Vol. 26, No.37 Week of September 12, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

Dueling election claims

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Canada’s governing Liberals commit to cap emissions by 45%; Conservatives by 30%

Gary Park

for Petroleum News

Canadian voters are being given two stark choices on the future of oil sands development as they prepare to cast their ballots on Sept. 20.

Prime Minister Justin Trudeau, faced with a tightening contest that could thwart his hopes of a third term in office, has pledged to impose an emissions cap on the petroleum sector.

His chief rival, Conservative leader Erin O’Toole, has stunned the industry by endorsing the revival of Enbridge’s Northern Gateway pipeline, which Trudeau cancelled in 2016.

In a new series of climate proposals, Trudeau outlined proposals to eliminate greenhouse gas emissions in the oil sands, starting in 2025 and moving in five-year increments to net-zero in 2050. His first phase would cut emissions by 45% below 2005 levels over the next nine years.

He said a Liberal government would pay for 50,000 more zero-emissions vehicle charging stations, mandating that half of all car sales be net-zero by 2030 and ensuring the electricity grid would achieve net-zero by 2035.

“The biggest concern that people have around pipelines is ‘Oh, we’re going to see oil sands expansion,’” Trudeau said. “No, we’re not. We’re not going to see an increase in emissions (from the oil sands).”

Government-owned pipeline

But questions still hover over the impact of emissions linked to the government-owned Trans Mountain pipeline, which the Trudeau administration acquired in 2018 to keep alive construction work that is designed to boost capacity on the system to 890,000 barrels per day from the current 300,000 bpd.

Although Trudeau has refused to publicly discuss that apparent conflict, he also knows Trans Mountain was a drag on his 2019 campaign, especially among green-conscious voters, especially in Quebec.

The latest Liberal policy would apply pressure to upstream companies who would - under a Trudeau administration - have to meet their first emissions target in less than five years, said Richard Masson, an executive fellow at the University of Calgary who consults with companies in the petroleum industry.

“There is great concern that the move (by Trudeau) to a ‘just transition’ is code for shutting down the oil and gas sector, rather than allowing the sector to innovate and reduce emissions, which is what needs to happen to address climate change,” he told the Globe and Mail.

Masson said that if Canada cuts the size of the petroleum industry while there is still demand for the product such strategy would only benefit other oil-producing countries.

The major focus over the next decade should be to achieve clean electricity and transportation and phasing out fossil fuels “with accountable milestones,” said Merran Smith, executive director of Clean Energy Canada.

Rolling back reduction

O’Toole was quick to fly in the face of Trudeau’s plan, defending his policy to roll back Canada’s climate reduction targets and arguing he has a credible plan to lower emissions, contrary to the Trudeau government’s failure to act on its promises during six years in power and offering nothing new in this campaign.

If elected, O’Toole said he will push the reset button on Trudeau’s proposal, returning to the previous national target of lowering emissions by 30% below 2005 levels by 2030, giving Canada the room to balance environmental action and a strong economy.

His one commitment that caught pro-petroleum factions off guard was his promise to restart work the Northern Gateway system to deliver 525,000 bpd of crude bitumen to the British Columbia coast near Prince Rupert for export to Asia and importing on a separate line 193,000 bpd of condensate for blending with bitumen to improve pipeline flow.

O’Toole said Northern Gateway would provide economic opportunities for Indigenous communities along its 735-mile right of way by offering them the chance for 33% ownership.

“I would like to see a transfer of wealth (to First Nations) and opportunity after generations of trauma transfer,” he said.

The Conservatives also said they would repeal Bill C-48, which has imposed a moratorium on oil tanker traffic off the northern B.C. coast.

Enbridge and the British Columbia government said they would not comment on promises made during an election campaign.

O’Toole said “pipelines in Western Canada (such as Trans Mountain and Northern Gateway) are important. We need to re-establish the confidence of Western Canadians in our country. After six years of Trudeau all we have is greater division in our country.”

He said that once a Conservative government achieved its 2030 target for carbon emissions “then we can work on ambitions” past that level but was emphatic that he wants a “made-in-Canada solution for net zero by 2050.”

The Conservatives have startled Canadians by edging ahead in the polls, but the margin is so slim that it’s viewed as far from conclusive

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