” if it no longer is “the greatest place on earth”.

Adding value

Gas industry contributes 0.01 per cent of BC revenues, few jobs
Two of the province’s surprisingly few gas workers – in BC’s Horn River Basin in 2011 (Photo: Damien Gillis)

You also say “Yes” to local, value-added manufacturing. You don’t ship raw logs to China and Japan – you turn them into high-grade wood products here first, employing thousands in the process.

We seem to have it set in our minds that we’re bound to be nothing more than hewers of wood and drawers of water – a “resource” economy – forevermore. That’s our lot in life and there’s nothing we can do about it. Balderdash. It’s that sort of self-determining crap we’ve been feeding ourselves for decades and which keeps us from moving forward.

The bottom line is this: Oil and gas contributes a scarce few jobs to this province, compared with other sectors – same goes for mining. Don’t take my word for it – check out this handy chart, put together with Stats BC figures, for this publication by Norm Farrell.

BC-jobs-by-sector

Oil and gas also contributes just 0.1% of our provincial revenues – partly because since 2008 we’ve been subsidizing the industry to the tune of a billion dollars a year in taxpayer-funded infrastructure and massive royalty credit-backs. Imagine, for a second, if we invested that kind of dough in building a renewable energy sector!

We all gotta eat

Site C review panel changes mind, asks for ALC's input on farmland
The Peace River Valley is home to some of BC’s best farmland (Damien Gillis)

Finally, you say “Yes” to feeding ourselves. That means you don’t flood or disrupt 30,000 acres of the best farmland we have left to build a $20 Billion dam we don’t need. Agriculture is not only essential to our survival – it’s also important economically.

Getting that land into production would create jobs at the same time as it saves consumers money from the rapidly escalating cost of importing half our food from drought-stricken places like California.

The NDP created the Agricultural Land Reserve – arguably its single greatest legacy. It should stand loud and proud for it now.

No more Mr. Nice Guy

John Horgan’s a smart guy. He’s a hell of a lot tougher than Adrian Dix too and I doubt he’ll make the same mistake of running a “nice guy” campaign. I’m also liking what I started hearing from him late last year, in terms of taking a tough stance against Site C Dam and rolling out a green economy platform called PowerBC. He needs to go much further on both of these points, but, hey, it’s a start.

Chances are…

That said, Rafe is correct that Horgan and the NDP have dug themselves a huge hole by failing to counter the Liberals’ disastrous LNG fib. So BC faces three possible outcomes next May:

  1. Despite all their mistakes, fibs and failings, the Liberals get back into power…again
  2. The NDP, under John Horgan, finally gets it together, embraces the “New Economy” and wins an election for the first time since cargo pants and Tevas were in fashion
  3. There is a very narrow possibility that the BC Greens, under the leadership of Elizabeth May – on the wild chance she heeds Rafe’s advice and takes over the BC party – come from nowhere and steal this election.

Based on our current trajectory, we’re headed for option 1 – which would be an unmitigated disaster for our economy and environment. But if there’s any chance of it being option 2, things have to start changing right now. The NDP can’t win by default – just because their opponents are so bad. The last election proved that in stunning fashion. Moreover, they don’t deserve to come to power, nor will they help the province unless they have the right vision and commitment to follow through on it.

They also must get their shop in order, as I noted in my post-mortem 3 years ago. The party’s back rooms need fresh blood and the various factions within the NDP must commit to working together and winning for once. This campaign cannot be the sloppy mess the last one was – they require a well-oiled machine to beat a slick political operation like that of their rivals. And all that starts at the top, with the party’s leader.

All of which means the ball is in John Horgan’s court. And nothing short of the future of the province hangs on his next move.

