Category Archives: Renewables

Exxon disses paltry clean tech subsidies while oil industry takes Trillions from taxpayers

June 24, 2015Energy and Resources, Oil&Gas, RenewablesfeaturedWill Dubitsky

Digital composite by AZRainman (Flickr CC licence)

A recent article quoting executives from Exxon is an incredible example of the misinformation, half-truths and contempt for solutions to climate change that we continue to see from the oil and gas industry.

In response to a question about subsidies for renewables, Theodore Pirog and Robert Gardner, two top dogs at Exxon’s Corporate Strategic Planning department, had this to say:

[quote]…the government, through tax incentives, is pushing wind and solar, which cannot compete with other energy sources on a level playing field. Over the long term, government subsidies for energy production and policies that pick winners and losers in the competitive energy space are counterproductive to broadly meeting society’s needs.[/quote]

Five reasons while Exxon is full of crap

Exxon complains about the subsidies for renewables, making for an unlevel playing field where government intervenes to pick winners and losers. Furthermore, according to EXXON market prices should drive solutions. Fascinating!

1) No sector of the economy receives more subsidies than the fossil fuel sector. The IMF projected the 2015 global subsidies for fossil fuels at $5.3 Trillion/year

2) The IMF has calculated global subsidies for renewables at $120 Billion/year

3) Thanks to the Republicans and their Big Oil lobbyists, the US wind power subsidy the Production Tax Credit of 2.3 cents/kWh has expired and the Investment Tax Credit of 30% that applies to solar energy installations will expire at the end of 2016.

4) In sharp contrast with the unstable US subsidies for renewables, which undermine long term investments, US direct subsidies for the oil and gas industry amount to about $7 Billion/year. These generous allowances for the oil and gas sectors: a) go as far back as the 1890s; b) include a 1926 enacted Percentage Depletion Tax Credit that increases when the price of fuel goes up; and c) allow the industry to write off most drilling costs. Not to be outdone on archaic subsidies, based on US incentives dating back to the late 1700s, the US coal industry gets tax benefits now worth $5 Billion/year.

5) The European Wind Energy Association says that wind power can compete without subsidies if fossil fuel subsidies were to be abolished.

Big Oil business model collapsing

Exxon claims that the oil industry will have to increase production significantly, in particular from unconventional sources (eg tar sands, shale oil, offshore oil), to meet increases in global demands.

This model is based on: 1) demand for fossil fuels continuing to climb; 2) oil prices remaining high enough to justify continued investments in expensive-to-extract unconventional sources such as the tar sands, offshore and shale sources; 3) high oil prices justifying the pumping out of greater volumes of conventional oil to further increase profits; and 4) the growing concern about climate change failing to affect the bottom line.

Until recently, this business model worked like a charm, with Exxon earning $32.6B in 2013, more than any company other than Apple. Well, as it turns out, all of the above elements of the business model have hit a wall.

LNG & Fracking: Risky Business for BC — Lights out for fracking operations? (Two Island Films)

According to the US Energy Information Administration, 2015 global oil demand had originally been projected to be 103.2 million barrels/day, but this number has been adjusted to 93.1 million barrels/day, thereby undermining the viability of unconventional investments. Low prices cannot sustain the development of tar sands, shale and offshore oil.

This is translating into dangerously high debt loads, with assets being written off in the billions, thus generating a cascade of announcements of abandoned projects around the globe, putting tar sands projects on hold and pushing shale gas companies into bankruptcy. The US shale gas and oil sector now has accumulated a debt of $200 Billion!

Exxon blind to clean tech boom

Exxon sees the growth of renewables as limited because they are intermittent source of power. Here’s what’s wrong with that thinking:

1) There is massive investment all over the world in energy storage technologies and the linking of clean electricity sources to electric transportation that includes, among other things, bi-directional charging stations that can network the batteries of parked electric vehicles for additional energy storage, as required.

2) In 2011, the Chinese Development Bank committed $45B to smart grid technologies, including energy storage technologies.

The Economist: China's going green...but is it fast enough? — China is investing big in renewable energy

3) China doesn’t seem to know about the supposed limits of renewables. As I noted in an earlier article this year, “…in just 2014 China’s new installations of wind and solar capacity amounted to 34 gigawatts (GW = a billion watts) of new electrical generating capacity, bringing the total installed capacity of wind and solar energy in that country to 114.8 GW and 28 GW respectively. In other words, China’s new clean energy installations added in 2014 represent nearly 3 times BC Hydro’s entire installed capacity of 12 GW and more than 70% of the total electricity capacity of Hydro-Quebec, 46.3 GW – but China installed all of this new capacity in one year!”

4) China’s mind-boggling increasing commitments to clean energy along with its goals for clean transportation – electric vehicles in particular – is galvanizing the development of its energy storage sector, expected to quadruple by 2025 to an $8.7 Billion/year market. Transportation/electric vehicle applications are projected to represent 85% of the revenues of this market, or $7.4 Billion in 2025. Clearly China is a global leader in linking clean energy to clean transportation, with integration technologies such as energy storage being a critical component of their green economy game plan. China’s clean transportation commitments are hard to beat regarding: a) $16B for the installation of electric vehicle charging stations; b) 30% of national government vehicle purchases to be electric beginning 2016; and c) a target to manufacture 2 million eco-vehicles per year by 2020.

5) Non-hydro renewables represented 47% of new electrical generation power installed in the US in 2014 and 75% of new US installations in the first quarter of 2015.

Despite all that, here’s what Exxon’s leaders have to say on the subject:

[quote]While we believe governments will take action to address the risk of climate change, we believe a policy scenario that completely transforms the global energy system at the unprecedented rate, pace and cost needed to stabilize greenhouse gas levels as contemplated in the 2°C scenario is highly unlikely.[/quote]

Turning the corner on GHGs

Global emissions reached a plateau in 2014, largely thanks to China’s massive investments in clean energy and reduction of GHG and coal use.

We don’t have any choice but to stay within the 2 degree limit, as not doing so will lead to catastrophic climate change. The prevailing wisdom is that 80% of the world’s fossil fuel reserves must stay in the ground to prevent the catastrophic scenario. Even Mark Carney, the Governor of the Bank of England acknowledges that this reality will lead to exceptional growth of stranded assets:

[quote]A growing number of senior figures in the financial community—some of them controlling many millions of dollars worth of investment funds—have been pressing fossil fuel companies to disclose how investments would be affected if energy reserves became frozen or stranded by regulatory moves associated with tackling climate change.[/quote]

Unconventional energy is debt and risk-heavy

Exxon says that technology has found a way to increase the resource base.

This is true except the costs of unconventional sources are prohibitive. The shale oil sector’s debt is staggering and all over the globe, fossil fuel companies are abandoning their reserves, also known as stranded assets.

Using poverty to promote fossil fuels

Micro Grids - Another alternative to investment in old energy — Community micro-grids are an effective way to bring energy to poor, rural communities

Exxon feigns concern for “the approximate 1.3 billion without electricity and the approximate 2.6 billion globally who use wood or dung stoves for cooking, which can lead to fatal indoor air pollution. What if we could supply all these too with affordable energy?”

The truth is that local clean energy micro-grids are the fastest and cheapest way to bring electrical power to those who don’t have any access or insufficient access. Just as many developing countries skipped the centralized landline telephone stage to go directly to mobile phones, the developing world can skip the centralized, expensive distribution infrastructure for delivering energy to isolated communities by setting up easy-to-install community clean energy micro-grids with minimal infrastructure.

Exxon: Oil fundamentalists

The views expressed by Exxon show a total contempt for climate solutions and a fundamentalist blind faith in a need to increase oil production, even to a point of implying that this is the solution to poverty. They disregard the reasons for the decline of the Big Oil business model and the staggering debt levels associated with unconventional fossil fuels. They’re allowing greed to confuse dictate their professional outlook. Apparently that’s the Exxon way.

