THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Thursday, March 23, 2023
The Standing Senate Committee on Energy, the Environment and Natural Resources met with videoconference this day at 9:01 a.m. [ET] to study emerging issues related to the committee’s mandate.
Senator Rosa Galvez (Chair) in the chair.
[English]
The Chair: Honourable senators, my name is Rosa Galvez. I am a senator from Quebec, and I am the chair of this committee.
[Translation]
I would like to begin with a quick reminder. Before they ask or answer any questions, I would ask members and witnesses in the room to refrain from leaning in too close to the microphone or removing their earpiece when they do so.
This will help avoid any sound feedback that could negatively impact the committee staff in the room.
[English]
I would now like to ask my colleagues who are members of the committee and participating in this meeting to introduce themselves.
[Translation]
Senator Miville-Dechêne: Julie Miville-Dechêne from Quebec.
Senator Audette: [Innu-Aimun spoken], Michèle Audette [Innu-Aimun spoken] from Quebec.
[English]
Senator Sorensen: Karen Sorensen, Alberta.
[Translation]
Senator Verner: Josée Verner from Quebec.
[English]
Senator Arnot: David Arnot, Saskatchewan. I live in Saskatoon, which is the in the heart of Treaty 6 territory.
The Chair: I wish to welcome all of you and the viewers across the country who are watching our proceedings. This morning, we are continuing our study on the Canadian oil and gas industry.
For our first panel, we welcome, by video conference, Benjamin Sovacool, Professor at the University of Sussex and Boston University; Angela Carter, Professor at the University of Waterloo; and Bronwen Tucker, Global Public Finance Campaign Program Co-Manager at Oil Change International.
Welcome, and thank you for being with us. You each have five minutes to deliver your opening remarks. We will begin with Mr. Sovacool, to be followed by Professor Carter and Ms. Tucker. The floor is yours, Mr. Sovacool.
Benjamin Sovacool, Professor, University of Sussex, Boston University, as an individual: Thank you very much. Good morning. It is a real privilege to talk to you about some of the international lessons that are emerging on the net-zero industry. In addition to being a professor of energy policy at the Science Policy Research Unit and a professor of earth and environment at Boston University, I am also research co-director for a £30-million centre on the net-zero industry that is all about oil and gas, as well as heavy industrial clusters trying to use hydrogen and carbon capture and storage, or CCS.
I want to talk about three things this morning with the committee. The first is that, while interventions, net zero and decarbonization are welcome and necessary, especially given the climate emergency, such low-carbon transitions are not always positive for everyone. There are a lot of people left behind. The U.K. calls this Levelling Up the United Kingdom, where we really want deprived, marginalized and rural areas to benefit from net zero to ensure it is not just elites or wealthy assets in London. As many of you know, there are many situations where low-carbon transitions have created new injustices and vulnerabilities or failed to address the pre-existing structural drivers of injustice.
One of the projects that I am involved with in Europe is called Carbon Intensive Regions in Transition, or CINTRAN. It is how we transition in carbon-intensive regions in the European heartland. That would be for things like oil sands in Estonia and coal mining in Germany, Greece and Poland. There, one of the core lessons is that bottom-up approaches really matter.
There are a wide range of impacts that decarbonization have on social structures and identity, but those issues are not obvious, even to researchers like myself. Communities and regions must be given agency themselves to decide their own plans. That doesn’t just improve legitimacy; it also tends to improve the effectiveness of outcomes and the speed by which those things matter.
The second thing I want to talk about is the role I played in the most recent Intergovernmental Panel on Climate Change, or IPCC, report where I was a lead author on Chapter 4, which talks about just transition. It does a phenomenal job synthesizing what a just transition means for actors like you in Canada, especially as you grapple with oil and gas and how we might strand those assets to provide more equitable transition.
According to the IPCC, the just transition is a set of principles, processes and practices that aim to ensure that no people — workers, places, sectors, countries or regions — are left behind as we transition from a high-carbon economy to a low-carbon economy. The just transition is not just a heuristic, but it stresses the need for proactive action from government that has to do with ensuring that all the negative, social, environmental or economic outcomes are minimized and we really maximize benefits for those disproportionately affected, especially vulnerable groups — Indigenous groups; people in poverty; people whose jobs and livelihoods are threatened.