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Pipelines to Nowhere- Energy East, Kinder Morgan make no sense amid global green energy boom, tanking oil market

Pipelines to Nowhere: Energy East, Kinder Morgan make no sense amid global green energy boom, tanking oil market

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Pipelines to Nowhere- Energy East, Kinder Morgan make no sense amid global green energy boom, tanking oil market
Images: Lindsay G/Flickr (left), Minoru Karamatsu/Flickr (right)

Most financial analysts, economists and energy experts would have us believe that the fossil fuel sectors, and the petroleum sector in particular, are in a slump, that this is cyclical, and things will eventually normalize.  This is because their “training” is based on the assumption that the future will follow the patterns of the past.

But what if it is the economic paradigm that is changing?

Two of the largest markets for fossil fuels are electrical power generation and transportation – the latter nearly 100% dependent on petroleum.  With the former, the transition to a green economy is well-advanced, while in the case of the latter market, the signs are that a transition is imminent.

Renewables surpass fossil fuels with new installations

China's emissions drop, global cleantech boom are grounds for optimism on climate change
Chinese solar company Suntech at the Bird’s Nest stadium

Since 2013, more than half of the newly added global electrical generation capacity has been associated with the installation of renewables.  And in 2015, for the first time ever, more of  investments in renewables took place in developing countries than in developed countries – $167 Billion vs. $162 Billion.

As a consequence of this trend, according to the International Energy Agency (IEA),  in 2015, an astounding 90% of all global electrical power capacity added was attributable to renewables. 

In the US, in 2015, renewables represented 68% of new electrical generation capacity installed.

But no country is changing the energy/economic paradigm more than China, the world’s largest energy consumer.  In 2015, nearly 100% of newly installed electrical capacity in China was represented by renewables – attributable to a record of $110.5 Billion in investments for that year.

This has produced an amazing decline in energy-related CO2 in both China and the US and global emissions remaining flat since 2013! What’s more, for the first time in history emissions have declined during a period of economic growth.

China to close 1,000 coal mines as wind, solar soar

China’s total installed capacity for wind farms stood at 145 GW in 2015 and for solar farms at 28 GW in 2014.  An incredible total of 30.5 GW on new wind power capacity had been added in 2015. The solar PV sector saw  16.5 GW  added in 2015, a world record!  For 2020, the projected installed capacities for wind and solar farms stand at up to 200 GW each!

The result is China’s coal use declined for the second year in a row, approximately 3.7%, in 2015, on the heels of a 2.9% decline in 2014.  Hence, China has made the spectacular announcement that it will be closing down 1000 coal mines in 2016 and not opening any new coal mines for the next three years (2016-2019).

All this translates into China’s coal generated electricity declining 10 percentage points related to China’s total electricity supply sources since 2011, in just 4 years, from accounting for 80% of total electricity consumed to 70% in 2015.

Clean Transportation:  At the edge of transition

Why the electric automobile is for realWith respect to transportation, the indications are that we are at the edge of the transition to clean transportation.

During the first 9 months of 2015, 136,700 electric vehicles were sold in China.  As of 2016, 30% of all Government of China purchases of vehicles are to be electric.  In parallel, government bodies in Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta have committed to vehicle procurement targets of 30% electric and hybrid vehicles, as of 2016.  In 2015, Beijing restricted new vehicle registrations to electric vehicles and plug-in hybrids; and Shenzhen aimed to have more than 3,000 electric taxis, 5,000 hybrids and 1,000 electric urban transit buses on the road in 2015.

China’s overall clean transportation targets for 2020 are to have 5 million eco-vehicles on the road and a capacity to manufacture 2 million eco-vehicles/year.

Norway, California race ahead with electric vehicles

Meanwhile, in 2015 in Norway, thanks to multiple incentives, 25% of January to August new car sales were electric vehicles.

Not to be outdone, California has a target to have 1.5M zero emission vehicles (ZEVs) on its roads by 2025. It has also established stipulations for automakers that 15.4% of all vehicles sold in the state be ZEVs by 2025. Moreover, it is supporting ZEV innovation and manufacturing and has set goals for 10% of total state government light duty vehicle purchases in 2015 to be ZEVs and 25% by 2025. Finally, it is requiring that all new buildings and parking lots have the electric panel and wiring in place to accommodate electric vehicles.