How Alberta NDP can get r done with green energy…seriously

May 28, 2015Energy and Resources, RenewablesfeaturedWill Dubitsky

Alberta Prermier Rachel Notley (Alberta NDP/facebook)

In her speech on election night, Rachel Notley spoke of her ambition to diversify the economy of Alberta – including the energy sector – and partner with the energy industry and federal government for a national strategy on the environment.

Is all this possible? The answer is a resounding yes!

Alberta could actually reduce emissions

First, the theoretical wind power production potential of Alberta is equivalent to all the electrical production needs of every province West of Québec.

Second, the potential for wind power to reduce Alberta’s emissions is especially significant in that fossil fuels represent the lion’s share of energy sources consumed for electricity production in the province.

Coal represents 6,258 megawatts (MW), 42% of the electrical power generation sources in the province – and 40% of total electricity use if one takes into account 1,200 MW of imported electricity – out of a total of 15,798 MW produced to meet Alberta’s needs.

Natural gas accounts for 5,812 MW or 40% of the electricity produced in the province and 37% of the total provincial consumption of electricity.

US coal consumption waning

In the larger context of global trends, while global wind energy capacity is growing at 20%/year and solar energy at 50%/year over the past 10 to 15 years, US coal consumption has declined 21% between 2007 and 2014. In the last 5 years more than one third of the US coal-fired generating plants have either closed down or have been the object of announcements of closures to come. This trend will accelerate for the purposes of complying with US Environmental Protection Agency requirements to reduce CO2 emissions from the electrical power plant sector by 30% by 2030 over 2005 levels.

China leads the way

And then there is the astounding example of the world’s largest energy and coal consumer, China, which uses more coal than the rest of the world combined. China, which is now by far the world’s largest investor in clean energy technologies – with 1.58 million jobs in its solar energy sector and 356,000 working in its wind sector – saw it’s coal consumption decline in 2014!

Surely, if the world’s largest consumers of coal are reducing their use of this energy source, it may be time for Alberta to get in-step with the world leaders and acquire a more positive international energy profile.

Working with the oil and gas industry

To make the shift to clean electricity happen, the petroleum sector could play an important role.

Specifically, in the event that the new Notley government and energy sector engage in a joint review of fiscal and policy options, a strategy could be developed to facilitate energy diversification among the fossil fuel sectors to become bigger players in the clean energy fields. Indeed, there are already models for doing so.

The new CEO of Norway’s Statoil, Eldar Sætre, a man with a Statoil renewables background, recently announced that the company will be putting a new emphasis on renewables and low carbon activities. To this end, Statoil has set up a new division, New Energy Solutions. To quote the new CEO, “We will strengthen our efforts in the transition to a low carbon society,” making this new thrust one of the three pillars of the company’s strategy.

Also worth noting, Dong Energy, which is 60% owned by the Danish Pension Fund and is the world’s largest investor in offshore wind farms, has a target to shift from 85% fossil investments and 15% in renewable energy, to reversing this ratio by 2040.

Growing green jobs

Equally important, Notley can go beyond home grown clean energy production to include job creation and economic diversification in the province’s energy manufacturing sector.

This could be achieved with the right policy environment for clean energy projects – such as local manufacturing content stipulations in exchange for wind farm contracts and/or financing, as per the Québec and Brazilian models – and possibly including additional incentives for some oil technology firms to become part of a local clean tech supply chain. In short, there may be opportunities for Alberta to manufacture and export clean technologies, as well as produce clean energy for local use.

Brazil becomes green power player

This is not that far outside of the box. A case in point is that of Brazil’s WEG, a new entry into the wind turbine manufacturing sector, thanks to Brazil’s incrementally increasing local content rules for wind power projects, which will reach 60% by January 2016.

These Brazilian domestic content requirements – applied under an auction process that is managed and favourably financed to about 60% to 65% of projects’ value by the country’s business development bank – have given rise to WEG diversifying into the business of developing its own wind turbines. Now, what makes this interesting is WEG is a Brazilian home-grown domestic technology supplier that has traditionally served the oil, gas, industrial and power sectors.

WEG has already started making a first turbine prototype and plans to launch its 3.3 MW model in 2017. Working with local suppliers and testing their components, WEG expects to achieve 80% local content and include technologies specifically designed for Brazil’s tropical and sub-tropical temperatures. WEG relies on its local R & D capacity to turn out designs more in-tune with local environments. The company also plans to export its technologies to Latin America and Africa.

Applying the WEG model to Alberta, suppliers there would design components suited to a colder climate and export their products to northern regions.

A “win-wind” model for Alberta

All of the aforementioned considerations could be among the starting points for Alberta participation in a national strategy on the environment, and a provincial policy on economic and energy diversification, as per Notley’s goals. In the words of the late Jack Layton, “Don’t let them tell you it can’t be done!”

China’s emissions drop, global Cleantech boom are grounds for optimism on climate change

April 19, 2015Carbon Tax - Cap and Trade, Climate Change, Energy and Resources, RenewablesfeaturedWill Dubitsky

Chinese solar company Suntech at the Bird's Nest stadium — Chinese solar company Suntech at the Bird’s Nest stadium

Despite Canada’s total lack of leadership in the green economy, a number of key global developments are grounds for optimism heading into the Paris UN conference on climate change.

Global emissions plateau in 2014

In a pleasant surprise for the planet at large, according to the International Energy Agency, global emissions reached a plateau in 2014.

Most importantly, this is not a onetime aberration, but rather an indication that the cumulative impacts of the growing numbers of measures to address climate change in China, Europe and the US are collectively bringing about transformative change. Other key nations such as Japan, India and Brazil have also begun a process that will engender a transformative migration to a green economy.

Particularly encouraging is that in 2014, the CO2 emissions of China – the world’s largest energy consumer – declined for the first time this century, by 0.7%. Behind this incredible achievement, China’s 2014 coal consumption fell by 2.9%, while coal imports declined 15%. This is not a lot, but very significant in that the China has long been associated with rapidly rising emission levels.

Accordingly, China is in the process of changing the global economic/energy paradigm.

China’s race towards a Green Economy

As mentioned in the Common Sense Canadian article “Fossil Fuel Era drawing to a Close…except in Canada“, with the cost of renewables declining, long-term investment cycles of 20 to 25 years already favour renewables. As a result, since 2013, renewables have overtaken conventional fuels in new electrical generation installations and the nuclear sector is reaching something close to a free fall, with plant closures and little interest in refurbishing facilities at the end of their respective active cycles.

A case in point: in just 2014 China’s new installations of wind and solar capacity amounted to 34 gigawatts (GW – a billion watts) of new electrical generating capacity, bringing the total installed capacity of wind and solar energy in that country to 114.8 GW and 28 GW respectively. In other words, China’s new clean energy installations added in 2014 represent nearly 3 times BC Hydro’s entire installed capacity of 12 GW and more than 70% of the total electricity capacity of Hydro-Quebec, 46.3 GW – but China installed all of this new capacity in one year!

As to what all this means in terms of jobs, China has staggering employment numbers for 2014 in its solar PV and wind energy sectors, 1.58 million and 356,000 jobs respectively!

Wind and solar projections boosted

And China promises to do even better in 2015. So optimistic is China on accelerating the pace of new installations of renewables that its National Energy Administration has raised its target for new solar installations in 2015 to 17.8 GW, up from the original target of 15 GW.

Projections for China’s new wind installations in 2015 are such that as much as 20 GW of capacity may be added.

That said, there may be caveat to China’s impressive clean energy projections in that it is not sure if past trends will continue with respect to increases in transmission capacity, lagging behind new wind and solar farm developments.