And finally, there is a responsibility that when we implement just transition policy, you also have to readdress past harms, so there is an element of restorative justice and corrective justice. In the IPCC report, we track just transition commissions. We tracked one in Canada called the Task Force on Just Transition for Canadian Coal Power Workers and Communities as well as the Just Transition Fund in the European Green Deal, but, of course, there are no such things yet for oil and gas. That could be an interesting starting point. We’ve catalogued dozens of these initiatives around the world that are increasing dialogue and promoting inclusivity in net-zero policies.
The final thing I wanted to talk about is my role at the Industrial Decarbonisation Research and Innovation Centre, or IDRIC. We published an article a few months ago in the American Journal of Science, and that article was all about net-zero decarbonization in an interesting way. The classic way that most countries pursue net-zero industry is sectoral — oil and gas; refining; steel; cement; concrete; food and beverages; gas; ceramics; paper and pulp — or it is technological — that is, carbon capture and storage; green hydrogen; blue hydrogen.
The U.K. doesn’t do that. It takes a spatial approach that is around industrial clusters. It takes whole communities, even if those communities like The Humber or Teesside may have a whole mix of industrial emissions and they may have a whole mix of assets — depleted oil and gas fields; high-quality gas from the North Sea; pipelines that go to Norway; connections that to shipping or even sub-sea storage, things like aquifers and underground caverns — even though they have that heterogeneity, and even though their emissions profiles are very different and the corporate actors are different, that spatial approach is extremely effective. The U.K. is on track to have the world’s largest net-zero industrial cluster by 2035, and they aim to have six by 2040.
They are already putting things in the ground. I had a photo I was going to show you, if they permitted it, of a hydrogen boiler being shipped to the Stanlow Refinery near Stanlow, so it’s like the final investment decisions have been made. These are no longer just plans on paper. They are laying pipe for CCS networks, converting gas boilers to run on hydrogen and they are aggressively committed to being net zero in the industrial sector.
When they are doing that, there are a variety of business models and policy mechanisms that Canada can adopt that would work very well for you. Things like regulated asset-based models where you help pay for the long-lived nature of CCS infrastructure in ways that don’t make it too onerous on the near term or carbon border tariff adjustments where you begin to value carbon and tax carbon-intensive goods, which could situate the U.K. or Canada as a leader in net-zero green products.
The final thing I want to end on is something optimistic. For those of you who track the International Energy Agency, and I realize many of you may not, they had a fascinating road map to net zero published in 2021. Hidden in that road map are projections of how much capital investment net-zero industry will take. Here is the high-level finding: It is a hundred trillion dollar opportunity. Between now and mid-century, we will spend a hundred trillion dollars globally on net-zero infrastructure. Oil and gas are one of the largest wedges of that sector. Don’t see it necessarily as a risk; see it as a phenomenal opportunity. If Canada could take the lead in decarbonizing oil and gas, you could situate yourself capturing one of the greatest commercial opportunities in human history. As long as you do stay attuned to issues of equity and justice, and follow the principles of just transition, there is a hundred-trillion-dollar market out there to be captured. Thank you for your time.
The Chair: Thank you.
Angela Carter, Professor, University of Waterloo, as an individual: Good morning. Thank you for the invitation. I respectfully acknowledge that I am a settler from Ktaqmkuk, which is the island of Newfoundland, the ancestral homelands of the Mi’kmaq and Beothuk.
I’m a university researcher who has analyzed the socio-economic and environmental consequences of oil extraction in Canada’s oil-producing provinces. I have a recently taken a new position with the International Institute for Sustainable Development as an energy transition specialist.
I wanted to note this is independent research, not done for a firm or sector, and the research has been motivated by the experience of my home province of Newfoundland and Labrador, once heavily dependent on oil production and still facing economic distress. I am from a working-class family and all the men in my immediate family have worked as tradespeople in the oil sector, so I have a comprehensive sense of what this industry looks like.
I have two points to contribute to your committee’s study to start. First, this is a pivotal moment of global climate crisis as well as climate and energy policy opportunity. This week, the Intergovernmental Panel on Climate Change released its synthesis of climate research, and it underscores that this is a “code red” moment for humanity because human emissions — mostly from rich world countries and high-income people — are causing ever-worsening health, socio-economic and environmental impacts, and yet the current policies we have are not enough to stop the temperature from rising even more. More importantly, perhaps, the IPCC is documenting that the vast majority of the emissions causing this crisis are from oil, gas and coal. These fossil fuels were responsible for 86% of global emissions over the last decade.