And while other bus manufacturers are developing electric buses, China’s BYD is selling them, including via its manufacturing plant in Lancaster, California.  That plant recently signed a contract with the State of Washington to deliver up to 800 electric buses to that state.

E-buses can cover over 1,100 km in 24 hours

Also on e-buses, there are the Proterra electric buses, manufactured in California and South Carolina.  These e-buses can travel over 1,100 kilometres in a 24-hour period with the support quick charging points along a route, at less than 10 minutes/charge.  Another option is that of a range extender, allowing for 90 minute charges in a bus depot and, hence, fewer requirements for charges en route.  Tests conducted by the National Renewable Energy Laboratory have found these buses to be very efficient and reliable, that is, they live up to the range claims of the manufacturer.

Why fossil fuels won’t be making a comeback

This all brings us back to the following question:

[quote]Is the flattening of demand in fossil fuel markets, and oil in particular, a cyclical thing, or an omen that the energy/economic model is changing?  That is, are we in a transition to a green economics?[/quote]

Well, even BP Chief Economist Spencer DaleUBS – the world’s largest bank – and Governor of the Bank of England Mark Carney have concluded that, with the increasingly aggressive actions on climate by governments all around the globe, the fossil fuel glory era is nearing its end. This means that much of the world’s proven reserves will become stranded assets, or LIABILITIES.

Canada: Still stuck in the Old Economy

Where is Canada in all this?  We are already way behind our competitors, rating 56 among 61 nations on a 2016 Global Climate Change Performance Index.   Put another way, Canada’s share of global clean tech markets is 1.3% and falling.

To make matters worse, the ultra-conservative International Monetary Fund has estimated that fossil fuel subsidies in Canada in 2015, including indirect subsidies for health and climate change, stood at $46B USD/year.

BC Premier Christy Clark touring Petronas' operations in Malaysia (BC Govt / Flickr CC licence)
BC Premier Christy Clark touring LNG operations in Malaysia (BC Govt / Flickr CC licence)

So we have to ask ourselves, why on earth is Canada and the current federal government so committed to increasing the supply of oil on international markets via Energy East and Kinder Morgan, when all the signs are suggesting that the business model for Big Oil is collapsing?  That business model is based on strong growth in demand, which, in turn, engenders high prices and the economic viability for non-conventional energy resources, such as tar sands and shale oil and gas.

Shale oil and gas are included in the discussion here because: 1) shale wells lose around 85% of their productivity in the first three years, thus requiring constant heavy investments in new wells 2) in January, 2015, the US shale sector was running up $200B in debt and 3) current indicators are such that up to half of the US shale companies may soon be facing bankruptcy.

Yet, according to a March 15, 2016 article in Le Devoir by Alexandre Shields, 30% of the Energy East capacity will be used to transport North Dakota shale oil via Canada for export to the US East Coast.  This reinforces the premise that Energy East is not economically viable.

Canada missing out on Green Jobs

Solar already beating coal on job creation, energy costIt is estimated that there are 6 to 8 times more jobs per government unit of investment in green sectors, when compared with government investments in the traditional economy.

In 2014, there were 371,000 jobs and 1.2 million jobs in the German and EU renewables sectors respectively and 3.5 million in EU green sectors at-large.

China, the world’s most aggressive country on the green economy, had 1.9 million jobs in their solar electricity and solar heating/cooling sectors in 2014 and 356,000 in their wind sector.

Seizing the opportunities

But wait a second – federal and provincial governments are not even providing adequate support even when a clean tech sector emerges!

A case in point is that Quebec has a significant critical mass regarding the electric vehicle sector, with two battery manufacturers, two charging station manufacturers, a developer of an electric motor wheel developed in Quebec but manufactured under license in China, and an electric bus under development.

