Part 1 of a fascinating interview with Dave Collyer, who has sobering advice for Alberta oil/gas industry
“When it comes to carbon, the horse has bolted the barn.” That’s how Dave Collyer, former president of the Canadian Assoc. of Petroleum Producers, begins our interview. Collyer is a bit of a maverick in politically insular Alberta, if by maverick we mean an oil and gas guy who’s in synch with the rest of the global industry on human-caused global warming and the energy industry’s responsibility for mitigation.
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Alberta is a major oil and gas producing region, with oil output similar to Iran, whose official opposition party – with a good chance of forming government in 2019 – will only spit out the C-word (climate change) through gritted teeth. Whose supporters regularly cheer on notorious climate deniers Friends of Science. Whose energy and climate policies consist of “no” to those of the Rachel Notley NDP. And whose energy critic, Drew Barnes, describes the Wildrose Party’s role as being cheerleaders for oil and gas extraction.
Alberta oil and gas is the major financial underwriter of Wildrose and many inside the business, from CEOs on down to field staff, share its worldview.
Which is why it’s refreshing to talk to Collyer, whose worldview is more in line with Royal Dutch Shell CEO Ben Van Beurden or Saudi energy minister Khalid Al-Falih – both of whom agree that the long-run transition from fossil fuels has begun and that greenhouse gas emissions must be reduced – than Wildrose leader Brian Jean or PC leader Jason Kenney.
In this interview, Collyer explains that becoming part of the international consensus on energy and climate policy will determine if Canada continues to expand and diversify market access.
Left unsaid, but clearly implied, is that if Alberta takes a step backward in 2019, the province could lose those access opportunities.
Collyer never said this during the interview, but other sources have told me that long-term (i.e. after Donald Trump leaves the White House) there could be consequences if Alberta is offside on climate policy. Pipeline approvals can be revoked or punitive penalties can be applied by jurisdictions to which Alberta crude oil is exported, for instance.
As an Alberta oil and gas veteran, Collyer believes the health of the industry is best served by being an enthusiastic participant in the decarbonizing process kick started by the Paris Climate Accord.
Unfortunately, he is one of the few public voices in Alberta who thinks that way.
This interview was lightly edited for clarity.
Markham : Please give me your take on climate and energy policy in Canada, particularly in Alberta.
Dave : Let me start with the big picture. I think there is significant global momentum around the need to address climate change. The debate around the science is largely over, or should be over, and I think it’s an issue that as a hydrocarbon-producing province – and obviously as a hydrocarbon-producing industry – we need to pay attention.
We ignore climate change at our peril because it’s is going to influence policy, it’s going to influence technology, it’s going to influence transition over time to a cleaner, lower-carbon economy. We need to, as an oil and gas industry in Alberta, embrace the change rather than resist the change. I think that argument’s got two or three legs to it.
One, being more supportive of reasonable climate policy. I think the Alberta Climate Leadership Plan is that in almost all respects. Two, there’s a huge driver around technology innovation and the need for industry, frankly, to be accountable for the delivery on technology and improved performance. Three, deals with competitiveness. There’s real opportunity to innovate and apply technology to improve our efficiency and our carbon footprint, but at the same time to ensure that we’ve got an overall fiscal package that leaves the industry in Alberta and in Canada competitive with other oil and gas jurisdictions.
My view is that this is the direction in which the world is moving, I think Canada’s better off to get on the train rather than to resist the change that’s coming. And we need to be smart about how we do that and that’s smart in terms of how we apply technology and that’s smart in terms of how we design policy and smart in terms of how we look at competitiveness.
Markham : To what extent is your view shared in the towers in Calgary?
Dave : I think it’s mixed, Markham. As you know, there’s a number of companies that supported the Climate Leadership Plan quite visibly. There are companies who I think are very much in the same space, but in fairness, there are others that are not supportive of that agenda for various reasons and in some ways it’s become more polarized in the province rather than less, partly as a function of the current political dynamic and the efforts to unit the right and all of that because climate is part of that dialogue.
I think it’s unfortunate because I don’t think this should be a political issue; I think it’s actually a pretty fundamental public policy issue and something irrespective of ones’ political beliefs we need to get behind it.
People tend to want to line up behind one party or the other as opposed to asking, “What’s good public policy? What’s good for the industry? What’s good for Alberta in the long run?”.
Markham : I’ve interviewed Drew Barnes on this issue, we’ve seen the comments of Brian Jean and Jason Kenney. Do you think that opposition to Alberta climate policy is driven primarily by partisan politics as you say or is there a significant cohort in Alberta politics that really believes climate science is wrong and global warming is a hoax?
Dave : I think it’s heavily politicized. I think the cohort that believes climate science is a hoax is relatively small. But I do believe there’s a fairly significant group in terms of numbers and in influence that believes Canada should not get out ahead of others in respect to action on climate policy, that there’s a significant competitiveness dimension to this.
I think there’s still a tendency to Albertans in our industry to look at things through our lens as opposed to the lens of people outside Alberta. Expressing energy and climate policy views in a manner that reflects the Alberta perspective rather than trying to be responsive and address the concerns of people outside the province.
The Alberta industry wants market access – we need market diversification, West Coast access for example – and that means listening to and being responsive to people in the lower mainland of British Columbia or Ontario or Quebec.
That’s where leadership on climate policy, within reason, being more accountable for performance and delivering on our commitments around reducing GHG-intensity, become really important. That’s what people outside Alberta want to see. So, we can’t look at these issues, in my view, through a singular Alberta lens.
Alberta needs to go play offence rather than defence. And we need to play offence in the context of the perceptions and real concerns of people outside Alberta who looking in at us, as opposed to us looking out at them.
Collyer’s comments can be broken into two segments, firstly that humanity is causing climate change by burning fossil fuels, and secondly, the appropriate response of Albertans is to tax CO2 emissions and subsidize “renewable” energy. Even if mankind is causing global warming, a response to be effective has to be global. If Albertans CO2 emissions went to zero, it would have no effect if the third world continues to build coal fired electrical plants – and who can blame them, they want our standard of living – a result of low cost energy.
As well, the imposition of a CO2 tax, and its twin, the subsidization of “renewable” energy (mainly wind powered and solar) increases electrical costs causing job loss. One only has to look at Ontario’s financial fiasco, and looming bankruptcy, to see the foolishness of that policy.
Fossil fuels do have their problems, but they supply energy at the lowest cost. Until technology dethrones their use, I would rather use them than return to a horse and buggy era!
Paul, what you say was true a few years ago, but it no longer is. China stopped building coal-fired power plants, and India will probably follow next year. Renewable energy, particularly solar, has become competitive with conventional energy in most places. Ontario is an odd exception, not the rule. Renewable energy already creates more jobs than the oil industry ever will. That is because it’s a much more labor-intensive industry than oil, which is mostly capital-intensive.
Alex – “Renewable energy, particularly solar, has become competitive with conventional energy”. I so wish that was true, so we could stop subsidizing them!
“China stopped building coal-fired power plants, and India will probably follow next year”, but the facts are 57.2 % of China’s electrical generation capacity is coal (Wikipedia), and solar & wind is only 13.7 %. Both solar and wind are intermittent, requiring fossil fuel backup (or blackouts). When will China replace all of these plants?
I stand by my comments, if Alberta (and in fact all of Canada) went to zero CO2 emissions, atmospheric CO2 would still rise. Do you advocate poverty?