According to feasible pathways aligned with keeping temperatures within a 1.5-degree warming limit, global oil and gas production and consumption must decrease by 30% by 2030 and 65% by 2050. That’s a reduction of about 3% every year. As confirmed by the International Energy Agency, which Dr. Sovacool has just motioned towards, and the IPCC, there can be no further exploration or expanded production of fossil fuels to keep us within that 1.5 degree limit.
Governments around the world are responding to this challenge. We see this in national bans on oil, gas and coal exploration and extraction, global support for the Fossil Fuel Non-Proliferation Treaty and the Beyond Oil & Gas Alliance, which is a multinational effort to phase-out oil and gas production. Notably, Quebec has taken a lead role in this effort seen through its recent ban on oil and gas production, exploration and public financing as well as its membership in the Beyond Oil & Gas Alliance.
Countries withdrawing from fossil fuel extraction and diversifying their economies are reaping significant economic benefits, as Dr. Sovacool has motioned towards. In new research on the first jurisdictions to ban fossil fuel exploration and extraction, I am noting that places like Denmark, Germany, Illinois and Colorado are experiencing significant gains in terms of employment, public revenues, energy security as well as health benefits. When this is done in an inclusive, cross-society way, these transitions can boost social equity and development as well.
Secondly, we have an obligation and an opportunity to phase-out oil and gas production in Canada. The oil and gas sector has been the largest and fastest-growing source of emissions in the country. For decades, it is outpacing ambitious efforts to reduce emissions in other sectors.
This sector is the primary barrier to Canada meeting its climate commitments, and meanwhile, oil and gas firms in Canada have collected unprecedented profits in recent years, but not invested in climate solutions. Instead, they continue to demand that governments pay for billions for false solutions in the oil and gas sector like carbon capture and storage that are mainly — in Canada — serving to increase oil production, as we’ve been using that technology in the oil and gas sector over the last decades.
The Canada Energy Regulator anticipates that oil and gas production will increase for decades to come. And yet, Canada has a special responsibility to wind down given its historical fossil fuel production and its capacity to transition. Equity-based assessments indicate that Canada’s oil and gas output should be cut by 74% by 2030 and phased out completely by 2034. Indeed, just this week, the United Nations Secretary-General called on countries like Canada to commit to reach net zero a decade earlier — by 2040 — achieved in great part by phasing down oil and gas production.
But more is at stake than even climate stability in Canada because people in this country, especially workers and communities dependent on oil and gas extraction, are vulnerable to the imminent decline in global oil demand. New analysis is indicating that oil demand will be declining by 2030 and fall steeply thereafter. We are at a global energy tipping point due to technological advances — the steeply falling cost of renewables — investment shifts toward low-carbon sectors, intensifying climate crises and fossil fuel insecurity that is resulting in growing public demand for effective climate policies. The convergence of these changes is driving a shift away from fossil-based energy that leaves our oil-dependent communities at risk.
Thankfully, there are opportunities over the next year for Canada to course-correct and seize the benefits of transition, including implementing a strong cap on emissions in the oil and gas sector, aligning oil and gas production projections with a 1.5-degree future, ending subsidies for oil and gas — especially false solutions like subsidies for carbon capture and storage in the oil and gas sector — redirecting those oil and gas subsidies toward building out an equitable low-carbon economy and investing significantly in sustainable jobs with a particular focus on economic justice for communities that have been made vulnerable by our existing economic system, notably low-income communities and Indigenous peoples. Finally, ending approvals for new oil and gas fields and the development of infrastructure to produce, transport and consume fossil fuels.
I welcome our discussion on some of these points. Thank you again for the invitation.
The Chair: Mrs. Tucker, the floor is yours.
Bronwen Tucker, Public Finance Campaign Program Manager, Oil Change International: Good morning. Thank you for taking on this critical topic and for the invitation to take part in this consultation. I co-lead the global public finance program at Oil Change International, a research and advocacy organization. I am joining you today from Toronto.
In 2016, my colleagues published a paper whose core finding has since been validated and adopted by the International Energy Agency and the Intergovernmental Panel on Climate Change, among other expert bodies. Both of the speakers this morning have also highlighted this finding.
The core argument here is that the carbon emissions associated with oil, gas and coal in the world’s currently operating fields and mines will take us well beyond 1.5 degrees of warming. In other words, we cannot afford to approve new oil and gas projects, and we need to rapidly wind down existing extraction and transition to a 100% renewable economy.