And yet, we learn from Fiat Chrysler Automobile’s CEO, Sergio Marchionne, that he worries about the arrival of electric vehicles because the last bastion that the automakers fully control, from design and manufacturing to final assembly, pertains to the internal combustion engine (ICE) and its powertrain.  A shift to electric vehicles would mean this last bastion would become new entry points for outsourcing or outside suppliers.

Reallocating fossil fuel subsidies to green energy

Then there is the matter I alluded to earlier – namely that all Canadians are subsidizing the fossil fuel sectors to the tune of $46B/year in 2015 US dollars.

What we should be asking of the federal and provincial governments concerned, is this:  How can fossil subsidies be reallocated to foster diversification of the fossil fuel industries so that clean tech investment, as a percentage of total corporate-specific investments, becomes significant and increasingly so over time?

On this point, Norway’s Statoil is showing the way.  Its new CEO is from its renewable energy division; the company recently approved low carbon/renewable technologies as one of its 3 principal thrusts, while Statoil has assigned more ambitious goals for its renewables division.  Subsequently, a short while ago, Statoil set up Statoil Energy Ventures to invest in clean tech start-ups.

Dong energy aims for 85% renewables

An offshore wind installation in Denmark (United Nations Photo/Flickr)
Danish offshore wind power (United Nations Photo/Flickr)

Another model is this vein is Denmark’s Dong Energy, 60% owned by the Danish Pension Fund, which plans to shift from around 85% of its investments in fossil fuels and 15% in clean energy to the reverse of this ratio by 2040. Dong is the world’s largest investor in offshore wind.

Finally, diversified energy companies headquartered in the West can do more than just develop local infrastructure in their respective regions. Rather, they can become key players in the global market by bringing together clean tech expertise from across Canada. This would include economic diversification, the participation of stakeholders previously not involved in the clean tech, high job creation/growth areas.  And often, it means the blending of different fields of expertise that brings about world leadership.

More generally, it is clear that Canada, to be competitive, should be focusing on clean tech at large and not just on clean energy.

Canada at a crossroads

More fundamentally, it time to face the music and recognize that Energy East and Kinder Morgan are white (or, more appropriately, “black”) elephants. This means focusing on how Canada can engage in a fast-forward catch-up with its competitors on the transformation to a different economic model: Green economics.

Roadmap for Canadian transition to green economy

It is in this context that I have assembled a detailed paper on the subject – a roadmap for getting Canada up to speed on the transition to a green economy (read full paper here). This discussion document is based on models from around the globe, adapted and improved upon for “Made in Canada” applications; plus my own Government of Canada employee experience on sustainable development-related experiences in policies, legislation, programs, projects and other initiatives.

What makes this document distinct is this:

While other organizations are emphasizing why we should change and what goals we should pursue, the aforementioned discussion document specifically maps out of HOW TO MAKE THE TRANSITION TO A CANADIAN GREEN ECONOMY.  It does so by presenting broad palettes of policy/strategy options, amenable to cherry picking by stakeholders, as per their respective preferences.

No need to reinvent the wheel

Canada need not reinvent the wheel on the green transition because there is so much to learn from the successes and failures of countries far ahead of us and from our own Government of Canada empirical evidence stemming from past climate change action plans.

We don’t need to be stuck with white/black pipeline elephants.  Accordingly, I invite anyone interested to have a look at the Roadmap so that we can finally get the dialogue going on how Canada can move forward and fully participate in the high-growth, high-job creation, global green economy.

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Battery breakthroughs jump start renewable energy

Battery breakthroughs jump start renewable energy

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Battery breakthroughs jump start renewable energy
Photo courtesy of AllGrid Energy of Australia

Remote Australian communities often use diesel generators for power. They’re expensive to run and emit pollution and greenhouse gases. Even people who don’t rely entirely on generators use Australia’s power grid, which is mostly fuelled by polluting, climate-altering coal. Now, one company is showing that supplying Australia’s energy needn’t be expensive or polluting.

