COP26 update: Trudeau promises world leaders he will cap oil/gas emissions “today”

UCP government is a laggard. Oil and gas sector is a laggard, oil sands companies are biggest laggards of all

It’s one thing to promise during an election campaign that Canada will cap oil and gas emissions immediately, quite another to do so at the COP26 plenary sessions in front of global leaders and international media while the world watches. The stage has been set for an epic political fight with the Alberta-based oil and gas industry and Premier Jason Kenney.

Prime Minister Justin Trudeau announced the emissions cap during the recent federal election. At the time, both environmental groups and hydrocarbon producers were mildly skeptical. But Trudeau’s recent appointment of former Greenpeace activist Steven Guilbeault as environment and climate change minister provoked a strong reaction from Kenney, who called him the “new extremist Environment Minister” in an Oct. 28 tweet.

Source: Government of Canada.

The oil and gas industry emits just under 200 megatonnes annually, the most of any sector. Hydrocarbon extraction is why Alberta, with a population of 4.5 million, has the highest greenhouse gas emissions of any province.

“We’ll cap oil and gas sector emissions today and ensure they decrease tomorrow at a pace and scale needed to reach net zero by 2050,” Trudeau told the heads of state assembled at the COP26 plenary session during his speech. “That’s no small task for a major oil and gas producing country.  It’s a big step that’s absolutely necessary.”

The Prime Minister has said the oil and gas sector’s first milestone to reduce emissions will be 2025. Suncor is the only oil sands producer promising to lower emissions by 2030, but the company isn’t optimistic it can hit a mid-decade target.

Source: Government of Canada.

“Honestly, 2025 is going to be tough,” Chief Sustainability Officer Martha Hall Findlay told Reuters. “That’s not a number we’ve used, it’s a number the feds have used.”

During his 5-minute speech, Trudeau talked about his promise to impose a carbon tax, which will reach $170 per tonne by 2030, and challenged other leaders to follow Canada’s lead:

“This is a meaningful price on pollution designed not just to make life cleaner, but also to make life more affordable and less expensive for Canadians. I call on other countries to do the same.  Just as globally we’ve agreed to a minimum corporate tax, we must work together to ensure that it is no longer free to pollute anywhere in the world.”

Several hours after Trudeau’s speech, Kenney announced $176 million to fund 16 shovel-ready projects projected to reduce provincial emissions by seven million tonnes by 2030. Oil and gas, chemicals and fertilizers, cement and concrete, forestry, agriculture, electricity, manufacturing companies will receive the money.

“Alberta continues to show leadership by using technology in practical ways to reduce emissions and combat climate change,” said the Premier.

The problem with the announcement is the problem with the UCP government’s entire approach to climate change: too little, too late.

Alberta is a laggard. The oil and gas sector is a laggard and the oil sands companies are the biggest laggards of all.

Industry squandered the leadership shown in 2014 and 2015 by the five CEOs who negotiated a secret deal to cut emissions with five environmental groups. That handshake agreement, including the 100 Mt per year oil sands emissions cap, was enshrined in then Premier Rachel Notley’s Climate Leadership Plan. Instead of building on that solid foundation, leaders dragged their feet, misjudging the acceleration of the energy transition and global leaders’ resolve to fight climate change.

Now, they are caught out. The provincial government and the industry, especially the oil sands, are behind and they will be hard pressed to catch up. Cabinet ministers, CEOs, and industry proxies are already trying to skew the narrative, pretending Alberta is actually leading, that emissions are falling, that Canada should be exporting more “clean” and environmentally-friendly hydrocarbons to help decarbonize emitters like China.

Don’t believe it.

What you’re seeing is a desperate industry scrambling to minimize the pain that will surely come its way if Trudeau follows through on his promises. The Prime Minister didn’t mean the oil and gas emissions cap will be implemented today. But he did make clear the cap is coming soon. My guess is before the end of 2021, no later than early 2022.

For an industry that prioritizes huge profits and returns to shareholders at the expense of environmental liabilities (think 37 tailings ponds containing 1.3 trillion litres of toxic waste) and emissions reductions, that thought it had until 2030 to deliver even modest cuts, the consequences of procrastinating are likely to be painful and costly. Expect political fireworks as Kenney tries to minimize the damage.

But Trudeau’s COP26 speech guarantees there will be damage.

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