Since publishing this paper, we have been working with communities to get governments around the world to act according to this reality. I want to highlight four key recommendations for the federal government that come from this work and that I urge your study to adopt in your report.
First is to stop funding oil and gas expansion. This means ending remaining federal fossil fuel subsidies, including domestic public finance through Export Development Canada, and rejecting fossil fuel subsidies dressed in sheep’s clothing — things like funding for carbon capture and storage or to cover the basic corporate responsibility of cleanup costs.
The second is to regulate a phase-out of oil and gas production. Right now, the federal government has a direct opportunity to do this by adopting an emissions cap. However, for a cap to work, it must include all oil and gas emissions — including the 70% to 80% of emissions that happen when the product is burned — follow a realistic and equitable 1.5 degree-aligned scenario and have meaningful regulatory teeth.
A point that is often lost is Canada’s responsibility to global equity. In 2022, a Tyndall Centre report looked at what fair phase-out dates for fossil production would be globally and found that countries like Canada and our peers should be aiming to phase-out oil and gas production no later than 2034. That’s a far cry from the 2050 timeline we often talk about. That would also echo that recommendation for Canada to join peers in the Beyond Oil & Gas Alliance. We would not be the first government to make these commitments.
Third, I would ask the federal government to fully uphold the United Nations Declaration on the Rights of Indigenous Peoples. This means fully upholding free, prior and informed consent for new and ongoing oil and gas extraction projects and also working in a nation-to-nation manner on fair compensation for harms, environmental health regulations and full recognition of Indigenous land rights. As we speak, Imperial Oil’s Kearl tailings pond has been leaking into the Athabasca watershed since at least last May. It is an unresolved problem as we speak — an indication that the direct environmental impacts on communities are significant and not being captured by our current regulatory system.
Finally, I think something that our governments have been slow to respond to — obviously, we’re in a kind of moment of “polycrisis” and a lot of unexpected economic shocks, but it just can’t be said enough that there is no scarcity of levers to raise money to pay for a just transition and make sure that this moment is an opportunity rather than something that leaves people in Canada worse off. Therefore, the final recommendation is to tax the excessive profits of the oil and gas industry and use these to fund a just energy transition. Ending subsidies, which I already mentioned, would raise roughly $20 billion a year and taxing just half of the extra profit margins in oil and gas from last year would net well over $40 billion.
We’ve heard a lot of arguments from oil industry lobbyists, including the Canadian Association of Petroleum Producers, or CAPP, that Canada’s royalties are already tied to the cost of energy, but this hides the really important fact that Canada’s royalties are extremely low to begin with and almost all royalty regimes are tied to the cost of oil. Rystad Energy, among others, shows that Canada, in 2022, even as prices loomed, had the lowest royalties among major producers. This kind of fact has really been missed in a lot of the discourse around the possibility of a windfall tax. It’s also important to note that not taxing these profits doesn’t affect a tax on the lowest-income Canadians because for every 25 cents of every dollar spent because of inflation, the Canadian Centre for Policy Alternatives, or CCPA, has found that money is going directly to these excess oil and gas extraction profits.
I will close by saying that I have spent a lot of the last decade in Edmonton speaking to other Albertans about the energy transition. The extent to which people in Alberta are ready for a conversation about a just transition is almost criminally under-reported. The problem has been that there are no serious alternatives being proposed by the leading governments because of the extent of the industry’s political power.
Your committee has an opportunity to strongly recommend an alternative, and I urge you to do so. Thank you very much.
The Chair: Thank you very much. We will proceed with a period of questions.
Senator Arnot: Thank you to the witnesses here today. I’m really interested to follow up on some of these questions. My first question is to Professor Sovacool. I am interested in the idea of applying restorative justice outside of the justice system. I’m familiar with it inside the justice system, but I would like to look at fairness, equity and justice from another perspective. The international experience is really important.
The Government of Canada is talking about a green transition. Fundamentally, they’re talking about jobs — creating new jobs, people moving to jobs. When people move to jobs, they leave behind a community.
I’m saying this in this context because yesterday I met with a group of people who represent four communities in southern Saskatchewan. They are looking at the prospect of seeing empty houses, businesses, schools, hockey and curling rinks — the whole community leaving — because there is no industry anymore.