Regardless, the aforementioned aggressive clean energy initiatives are part of a multifaceted Chinese government war on coal. With respect to this war, as per the US-China climate agreement, China has set targets to the effect that by 2030: 1) 20% of that country’s total energy consumption will come from renewable sources and 2) carbon emissions will be capped. China is also expected to introduce a national cap and trade system in 2016, for the beginning of the country’s next 5 year plan.

Europe: excellent performance on Kyoto

Meanwhile, in Europe, the EU’s original 15 nations have done better than their Kyoto Protocol 2008-2012 GHG reduction target of 8% by achieving a 13.4% reduction below 1990 levels. By way of comparison, Canadian emissions rose 18.5% during the same period.

Furthermore, not only are EU nations on track for meeting 2020 goals of a 20% reduction in emissions, 20% improvement in energy efficiency and 20% energy achieved from renewables, but in October 2014, the EU Heads of State endorsed a 40% emissions reduction target for 2030.

India works towards renewables while increasing access

Not to be outdone, the Government of India has set a target of 100 GW of solar energy and 60 GW of wind energy installations by 2022, which is especially ambitious considering that India’s current total electrical production from all sources combined is only 250 GW.

It is conceivable that India will exceed its targets as clean energy companies have spoken of total commitments of 266 GW of new renewable installations by 2022.

Equally impressive is that the aforementioned goals of India will bring jobs and electricity to regions that either have no electricity or unreliable/unsteady electricity supplies. It is estimated that the solar and wind targets will generate one million and 183,000 jobs respectively, thereby providing boosts to impoverished communities by addressing energy and job deficits concurrently. To-date, approximately 70,000 jobs are attributable to the country’s solar and wind sectors.

Japan: Post-Fukushima

Elsewhere in Asia, Japan’s post-Fukushima Dai-ichi nuclear crisis, which led to the shutting down of 54 nuclear plants and the scrapping of plans to build 14 new nuclear facilities, initially meant a spike in fossil fuel imports, but this was followed by a boom in the renewables sector – supported by the central government.

US #2 on Green Economy, despite Republicans

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

As for the US, one may be inclined to conclude that the Republicans have put a damper on the progress of non-hydro renewables – yet 47% of new electrical power capacity added in 2014 came from non-hydro renewables. Republicans haven’t succeeded in stopping the Obama administration from doing what it can within existing constraints.

Firstly, there is the question of what contributed to the US having become the world’s number two investor in the green economy after China. The answer begins with the 2009 to 2011 period, under the American Recovery and Reinvestment Act – when the US government laid the foundations for a green economy with a $70 Billion investment.

Today, despite US government support for wind energy being torpedoed: 1) the Investment Tax Credit for solar project development remains intact until 2016; 2) the US government, on an ongoing basis, maintains extraordinary levels of investments in clean tech innovation partnerships with the private and academic sectors; and 3) Obama recently announced a model green government procurement strategy designed to to cut federal government GHG emissions by 40% by 2025. Also worth is the National Renewable Energy Laboratory in Colorado, a veritable beehive of US clean energy global leadership.

By contrast, Canadian green tech innovators and manufacturers face an unfavourably uneven playing field for participation in the high-growth, high-job creation, competitive global green economy – by virtue of the near total absence of Government of Canada support.

Public and private banks back Green Economy

In one of my previous articles, the increasing role of public banks in the green economy was described, with references to the Chinese Development Bank, the World Bank, the European Investment Bank, Germany’s kfw, the UK Green Investment Bank and Brazil’s Banco nacional.

Now, what is new is that private banks are getting into the act, supporting the green economy with dedicated funds. Barclay’s, Bank of America Merril Lynch and Citi Bank are among the new private sector players.

Consequently, with this increasing convergence of public and private banks on green investments, it is estimated that together they will issue $100 billion in green bonds in 2015.

Clean Transportation: California and China lead the way

A solar ev charging station in San Francisco

According to a UBS study, by 2020, customer-side renewable energy production (e.g. solar roof panels), energy storage and electric vehicle charging station technologies – combined with an electric vehicle in the driveway – would offer consumers a 7% return every year with a 6 to 8 year capital payback. The payback would be greater in jurisdictions such as California, which now offers incentives for energy consumers to install combinations of these technologies on their respective properties.

For California and China, the future for zero and low emission vehicles has already arrived. Each has a long list of policies, including aggressive eco-vehicle government procurement targets, subsidies for consumers, support for manufacturing/innovation, generous funding for electric vehicle charging stations all across these jurisdictions and requirements for new/recent buildings to be designed to accommodate ev charging stations.

To this end, California aims to cut petroleum use in the transportation sector in half by 2030 and have 1.5M zero emission vehicles on the road by 2025.

China’s target calls for the domestic production of eco-vehicles reaching 2 million/year by 2020 and a cumulative total of 5 million new energy vehicles on the road by then. Also note that China’s national and regional eco-vehicle policies favour domestically manufactured vehicles.

Meanwhile, in 2016, the new US corporate average fuel economy standards will kick in, requiring that each manufacturer present in the US market achieve an average of 6.2L/100km based on cars sold in that year and 8.2L/100km for trucks. These standards, which are identical in Canada, get incrementally more stringent, reaching a mandatory average of 4.3L/100km for cars by 2025.

However, while these US vehicle standards constitute progress, appearances are somewhat deceiving for two reasons. First, the new standards will allow for the skewing of corporate average fuel economy results by leaving wiggle room in the form of fuel economy by category/size of vehicles sold (based on wheelbase length and track width). Second, the standards include higher consumption allowances for SUVs, considered to be trucks. Together, these factors could translate into higher average consumption/vehicles sold by a given manufacturer than the above-mentioned targets suggest.

The collapse of the Big Oil business model

Scientists say fracking can't fulfill America's energy needs — A Pennsylvania fracking operation

While the cumulative impacts of the climate action measures are the backdrop for the International Energy Agency numbers on the plateau in GHG emission levels in 2014, another game-changing phenomenon is also occurring: the collapse of the business model of the oil industry.

Until recently, this business model worked like a charm, with Exxon earning $32.6B in 2013, more than any company other than Apple. Well as it turns out, all of the above elements of the business model have hit a wall.

Demand not Rising at the Expected Pace

Not only do China, the US, the EU and India have policies which are lessening the current dependence on fossil fuels, but they all also have policies that will increasingly reduce this dependence. As indicated above, even India, once thought to be a major vector for increased demand in fossil fuels, has targets to change the economic/energy/job paradigm in favour of locally-produced renewable energy.

According to the US Energy Information Administration, 2015 global oil demand had originally been projected to be 103.2 million barrels/day, but this number has been adjusted to 93.1 million barrels/day, thereby undermining the viability of unconventional investments. True, economic slowdowns are also affecting demand, but the shift to clean energy and eventually clean transportation can only increase with time.

Evidently, global actions on climate change are starting to have an impact on Big Oil’s bottom line.

Low oil prices lead to stranded assets, dangerous debt

It now appears that the price of oil might not rise for a long time to come. Low prices cannot sustain the development of tar sands, shale and offshore oil.

This is translating into dangerously high debt loads, with assets being written off in the billions, thus generating a cascade of announcements of abandoned projects around the globe, putting tar sands projects on hold and pushing shale gas companies into bankruptcy. The US shale gas and oil sector now has accumulated a debt of $200B!

Oilmart- Low, low prices! — By Lorne Craig

How long can this last?

As for the Big Oil premise that concern about climate change would not translate into social change, it requires an extraordinary amount of denial to ignore the emerging paradigm change entailing: 1) the decline in growth of fossil fuels; and 2) political trends favouring more stringent policies in support of the green economy.

Collectively, these factors offer grounds for optimism and hope. And the evidence presented here is only the the tip of the iceberg. Indeed, there are now more than 100 countries that have adopted a target for 2050 to achieve zero net GHG emissions.

