Monday 23 February 2015

End Subsidies on Fossil Fuels

In 2009 Canada promised the world at the G20 that it would phase out subsidies to fossil fuels.  Over five years later we have not finished the job.  To give the Harper Government some credit, before 2009 they did announce plans to eliminate 4 major subsidies worth about $879 (according to a July 10, 2014 Pembina Report.).   Clear Federal subsidies such as ACIT (Atlantic Canada Investment Tax Credit) and ACCA (Accelerated Capital Cost Allowance) are in the process of being phased out.  But there are still about  $1.4 Billion in provincial subsidies to that sector and as defined by the World Trade Organization,
the Federal Government is still heavily subsidizing exploration and development.  The CEE (Canadian Exploration Expense), and the CDE (Canadian Development Expense) are an attempt to support the very expensive and high risk efforts of companies to explore for new reserves (for example in the Arctic). Pembina reports the value of CEE and CDE subsidies at about $711 million in 2008 based on a report by  Enviroeconomics Inc.  

This does not take into account the subsidy we are giving them by refusing to implement an aggressive, fair, equitable, and effective price on carbon that would bring the government or—with a fee and dividend approach, the people of Canada—up to another $34 billion a year.   Such a price might start as low as $10-30 per tonne and be increased over time.  ($34 billion would represent $212 per tonne and would certainly encourage people to find alternatives to fossil fuels.)

If we are going to subsidize the oil companies, we should be subsidizing them to aggressively clean up the tailings ponds in the oil sands and generally clean up their mess after themselves.  Our current fossil fuel energy strategy seems to be to try to get as much as possible out of the ground before they become stranded assets.  Some say the recent fall in oil prices is a cyclical thing.  These things just happen and oil will go up again.  I am not an economist, but as an ordinary citizen who reads and watches closely, I would like to offer a different theory.

In the energy sector there are many changes going on.  There are so many factors in play, all in change, that no one has any idea how this scenario will play out.  There is a very large and successful divestment movement led by 350.org that is having an impact on larger investors.  Recently professors at both UBC and McGill voted to have their Universities divest from fossil fuels.  More and more people are getting off oil and gas and getting on to renewable energy all around the world.  We understand we have to aggressively reduce our use of oil and gas and coal.  Will demand continue to grow?  Or is it slowing and will it start to go down?  If oil producers such as Saudi Arabia, the US fracking industry, and Alberta Oil sands as well as Russia and China all insist on increasing production the price will stay down.  If  committed energy users stay focused on reducing consumption even though oil is cheap because of the pollution current inventories will stay high and prices cheap.  The big question is -- when will EVERYONE, companies included, realize that these energy assets have become stranded assets that must be left in the ground?  

Wouldn’t it be good if our economic system supported real leadership from our oil and gas sectors to recognize the truth of what is going on around them and to stop this last grasping for the old gravy train from this industry.  As happened with the apartheid boycotts, our energy sector needs relief from the requirement to maximize profits.  The world community needs them to stop throwing good money after bad.  We must have a moratorium on drilling in the Arctic signed on to by every nation bordering the Arctic Ocean.  We don’t need any new pipelines to continue to supply our current clients in the oil and gas sector.  And we need them to clean up their mess – and not dump it off on the taxpayer to do for them after they collect on $711 million of tax deferrals, which they will not have to pay because they were unable to bring their assets to er to the market for sale.
Service stations in this country need to transform to servicing and recharging electric vehicles, and Canada needs to develop a leading edge electric auto sector.  We need tremendous research and development into state of the art storage systems for electrical energy, and computer support networks for a complex, interactive, electric grid.  

If the energy sector wants to make money by exporting energy, let them get serious about investing in our technologies and capacities in renewable energy.  We have the renewable energy capacity if we want to develop it.  As a society we need to produce and bring down the cost of geothermal technology to the point where every home can be heated using a heat pump and a solar collector – or some other equally low energy approach.  People and communities don’t have to wait for big energy to take the lead.  All over Canada people are forming energy co-ops like Solar Share in Toronto, or Ottawa Renewable Energy Co-op in Ottawa to build the energy infrastructure of the future.

And our political leaders must begin to plan for the changes that will be required in our cities in order to accommodate this rapid change.  Our lifestyles will change and our cities have to develop in such a way as to accommodate those changes.  All three levels of government will be needed to help the Canadian population change their whole system of heating homes.  We still need much more aggressive conservation and retrofit programs and they must be available to public housing as well as to the private homeowner.  We need to build food stores into every neighbourhood and not assume everyone will have a car.  We’ll be walking and biking more.  The Ecology Ottawa “complete street” program is a prototype for all cities.  And we will need a lot more public transit.

Ontario is to be congratulated for its clear, aggressive, and urgent strategy to bring Ontario into the twenty-first century based on low use of fossil fuels.  They are showing great leadership.  I hope the other provinces will come to the table with equally great strategies and that we can all learn to work together to build a strong Canadian economy in a low fossil-fuel world.  The time to build the Canada we want is now.



Monday 16 February 2015

Will CBC Report the Details on Rail Derailment?

Dear CBC News;

This morning CBC reported a rail derailment in the North, which involves a fire that has raged more than 24 hours, and an oil spill of "crude oil".  The incident is receiving very little coverage on either radio or TV and after a whole day we are still not getting more details.  Why aren't you informing the public on this spill?  Following are some of the pieces of information I am looking for in your news reporting:

  • What kind of rail cars were carrying the oil?  Are these more of the older, less safe rail cars, or are they newer, "safer" ones?
  • What were they carrying?  Was the "crude oil" conventional crude, or dilbit -- tar sands oil suspended in diluent?
  • How big was the oil spill?
  • What is the emergency response process and how long will it take to put out the fire and to begin the cleanup?
  • What are the difficulties of cleaning up such an oil spill on snow in winter temperatures?  What are the resources and plans to clean up a spill in this kind of isolated location?
  • What would be the consequences if they fail to clean it up before spring?  What water bodies are nearby that may be affected?
Be assured, Canadians do care about serious rail accidents and oil spills, including in isolated locations.  We are concerned about the safety of carrying oil out of Alberta by train.  We are as concerned for the natural environment in the North as we are in the South.  Please keep us informed.