They have done something unique, which you touched on, sir. As a group of communities, they have come together with a plan that they have been working on for over three years. In Saskatchewan, we have a lot of brown coal. There is a technology to extract hydrogen as an energy source from brown coal, and other things they can extract. They have a business case for this, which I commend them for.
I like the idea of the U.K. approach, the industrial cluster. But when people leave, they leave behind a community. One of the compelling stories I heard was about a pharmacist who invested life savings about five years ago in a small community in Saskatchewan and who faces the prospect of virtual bankruptcy during this transition unless there is equity and fairness brought to some of these things from the perspective that you are talking about.
I would like to know more about it. I understand from the clerk that you have a set of materials, a PowerPoint, which you are going to send to us.
But I’m more interested in some of the principles you talked about and digging down deeper. I’m inviting you to send that to this committee. I like the idea of the U.K. approach, as I understand it, of looking at this from the perspective of not just jobs but the whole community. If you can amplify on that, I would like you to do that, sir.
Mr. Sovacool: Thank you, senator. It is a very good point, which emphasizes what we call place-based approaches to justice. What is just for Saskatchewan won’t be the same for Quebec, Vermont or Colorado.
That said, the U.K. approach does try to create a levelling up, as you’ve noted, where no one is left behind. If people leave a carbon-intensive region, they don’t necessarily have to struggle with empty hockey rinks and closed restaurants and factories.
Granted, the U.K. regime is a bit different. They have a very aggressive Energy Act and Climate Change Act 2008. They have a very aggressive carbon tax. They are inputting lots of state money behind a lot of the technologies — CCS, hydrogen, resource efficiency, fuel substitution — that go beyond that.
One of the things they have invested in is skills training and capacity building. It’s not necessarily the skills that you think we need. We don’t necessarily need in the U.K. high-level patentors for new hydrogen blending. We need welders and engineers. We need people who know how to lay pipe.
There is a sense that if the U.K. achieves its net-zero goals, they’ll need jobs from abroad. They don’t have enough skills or workers in the U.K. This could be a great opportunity for Canada, if you had the skills base, to export those skills and knowledge through consulting firms, secondments and missions like that to ensure that the people who are concerned about their jobs are retrained to operate in a low-carbon economy. I think it’s very possible. Certainly, there are principles of justice that you can follow. I’m happy to share those.
There are also some other mechanisms I didn’t mention, like the Climate Assembly. The U.K. had a climate change citizens assembly, which was good at getting national dialogue and hearing people’s voices. Canada could do something like that as well.
Senator Arnot: I’m really looking forward to what you are going to provide us. Please be robust and comprehensive in what you think we need to know. Thank you.
The Chair: Yes. Please send your material to the clerk of the committee.
I think Professor Carter wants to add something.
Ms. Carter: Yes. I love this question. This is where we get down to not just the risks but the opportunities.
In some of the new work I’m doing with the International Institute for Sustainable Development, we’re trying to track the cases of effective transition away from fossil fuels. At the same time, this is about economic diversification. It’s not just about winding down one sector; it’s about winding up a whole new way of developing local economies.
I want to say, sir, to your point: Coming from Newfoundland and Labrador, we have already been through a cod fishery collapse. We know what it looks like when big ecological and market changes disrupt thousands of communities. We know what unmanaged wind-downs look like — crash-outs — so we know we need to do something different.
I want to flag the issue of Germany. Germany used to be extremely coal dependent. In the 1950s, 500,000 people in the Ruhr region were employed in the coal sector. Of course, coal production was starting to sharply decline given competition from cheaper imported coal and so forth. Communities began to be in crisis, just like your communities in Saskatchewan.
The German government created a way of communicating and engaging with labour unions, employers and vulnerable communities to develop and substantially invest in new economic diversification projects. This focused on developing infrastructure and new manufacturing sectors, post-secondary education, culture, tourism and service sectors. I should say that this didn’t happen over two years. This was a decades-long effort to engage citizens in their communities with what we can do next in an economy that is going to be moving away from fossil fuels.
I just want to put a little footnote there to say that there are examples existing out there that we can learn from that show us that when a fossil fuel sector is in decline, it doesn’t mean all hope is lost for communities. In fact, it’s an opportunity to create a whole new economy that benefits more people. I would be happy to share some of that information if you like.
The Chair: Yes, please.
Senator Arnot: I’m really excited about this perspective that you are bringing to this issue. Certainly, if there is information you think we should know, please send it to the clerk. Don’t edit too much, especially these international experiences and your advice to the Government of Canada — and, in effect, the Government of Saskatchewan — on these issues.