What we are seeing is an alignment of the stars which could well lead to real progress on climate change at the upcoming UN conference on climate change in Paris in December 2015.

But in Canada…

Meanwhile, back home, Trudeau and Harper remain wedded to the resource-based export economy, with trade deals to support this dated economic development paradigm. This while our potential customers for increased resource exports are working hard on reducing their fossil fuel dependencies.

Alberta Premier Jim Prentice meets with Quebec Premier Philippe Couillard to salvage the proposed EnergyEast pipeline.

On the provincial front, Ontario and Quebec’s participation in the cap and trade (C&T) Western Climate Initiative (WCI), along with California, is helpful, but is also purposely a smoke screen. This is to say that these standalone measures are equivalent to suggesting that one can end poverty with a single policy item. The same can be said of BC’s carbon tax.

In effect, what both BC and Quebec have in common is that their current governments are committed to a resource economy, and are totally indifferent to and/or ignorant of the green economy model. Yet, on a global scale, the green economy is currently, and will be, offering the best economic development strategies of our time, as measured in both jobs and economic growth.

To this effect, Quebec is cutting all the environmental impact corners and investing large sums of public funds to sort out the potential of – and requirements for – the development and commercialization of shale gas and oil, plus offshore oil. This despite the aforementioned $200 billion in debt of the US shale sector and, more generally, the demise of the Big Oil business model.

And while Quebec is applying the above-described devious formula for the “reconciliation” of the environment and the economy, it is abandoning its nascent electric vehicle sector.

BC, for its part, is singularly focused on building outrageously expensive LNG facilities to serve export markets and is justifying the Site C dam for powering these energy-intensive LNG projects. What is amazing here is that BC Hydro’s own analysis indicates that wind power is the lowest-cost option.

Quite the contrast with the third C&T participant, California, with its hefty sets of policy packages to migrate California to a green economy. Even a partial list of the state’s policies on zero-emission vehicles is incredibly long!

What is wrong with this picture?

Fossil fuel era drawing to a close…except in Canada

February 17, 2015Economics, Energy and Resources, Oil&Gas, RenewablesfeaturedWill Dubitsky

The following is the sequel to an earlier story by Will Dubitsky on the growing green economy and Canada’s failure to take advantage of it.

In the first part of this story for The Common Sense Canadian, I discussed how Canadian and Quebec leaders are largely ignoring the potential of high job creation, high growth green sectors, while China, Europe and the US are showing real leadership. Here, I will dig deeper into the policies and organizations that are foolishly banking on the Canadian resource-based economy as the key to economic development. Sadly, while President Obama sits poised to veto the Keystone XL pipeline, signalling the accelerating transition into a new era, Canada is being left behind.

Up to a trillion dollars in stranded fossil fuel investments

In keeping with Einstein’s definition of insanity, nearly all the economic experts will tell you we must keep doing the same thing over and over again and expect different results. Yet the signs are that the fossil fuel era is approaching its demise.

First, long-term energy and energy-related investments already favour the green economy – largely because the costs of clean tech are coming down.

Second, in the Summer of 2014, long before the recent plunge in oil prices, it became apparent that unconventional resources such as the tar sands, shale and offshore oil cannot be supported by market prices. As a result, Big Oil has already started to withdraw from major unconventional investments around the globe, otherwise known as stranded assets. This trend is becoming more and more evident .

The growing order of magnitude of stranded fossil fuel investments are very telling. Of the$2 Trillion invested in oil development in 2014, $930 Billion may never reach the return on investment stage – the makings of an investment bubble.

Considering the 20% return on equity for oil and gas in 2008 and the projection of a mere 5% return for 2015, it would appear that the most of the financial community has got it all wrong – especially when you factor in the increased volumes of stranded assets to come with oil at less than $70/barrel.

Unfortunately, financial institutions are not as diversified as they claim to be, totally bypassing the high growth, high job creation green sectors while maintaining the resource economy as integral to the majority of investment products/strategies.

Doubling down on unconventional energy

Meanwhile, Goldman Sachs has warned that the oil companies’ capital expenditures for investments in unconventional resources have “gone through the roof” and that their Reserve Replacement Ratio, the measure which investors use to rate oil companies, is not encouraging. (New Internationalist, November 2014)

Similarly, a UBS study concluded that the rapid decline in the costs of clean energy, clean transportation and green economy integration technologies – such as energy storage technologies – together suggest that the writing is on the wall for fossil fuels and point to a full-scale shift to a green economy by 2020. (Ibid)

Leaving it in the ground

This is about more than economics though. Governments around the globe are adopting strong climate policies which favour the green economy, acknowledging that 80% of fossil fuels must remain in the ground to avoid catastrophic climate change. That means that of the 12,000 gigatonnes of fossil fuel reserves, only 936 gigatonnes can be used.

$26.4 Billion/yr in subsidies to Canadian fossil fuels: IMF

Another issue is the fact that fossil fuels remain one of the most heavily subsidized sectors in the global economy. According to the International Monetary Fund, in US 2011 dollars, Canada spends $26.4B/year in direct and indirect subsidies (including health, climate change costs, etc.) for its fossil fuel sectors. This means that the unraveling of short-term thinking on fossil fuels will accelerate over time as the international community increasingly engages in addressing climate change. Put another way, the idea of shifting subsidies away from fossil fuels to the green economy will become increasingly attractive for policy makers.

Oddly enough, the representatives of the fossil sectors complain about subsidies for clean energy. The response of the European Wind Energy Association is that the wind sector could compete without any subsidies if it weren’t for the subsidies fossil fuels receive.

Renewables lead new energy mix

In the US, wind energy is now cost competitive with natural gas. Indeed, the change in the US energy paradigm is now well-entrenched, with renewables representing 47% of new electrical generation capacity installed in 2014, natural gas at 50% and coal, nuclear and oil combined only accounting for a little over 2%.

Consequently, from an investment perspective, clean technologies are the safer bet, free of the fluctuating, speculative prices we see with fossil fuels and destined to be favoured by increasingly aggressive government policies, further driving down prices.

Yet in Canada, only the NDP has committed to end fossil fuel subsidies, transfer the savings to clean technologies and introduce a cap and trade system.

NEB locking us into yesterday’s economy

As a result of the Harper administration’s changes to legislation on environmental impact analyses, the National Energy Board does not have the mandate to consider the biggest issue among all issues associated with TransCanada’s Energy East and other pipeline proposals – that is, the emissions stemming from tar sands development and downstream consumption of these fossil fuel products.

Compounding the limitations of the NEB mandate, the regulator has an “attitude problem”. This is very evident from the NEB’s rejection of oral cross-examination regarding certain types of questions, such as those submitted by distinguished energy expert Marc Eliesen on Kinder Morgan’s TransMountain pipeline expansion proposal.

Marc Eliesen is a former CEO of BC Hydro and Chair of Manitoba Hydro and served as a deputy minister in seven different federal and provincial governments. Since the NEB did not see it as necessary for TransMountain to address most of Marc Eliesen’s written questions, he withdrew as an intervenor/participant in theNEB Kinder Morgan review circus.

One can expect more of the same for the NEB hearings on Energy East.

Changing our laws to suit oil and gas

Just as it restricted the NEB’s environmental review mandate, the Harper government gutted the habitat protections in the Fisheries Act, at the request of Canada’s pipeline industry.

Harper has also ensured that the NEB reports directly to the Prime Minister’s office.

In other words, Canada is painting itself into a corner.

Both Justin Trudeau and Harper view Canada as a resource export economy and both revert to the denial of science to increase Canada’s dependence on resource exports.

The new energy paradigm

As alluded to my Jan 23, 2015 Common Sense Canadian article, yesterday’s economists, Harper and Trudeau and most of mainstream media, much like the climate change deniers would like us all to believe in a fairly tale that presents economic and environmental considerations as opposing forces for which there is a need for reconciliation.