AllGrid Energy produces 10 kilowatt-hour solar-power batteries that take advantage of Australia’s abundant sunlight and growing demand for solar panels. Their lead-acid gel battery is less expensive than Tesla’s lithium Powerwall, also available in Australia. Many AllGrid systems are sold in indigenous communities, providing affordable energy independence.

It’s an example of the rapid pace of renewable energy development — one that clears a hurdle previously confronting many clean-energy technologies: their variable nature. One advantage of fossil fuels is that they’re both source and storage for energy; renewables such as wind and solar are only sources.

Levelling the playing field for renewables

Many argue that because solar and wind energy only work when sun shines or winds blow, and output varies according to cloud cover, wind speed and other factors, they can’t replace large “baseload” sources like coal, oil, gas and nuclear. But batteries and other energy storage methods, along with power-grid improvements, make renewables competitive with fossil fuels and nuclear power — and often better in terms of reliability, efficiency and affordability.

With right storage, renewables could replace fossil fuels

With storage and grid technologies advancing daily, renewable energy could easily and relatively quickly replace most fossil fuel–generated electricity. In Canada, Ontario’s Independent Electricity System Operator contracted five companies to test a number of storage systems, including batteries, hydrogen storage, kinetic flywheels and thermal systems that store heat in special bricks. Ontario is aiming to get about 50 per cent of its installed generating capacity from renewable sources by 2025.

The main renewable-energy storage methods are thermal, compressed air, hydrogen, pumped hydroelectric, flywheels and batteries. Some are better for large scale and some for small scale. As electric cars become more popular, their batteries could be connected to grids to supply and balance power, which could offset costs for owners. Harvard University researchers have been working on a flow battery that uses abundant, inexpensive organic compounds called quinones rather than expensive metals.

Advantages of renewables over fossil fuels

Renewable energy with storage has a number of advantages over fossil fuels. It can discharge power to the grid to meet demand more quickly and efficiently, and it’s less prone to disruption, because power sources are distributed over a large area, so if one part is knocked out by a storm, for example, other parts keep the system running. Many fossil fuel and nuclear power systems require a lot of water for cooling and so can be affected by drought, and nuclear power systems are expensive and take a long time to build. Clean-energy technology also creates more jobs than fossil fuel development.

Because renewables don’t pollute or create greenhouse gas emissions, they also help lower costs for health care and the ever-increasing impacts of climate change. Although every energy source comes with consequences, the damage and risks from mining, processing, transporting and using coal, oil, bitumen and uranium, and from fracking and other extraction methods, are far greater than for clean energy. And fossil fuels will eventually run out, becoming increasingly expensive, difficult to obtain, and ridden with conflict as scarcity grows.

US could cut CO2 from electricity by 80%

Rapid storage-technology development will place renewable sources at the forefront of the global energy mix in coming years. Many renewables are already being deployed even without storage. A recent report showed the U.S. could reduce CO2 emissions from its electricity sector by 80 per cent relative to 1990 levels within 15 years “with current technologies and without electrical storage.”

The study, by scientists from the National Oceanic and Atmospheric Administration and University of Colorado Boulder and published in Nature Climate Change, concluded that grid improvements, including a new high-voltage direct-current transmission grid, could deliver low-cost clean energy throughout the country to match supply and demand.

Still, storage offers many advantages. With the urgent need to cut greenhouse gas emissions, governments need to provide incentives for rapid renewable energy development and deployment. Considering how quickly computer technology and other human inventions have advanced, it’s easy to see that barriers to a clean-energy shift are more political and psychological than technological.

David Suzuki is a scientist, broadcaster, author and co-founder of the David Suzuki Foundation. Written with contributions from David Suzuki Foundation Senior Editor Ian Hanington.

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