This economy versus the environment spin is comparable to the debate of 100 years ago on the reconciliation of woman’s rights with the need for economic development.

Yet the world’s largest energy consumer, China, is already changing the global economic-energy-environmental paradigm in through a rather schizophrenic war on coal. Consider that: 1) China is the world’s largest investor in green technologies, with $89.5B in clean energy technology projects in 2014; 2) China’s coal imports will be down by 15% by the end of 2014 compared to 2013; 3) China’s pilot cap and trade systems in Beijing and Shenzhen have reduced emissions by 4.5% and 11% respectively; 4) China is thinking of introducing a national cap and trade system in 2016.

Europe on track for big emissions reductions

Nearly all of the EU members are on track for their 2020 targets for a 20% reduction in GHGs, 20% energy from renewables and a 20% improvement in energy efficiency. Not resting on their laurels, in October 2014, the European heads of state agreed to a 40% GHG reduction target for 2030.

Then there is the incredible case of Germany, which outdid its own Kyoto Protocol objective of a 21% reduction of GHGs by 2012, having achieved a 25.5% reduction instead. But Germany is not an exception to the rule. For the same Kyoto period ending in 2012, the UK, Sweden and France reduced their emissions respectively by 23.4%, 18% and 10.5%.

At this point, Ban Ki-moon’s 2007 remarks on green economics seem highly appropriate:

[quote]We have witnessed three economic transformations in the past century. First came the Industrial Revolution, then the technology revolution, then our modern era of globalization. We stand at the threshold of another great change: the age of green economics.[/quote]

How long is it going to take for today’s economists to catch up?

Obama Keystone veto’s global ramifications

In closing, with Obama on the verge of applying his veto to Keystone, it may be helpful to read the article referred to below, which specifically deals with the matter of Keystone but could easily be recast as the case against TransCanada’s Energy East, Kinder Morgan’s TransMountain and Enbridge’s Line 9.

In a nutshell, this article in The Guardian speaks of the increased path dependencies generated by new pipelines and concludes that an Obama rejection of Keystone would be a clear signal to the US, Canada and the entire world that the time has come for putting the emphasis on developing clean energy and clean transportation alternatives – and the weaning off of our dependence on fossil fuels.

This is precisely the point President Obama made in his January 20, 2015 State of the Union speech, when he indicated that a rejection of Keystone would send a signal to the world that we must get serious about migrating to a green economy; whereas approving it would constitute a setback to the climate action agenda.

One can say “ditto” for TransCanada’s Energy East and the other major Canadian pipeline projects.

What is happening is that China, Europe, the US and other nations – not Canada – are becoming increasingly aligned for a future that functions on a green economy paradigm, the path to higher job creation, stronger economic development, avoidance of catastrophic climate change and the embracing of environmental stewardship – in other words, the path to tomorrow’s economy.

With the aforementioned science and economic considerations in mind, Mark Carney, the current Governor of the Bank of England and former Governor of the Bank of Canada, recently wrote to British Members of Parliament, advising them that the Bank’s officials are reviewing whether or not the majority of fossil reserves are burnable.

Change is clearly afoot – if only Canada’s leader could see and embrace it.

Transition away from fossil fuels needs to take care of workers

January 29, 2015Energy and Resources, Oil&Gas, RenewablesfeaturedCommon Sense Canadian

Transition away from fossil fuels needs to take care of workers — Gas workers in BC’s Horn River Basin (Photo: Damien Gillis)

By Karen Cooling, Marc Lee and Shannon Daub

The steady stream of bad news from Alberta’s oilpatch is a potent reminder of the boom-and-bust nature of being a resource-commodity exporter. It’s a story deeply understood in resource communities, as decisions made halfway around the world dictate whether you will have a job tomorrow.

The outlook for fossil fuel-exporting industries is likely to get worse if governments negotiate a new global deal to limit carbon emissions this year. On the heels of a climate deal with China, U.S. President Barack Obama stated in his State of the Union address that:

[quote]No challenge poses a greater threat to future generations than climate change.[/quote]

Leaving it in the ground

It is now recognized that anywhere from two-thirds to four-fifths of proven fossil fuel reserves worldwide must be left in the ground to avert catastrophe. Canadian politicians live in denial of these facts, pushing instead for more bitumen, coal and LNG exports.

But what does all this mean for people whose livelihoods rely on these industries? We talked with resource workers around B.C. who have experienced boom-and-bust cycles first-hand — especially in forestry. What we uncovered is a very unhappy legacy. One concern is that climate action could mean the loss of well-paying jobs and a repeat of this tragic pattern.

A “just transition”

As we plan for a transition to a zero-carbon economy, we will need to ensure a “just transition” for oil and gas workers, who should not have to pay the price of doing the right thing on climate change.

In past resource busts, families have faced extreme financial and emotional instability due to job losses. There are also ripple effects throughout the economy, as reduced spending forces the closure of small businesses and service providers, municipal government budgets collapse and the residential housing market becomes glutted with “stranded assets.”

Stable management of fossil-fuel industries over a two-or three-decade wind-down period with a just transition plan can get us off the resource roller-coaster and better serve workers, communities and the economy.

How to build a sustainable future

Much work will be required to build the zero-emission economy we need but we should embrace that. Building new, green infrastructure for the future includes investments in district energy systems, localized food systems, regional rapid transit, efficient buildings and “zero waste” management of materials — all of which can be a major economic benefit in rural and resource communities.

We also need to stop lumping in all resource sectors together. While fossil-fuel industries are at the heart of the climate problem, there can and should be a bright future for renewable resources like forestry. With strong stewardship and enhanced value-added, forestry in B.C. could support an additional 20,000 good permanent jobs — far more than will arise from any LNG development. This means reversing direction on forestry policies that have gutted the industry and its connection to supporting communities.

forestry vs. oil and gas jobs — Graphic by Norm Farrell

A “Green Social Contract”

A coherent, managed approach would also allow for planned transitions for workers that include income supports, skills training and apprenticeships. This means investing in skills that are transferable from carbon-intensive to green industries. Proactive planning and collaboration across government, industry and unions is critical for ensuring a just transition.

This new “green social contract” will require a reallocation of financial resources. We recommend creating a just transition fund out of resource royalties or carbon tax revenues. The fund could enhance income security for workers, support early retirement initiatives for some and help people through retraining and job search processes.

Rather than trying to cultivate the next boom (think LNG), our aspirations should be to develop a high-quality, full-employment strategy that supports workers, families and communities to transition beyond fossil fuels.

Karen Cooling is a former representative with the Communications, Energy and Paperworkers’ Union. Marc Lee and Shannon Daub are with the Canadian Centre for Policy Alternatives. This piece draws on a new study, Just Transition: Creating a Green Social Contract for BC’s Resource Workers.

Canada, Quebec’s political leaders blind to green jobs revolution

January 23, 2015Economics, Energy and Resources, Pipelines and Supertankers, RenewablesfeaturedWill Dubitsky

Part 1 of a 2-part story from innovation expert Will Dubitsky on Canada’s missed opportunity to build a prosperous green economy.

The ardent defenders of our resource economy are in no way limited to the climate skeptics who support TransCanada’s Energy East project, the Keystone XL pipeline and the tripling of Kinder Morgan’s pipeline capacity to Vancouver. There are also much larger and perhaps more influential groups of traditional resource economy supporters – the greenwashers such as Justin Trudeau, Quebec Premier Philippe Couillard, the majority of mainstream journalists, economists, Bay Streeters and more.

These stakeholders would have us believe that with a little tinkering of the status quo, we can address requirements to reduce greenhouse gases while supporting projects like TransCanada’s Energy East and the other proposed pipeline projects for Canada.

According to this line of thinking, the traditional resource-based economic paradigm is a permanent fixture of global economics. Consequently, if TransCanada’s Energy East pipeline isn’t built, another petroleum source would fill the “void”, leaving the impacts on greenhouse gases at the level of the status quo. In other words, new infrastructure to increase dour dependence on petroleum is fine, even though the International Energy Agency has said we must leave 80% of proven reserves in the ground if we are to avoid catastrophic climate change.

Green economy still ignored by many

It is rather unfortunate that the green economy paradigm – despite the facts on the ground in China, Europe and the US – remains off the radar screen of nearly all economists.

Even the very conservative International Monetary Fund, Goldman Sachs and UBS are way ahead traditional economists on the decline of the resource economy paradigm, respectively exposing: 1) the spellbinding levels of subsidization of the fossil fuel sectors; 2) the high financial risks of unconventional fossil resources, such as the tar sands; 3) the rapidly growing quantity of stranded oil assets due to the combination of high debt loads and reserves that cannot be supported by market prices; and 4) the growing aggressiveness and frequency of government action on climate change around the globe . Together, these factors are fostering the emergence of a global green economy.

Massive opportunity, huge job growth…except in Canada

The green sectors are among the fastest growing and highest job creation sectors of our times. Unfortunately, Canada is missing out on these opportunities while China, the European Union and, to a lesser extent, the US are way ahead of us.

There are 3.5 million people currently working in the green sectors in the European Union (EU), with 1.2 million in renewables. The clean energy sectors in Germany are right up there with the German auto sector in terms of job numbers, and there is a 7,000-position labour shortage in the EU wind energy sector.

At last count there were 300,000 people working in the Chinese solar energy sector and another 800,000 in its thermal solar sector. The projections for China’s wind sector are 500,000 jobs by 2020.

Meanwhile, the US had174,000 people working in the solar sector as of November 2014.

All this makes good sense, given the fact that government investments in the green economy create 6 to 8 times more jobs than the same level of investment in the extractive resource economy.

Quebec missing the boat

Though Quebec is participating in a carbon (cap and trade) market with California, current Couillard Quebec government actions are founded on a resource economy with negligible interest shown in high job creation green sectors. This is counterproductive not only for the environment but for the province’s economic development as well.

To begin, Quebec could better grow its economy and reduce its dependence on wealthier provinces by concurrently: 1) rejecting the few hundred jobs associated with Energy East; 2) reducing its dependence on petroleum from outside Quebec and thereby reducing local emissions; 3) focusing on the high job creation green sectors, including the development of Quebec’s emerging electric vehicle sector.

Quebec’s emerging EV success story

The transportation sector represents 42% of Québec’s emissions, so it’s a good place to start for tackling emissions. The good news is that not only does the province enjoy a clean energy surplus – mainly hydro – but its nascent electric vehicle (ev) sector has given rise to some promising local companies and institutions, including:

EV battery manufacturer Bolloré/Bathium
Electric motor wheel company TM4
A Nova Bus (Volvo) electric bus under development
Two manufacturers of electric vehicle charging stations – GRIDbot and ADDÉnergie
EV research centres such as the Centre National du Transport Avancé and L’Ecole de technologie supérieure

Should Québec and Canada not seize the day, it is China and the US – California in particular — that will continue to be the leaders in, and reap optimal long term benefits from, the electrification of transport.

China: Full steam ahead on clean tech

While BYD of China is already manufacturing electric buses – this includes a manufacturing plant for BYD electric buses in California – China’s central government has adopted aggressive policies to the effect that beginning 2016, 30% of all government vehicle purchases will be electric.

Meanwhile, the city of Shenzhen recently announced a cap on new vehicle sales to cut air pollution, coupled with a requirement that 20% of registrations must be electric vehicles.

China’s central government is also considering a $16 Billion program to set up charging stations across the country and it has removed the 10% purchase tax for electric and hybrid vehicles.

California leads way with EVs

In the US, California is leading the way on electric vehicles with a comprehensive plan and legislation agenda that includes financial assistance for low income residents and support for clean energy micro-grids complete with energy storage and electric vehicle charging stations. New homes and parking lots are also being required to have the electrical infrastructure in place for setting up electric vehicle charging stations.

Quebec backslides on green investment, shale oil and gas

Yet the Couillard government, much like policies of Harper and Trudeau, lives in the past tense, supporting TransCanada’s Energy East pipeline proposal while cancelling a $500 million PQ program for the electrification of transport, instead committing $450 million for an unneeded cement plant that will be fueled by petcoke – a high-carbon content fuel derived from the residues of tar sands refineries. Couillard also remains fixated on his predecessors’ Plan Nord – a large scale vision for heavy extractive industries in the province’s north.

Meanwhile, Couillard shows disturbing signs of softening Quebec’s moratorium on fracking, letting it be known that his government will not be taking action along the lines of the New York State to impose a permanent ban on shale gas development. Instead, his government appears to be keeping its options open for developing a shale oil sector on the Island of Anticosti, which the previous PQ government injected $115 million into through two equity agreements.

In addition to the high level of methane leaks from shale gas wells and risks of soil, water and air pollution, it is becoming clear from the US experience that shale gas and oil lead to boom and bust economics. Yet Couillard appears reluctant to fully cut ties with this form of development and instead seize the enormous benefits available from the green economy.

Watch for the sequel to this story next week – exploring the decline of the fossil fuel era and remarkable rise of the green economy.

Suzuki: Wind power has come a long way – Wildlife impacts improving, health issues minimal

December 12, 2014Energy and Resources, RenewablesfeaturedDr. David Suzuki

There’s no free ride when it comes to generating energy. Even the cleanest sources have environmental consequences. Materials for all power-generating facilities have to be obtained and transported, and infrastructure must be built, maintained and eventually decommissioned. Wind turbines take up space and can harm wildlife. Hydro floods agricultural land and alters water cycles.

That’s why conservation is the best way to reduce energy-consumption impacts. Reductions in energy use and investment in energy-efficiency technologies are so significant that the International Energy Agency refers to conservation as the “first fuel”.

The lesser of necessary evils

No matter how good we get at conserving, though, we’ll always need energy, so we must find ways to employ the least damaging technologies and reduce negative effects. We know the world’s preferred, and currently cheapest, method to generate power — burning fossil fuels like coal, oil and gas — is the most destructive, causing pollution, global warming and massive environmental damage during extraction, transport, refining and use. And supplies are becoming more difficult to obtain and will eventually run out.

In contrast, wind power doesn’t create pollution or global warming emissions, is affordable and will never run out. Improvements to power-generation capacity, efficiency and affordability will continue to boost its importance in the energy mix. But we must ensure turbines are installed in locations and using methods that reduce negative impacts on humans and wildlife.

Wind power has come a long way

Thanks to ongoing research and testing, wind power has come a long way in a relatively short time. Wildlife behaviour studies, along with technological improvements, have significantly reduced harm to birds and bats, and better siting has reduced impacts on other wildlife and habitat. Wind power generation is far safer for birds, bats and other animals than burning fossil fuels.

But what about wind power’s effects on humans, a key argument used by opponents? Turbines, especially older ones, can be noisy, and some people find them unsightly — although I prefer the sight of wind farms to smokestacks and smog. Many problems can be addressed by locating quieter turbines far enough from human habitation to reduce impacts.

Human health impacts negligible: Health Canada

As for health effects, a recent comprehensive Health Canada study confirms previous research: Although people report being annoyed by wind turbines, there’s no measurable association between wind turbine noise and sleep disturbance and disorders, illnesses and chronic health conditions, or stress and quality-of-life issues. A 2013 Australian report concluded people living near wind installations where anti-wind campaigns were active were more likely to report health problems, suggesting some issues may be psychological.

Health Canada says more research may be needed and we shouldn’t downplay the annoyance factor. Again, improvements in technology and proper siting will help overcome many problems. And there’s no doubt that fossil fuel development and use — from bitumen mining, deep-sea drilling, mountaintop removal and fracking to wasteful burning in single-user vehicles — are far more annoying and damaging to human health than wind power and other renewable-energy technologies.

Wind becoming more affordable, reliable

Wind energy is also becoming more affordable and reliable. Denmark gets 34 per cent of its electricity from wind and Spain 21 per cent, making wind their largest electricity source. Portugal gets more than 20 per cent, Ireland 16 and Germany nine per cent. All have much higher population densities than Canada. Overall, wind power contributes about four per cent to worldwide electricity generation.

Improvements in grid and storage technologies also mean wind and other renewable technologies are increasingly feasible and desirable, especially as costs continue to drop. Investing in wind and other renewable energy is also good for jobs and the economy and can create greater stability in energy pricing than relying on volatile fossil fuel markets.

Green jobs blossoming

Total global investment in wind energy in 2012 was more than $80 billion, creating 670,000 jobs. According to a Blue Green Canada report, investing the $1.3 billion the oil industry gets in annual federal taxpayer subsidies in renewable energy and conservation could create 18,000 to 20,000 jobs, compared to fewer than 3,000 in oil and gas. And we can’t ignore the many related cost impacts of fossil fuel development, from health-care to infrastructure.

To reduce global greenhouse gas emissions at a pace and scale that experts agree is necessary to avoid increasing catastrophic effects of global warming, we need a mix of renewable energy. Wind power will play a large role.

Written with contributions from David Suzuki Foundations Senior Editor Ian Hanington.

Clean-tech is good for the economy and environment

October 23, 2014Energy and Resources, RenewablesfeaturedDr. David Suzuki

Clean-tech is good for the economy and environment — Photo: Associated Press/ Ed Andrieski

What’s the fastest-growing sector in Canada’s economy? Given what you hear from politicians and the media, you’d be forgiven for thinking it’s the resource industry, especially extraction and export of fossil fuels like oil sands bitumen and liquefied natural gas. But we’re no longer just “hewers of wood and drawers of water” — or drillers of oil, frackers of gas and miners of coal.

Although extraction, use and export of natural resources are economically important and will remain so for some time, we’re starting to diversify. According to Ottawa-based consultants Analytica Advisors, clean technology, or clean-tech, is the country’s fastest-growing industry.

Green jobs boom

The firm’s “2014 Canadian Clean Technology Report”, found direct employment by clean-tech companies rose six per cent from 2011 to 2012, from 38,800 people to 41,000, with revenues increasing nine per cent to $11.3-billion. According to Industry Canada, mining and oil and gas sector revenues grew just 0.3 per cent in the same period, manufacturing 1.9 per cent and the construction industry 3.9 per cent.

At the current growth rate, Analytica estimates Canada’s clean-tech industry will be worth $28 billion by 2022. But with the global market expected to triple to $2.5 trillion over the next six years, Canada hasn’t come close to reaching its potential. It’s our choice to seize the opportunity. With just two per cent of the global market (matching our share of population), we could have a $50 billion clean-tech industry by 2020 — double the size of today’s aerospace industry.

Clean-tech also outshines other sectors on research and development investment, with $1 billion invested in 2012 and $5 billion from 2008 to 2012. That’s more than the combined R&D investments of natural resource industries (oil and gas extraction, mining, agriculture, forestry and fishing), and only $200 million less than the aerospace sector.

“If you look at the sum of the investments and revenues of all these companies, we have a significant industry today,” Analytica president Céline Bak told the Hill Times.

[quote]Given the growth in investments today, it will continue to be significant and can grow into an industry comparable in size to other significant industries, like aerospace for example.[/quote]

Sector powered by diversity

The clean-tech sector is broad. “These companies are working on problems that we all care about, like how to use the constant temperature from the ground under our offices buildings for heating and cooling and how to replace expensive and polluting diesel power in our remote communities with clean affordable energy or transforming greenhouse gases into stronger concrete to build greener buildings,” Bak said in a Vancouver Sun article. Clean-tech comprises about 700 companies in 10 sectors across Canada, including renewable energy, water treatment, green building and development of environmentally friendly consumer products.

Many experts argue that putting a price on carbon, through carbon taxes or cap-and-trade, is a good way to stimulate clean-tech, by targeting greenhouse gas emitters and encouraging technologies and measures aimed at energy conservation and renewables.

Canada could lose out

But we could lose out if we take the industry for granted — especially because 74 per cent of clean-tech companies here sell products and services outside Canada, with export revenues of about $5.8 billion in 2012 and 42 per cent going to markets other than the U.S. “High-performing companies are often bought by international players that take the intellectual property, manufacturing and jobs to other countries,” Bak cautioned, adding:

[quote]The world already looks to Canada for our clean technology solutions. Isn’t it time that we did too?[/quote]

And, while the federal government has strategies to track and promote the fossil fuel and aerospace industries, it has yet to do this for clean-tech.

Diversity in nature is important — ensuring ecosystems remain resilient in the face of threats. So, too, for the economy. It’s folly to rely too heavily on extracting and selling finite resources, especially those that cause pollution and contribute to climate change and other threats to the environment and human health and survival. Canada’s economic growth potential through clean energy is huge, but it needs to be given the same priority government gives other industries.

Clean-tech may not be the answer to all our problems, but it’s a sector that offers a lot of promise for our economy and environment.

Written with contributions from David Suzuki Foundation Senior Editor Ian Hanington.

BC sitting on enough geothermal to power whole province: New maps

October 8, 2014Energy and Resources, Hydropower, Renewables, WATERfeaturedCommon Sense Canadian

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)

By Erin Flegg – republished with permission from desmog.ca

At a time when B.C.’s politicians are considering flooding the Peace Valley for the Site C hydroelectric dam, a new project by the Canadian Geothermal Energy Association says the province could be sitting on a figurative gold mine of power with low environmental impact.

The project used publicly available data to produce a database of maps and supporting information that show all the areas in B.C.that have the potential to produce geothermal energy. The project reports that, using existing technology, the province could produce between 5,500 and 6,600 megawatts of power — enough to power the whole province.

Ironically, the information CanGEA used comes mainly from the oil and gas industry, which is required by law to report on things like well depth and temperature.

The tip of the iceberg?

Significantly, information is only available for 23 percent of the province, indicating that once data becomes available for the remainder of the province, the estimates for geothermal energy production should be even higher.

In addition to comprehensive data about conditions below the surface, the report also identifies areas that, based on surface characteristics, show promise. These areas are primarily in the northeast of B.C. where access via roads and other infrastructure are already in place, largely thanks to natural gas development. Factors like these diminish initial exploration costs, a primary barrier to commercial geothermal development in Canada, making it more economically viable.

Canadian Geothermal Energy Association chair Alison Thompson said the information conforms to the highest global standards for determining energy potential.

“We have over 20,000 data points. We actually have real date. These are not estimates, there is no extrapolation,” she said, adding the report and the maps will be useful to industry looking to conduct explorations for sites in B.C.

A sustainable alternative to Site C Dam

Audio: Why Site C Dam is a bad deal for taxpayers, environment — The proposed Site C Dam would flood or disrupt over 30,000 acres of prime farmland

Geothermal energy could provide an alternative to large, expensive and disruptive projects such as the proposed Site C dam, which would flood an area the size of Victoria in the Agricultural Land Reserve. The joint review panel reviewing the Site C project took the B.C.government to task for failing to heed advice to explore geothermal as an alternative to building another mega dam for 31 years.

“The low level of effort is surprising, especially if it results in a plan that involves large and possibly avoidable environmental and social costs,” the panel wrote.

Geothermal power can be build out incrementally to meet demand, rather than building one big project like the Site C dam.

A firm source of renewable energy

Geothermal power plants provide a firm source of base load power, similar to a hydro dam. Dr. Stephen Grasby, a geochemist with Natural Resources Canada, says the environmental footprint of geothermal energy is smaller than other renewable energy sources, such as wind and hydro.

[quote]For instance, the surface area required to have developments like a wind farm, that takes a large surface area and has other associated issues with things like bird kill.[/quote]

Geothermal energy requires only a well and a heat exchange system.

“Drilling is relatively low impact,” Grasby said, adding with a laugh, “Worst case scenario is you accidentally discover oil or something.”

Drilling would be controlled by the same regulations that already monitor any kind of well drilling in the province.

Canada alone in ignoring its geothermal potential

Canada is currently the only major country located along the Pacific Rim’s Ring of Fire not producing geothermal energy. A Geological Survey of Canada report recently noted that northeast B.C. has the “highest potential for immediate development of geothermal energy” anywhere in the country.

The Site C joint review panel recommended that, regardless of the decision taken on Site C, that BC Hydro establish a research and development budget for the engineering characterization of geographically diverse renewable resources, such as geothermal.

“If the senior governments were doing their job, there would be no need for this recommendation,” the panel added.

Erin Flegg is a freelance writer and journalist, and her work appears in the Vancouver Observer, Xtra West and This Magazine. She holds an MFA in creative writing from the University of British Columbia.

China’s war on coal means lots more renewable energy…and fracking

October 4, 2014Energy and Resources, Fracking, Oil&Gas, RenewablesfeaturedWill Dubitsky

China war on coal means more renewable energy...and shale gas — Shale gas is a big component of China’s future energy plans

China has declared war on coal and coal consumption is down as a result. But this coal war offers some good news, some not so good news for Canada, and some bad news, all at the same time.

China turns to clean tech, fracking

The good news pertains to: 1) China having become an unparalleled leader and investor in the global migration to a the green economy; and 2) China’s ongoing adoption of ambitious new policies and targets to accelerate this migration at a spellbinding rate.

Unfortunately, the aforementioned good news for China also has serious implications for Canada in that not only is Canada falling further and further behind China regarding the green economy, but Trudeau and Harper, via FIPA, are set on selling Canada’s resources to China while opening the doors for China to dump its clean technologies in Canada.

The bad news is that China’s war on coal has also given rise to ambitious, but environmentally reckless, development of shale gas, wrongly perceived to be a cleaner, or less environmentally harmful, alternative to coal.

The good news

I highlighted the incredible pace of China’s initiatives to go green in an article last year, China’s Chaotic Leap Forword to a Green Economy.

In a nutshell:

China has become world’s the largest investor in clean energy technologies, with $61.3B spent on renewable energy technologies in 2013 that resulted in 28 gigawatts (GW) of solar and wind capacity added in that year alone
It has awesome green job numbers, like 300,000 jobs in its solar PV sector and 800,000 jobs in the solar thermal sector
It has evolved from a domestic solar manufacturing sector that served 1% of global markets in 2004 to 50% by 2012
It has a plan for 7 pilots on cap and trade
Finally, China has laid the policy ground work for world leadership in the manufacturing and deployment of electric vehicles.

As result of these measures, the above-mentioned October 2013 Common Sense Canadian article projected that coal consumption in China would peak in 2015.

Coal use falling

China has become the global leader in clean tech

But China is going green so quickly that projections about its energy future tend to prove too conservative. As a case in point, for the first time in this century, coal consumption and coal imports in China are down.

The prediction is that this trend will continue, translating into a 15% reduction in coal imports, to less than 300M metric tonnes imported by the end of 2014. Moreover, evidence that this trend is long-term comes from the Beijing government’s announcement that it will ban coal use in 6 city districts by 2020 replace it with clean energy.

Also worth noting, China’s war on coal includes the banning of sales and imports of coal containing high quantities of ash and sulfur. The new regulation bans for sale and import coal with more than 40% ash content and 3% sulfur . This ban would effectively eliminate low heating value coal from Indonesia and coal with arsenic from Australia.

Yet, notwithstanding the extraordinary progress China has made in such a short period, it is currently working on policies that will further accelerate its migration to a green economy.

China’s next leap forward

On that note, rumours abound as to what to expect from China’s five year plan for 2015-20. This includes the possibility of China introducing a cap and trade system in 2016. China already has a pilot cap and trade system in Shenzhen, the first of seven pilots in the country.

Meanwhile, China is well-positioned to lead the world in electric vehicles (ev’s), not only now, but in the years to come. In particular:

China’s BYD is already manufacturing electric buses
China’s central government has set an objective for 30% of its vehicle purchases to be electric vehicles beginning 2016
A $16B program is under review to set up charging stations across the country
Electric and hybrid Made-in-China vehicles are now exempt from a 10% purchase tax.
As well, several regional governments are targeting for 30% of their vehicle purchases to be hybrid and electric vehicles by 2016.

Not-so-good-news for Canada

What does China’s exceptional progress and policy leadership mean for Canada, in the context of China having become the world’s largest energy consumer and, consequently, a major influence in global energy paradigms? In crude terms, Canada will have an enormous green economy gap to close, beginning in 2015, after the upcoming federal election.

It also means that Canada will have to shed the mindset that says our future economic wellbeing lies with increasing exports of fossil fuels – a mindset shared by both Harper and Trudeau.

FIPA, the Canada-China trade agreement recently ratified by the Harper administration, will only compound these problems.

That is, the US and the EU have responded to China’s highly-subsidized dumping of clean tech on global markets with the imposition of steep tariffs. But FIPA stipulates that there will be no commercial barriers associated with environmental technologies. This stipulation could seriously handicap the development of Canada’s clean tech sectors.

In short, a successful Canadian plan for a migration to a green economy must take into account China. To do otherwise would be at Canada’s peril.

China gets fracking

In collaboration with US partners, China is setting the stage to develop what may be the largest shale gas resources in the world, 1.7 times the potential of the US. With fewer than 200 wells drilled to date, China is projected to produce 1058 billion cubic feet of natural gas annually by 2020. And the environmental implications identified thus far of China’s pending shale gas boom are enormous.

First, fracking regulations in China are almost non-existent. Second fracking in China requires twice as much water than US shale gas operations because China’s gas lies deeper underground and in more complex geological formations.

This in a country with dangerously low water per capita and where land twice the size of New York City turns into desert every year.

This, in a country where fracking waste water often goes untreated.

Nevertheless, all is in place to speed up the tempo of shale gas development. Already, foreign multinationals are investing heavily in China while companies like the state-owned China National Offshore Oil Corporation (CNOOC) – the same company that bought out Nexen in Alberta – have spent $8.7B buying shares in US shale gas operations. One can suspect that this will offer Chinese firms opportunities to obtain patents on technologies; ultimately manufacture these technologies in China; and then export these very same technologies to the US at a cheaper price.

All this is going on while the US experience has taught us that that methane leaks associated from shale gas development are grossly underestimated and the potential for regulations to control these emissions are overestimated. Drilling creates fractures in surrounding rock that cement cannot completely fill, thus opening paths for the escaping of gases and liquids. Furthermore, as the cement ages, it pulls away from the surrounding rock, reducing the tightness of the seals, thereby generating greater danger for methane leaks and water and air pollution.

Will history repeat itself?

The good and bad news have been presented in this article to demonstrate the incredible ability for China to head in opposite directions – at a tremendous speed.

On one hand, China’s amazingly rapid migration to a green economy, accompanied by a reduction coal use, suggests that China will be a major vector in the global replacement of fossil fuels with clean technologies alternatives.

On the other hand, its fracking activities, while nowhere near the scale of what is happening on China’s clean technology side of the equation, raises the weakness for which China is so famous – first go full speed ahead, wait for the problems to accumulate and then engage with incredible zeal in gestures to solve the problems created by their previous mistakes.