Ms. Carter: I will, indeed. It will be my pleasure.
The Chair: Thank you so much.
[Translation]
Senator Miville-Dechêne: This question is for Professor Sovacool.
Since the beginning of our study, we have been hearing from witnesses who often refer to scenarios or projections of hydrocarbon consumption in the world, projections that are contradictory. On the one hand, representatives of the fossil fuel industry, who are convinced, particularly in Canada, that demand will be growing and strong for decades to come, point to certain scenarios of the International Energy Agency. On the other hand, environmentalists say that fossil fuels’ days are numbered, that demand will fall rapidly, and they also point to the International Energy Agency’s projections. As non-expert consumers, we’re a little confused.
Since you’re looking at these issues closely, without making a definitive statement, could you tell us which scenario you prefer?
[English]
Mr. Sovacool: Excellent question. I was listening to the translation because you do not want to hear me speak French.
The IPCC report is a good starting point, even though it is long; it’s thousands of pages. It’s already out of date because it was collecting evidence three years ago, and our knowledge of climate change continues to accelerate.
My own personal take is that we are in a climate emergency and there is very little future for oil and gas. Well, there is very little future for oil and coal. Gas is a bit trickier because it couples very well with things like hydrogen and it can do things like storage for wind and solar. So whether you include gas is more legitimately debatable. But I think the days of coal and oil in particular are numbered.
You see so many countries around the world adopting very aggressive net-zero policies. You have talks of carbon tariff border adjustments, which could price countries out of the market for doing carbon-intensive goods. You also have what science is telling us are some of the unknowns, which could accelerate climate change, like tipping points.
I was just reading a study from the proceedings of the National Academies of Sciences that says by the end of the century, sea-level rise could cause $100 trillion in damages per year, and that’s just one impact from climate change.
We need to see these types of investments of getting off of fossil fuels, mitigating emissions and building adaptation as essential to the future of our civilization. Otherwise we’re going to see trillions and trillions of dollars in future damages.
One of the key resources that Canada has is renewable energy and energy efficiency. I just heard the U.S. Secretary of Energy, Jennifer Granholm, speak. She says that, for now, no one is able to weaponize wind and solar.
Those are the other big things with oil and gas. They are traded commodities. They can be disrupted by wars, conflicts, hurricanes, et cetera. If you look at the price volatility of oil, it’s a roller coaster. It’s affected by such things as embargoes, the Organization of the Petroleum Exporting Countries, or OPEC, the Iraq War and the Russian invasion of Ukraine.
You don’t have that type of volatility. That volatility is damaging for communities, it creates a resource curse and it makes it very difficult to invest. Whereas if you see the projections for renewables, it’s the opposite. The fuel is free. Cost profiles are low.
I think the future energy economy is renewable, diversified and must be attuned to the trillions of dollars of climate damages that are pending.
Senator Miville-Dechêne: You are saying that the U.K. is approaching the net-zero goal and is doing what it takes. What are the lessons we can take from the U.K. experience and apply to Canada?
Mr. Sovacool: Very good question as well. I’ll be brief this time.
I think there are three lessons. The first is that you have to have strong sanctions that coerce, force and incentivize companies and firms to participate. The U.K. has a Climate Change Committee. They have a carbon budget. It’s enforced. Industry takes it seriously. You don’t have any of this debate over the realities of climate change that you may see in the U.S. That’s the first lesson: Have strong government intervention. The market won’t deliver it itself. There’s too much leakage, too many hidden externalities and too much concern over lobby.
Second is that you have to make sure you involve communities. The U.K. government has city councils, local enterprise development partnerships and community groups. All of them have a seat at the table — even environmental groups like Friends of the Earth. It tries to follow some of those principles of justice that I mentioned before.
Third is that the U.K. is putting a lot of money into innovation, but it isn’t necessarily picking winners. The U.K. isn’t saying only blue hydrogen for gas, only green hydrogen for renewables, only nuclear power or hydro or direct air capture or biochar. They are saying all of it. It’s very much a diversified approach. In case one of those technologies doesn’t deliver, they have other technologies behind it. That includes a strong focus on efficiency. Energy efficiency and resource efficiency are probably the best single lever they have to lower their emissions portfolios.
Senator Batters: My question is for Professor Carter.
I believe you were saying in your opening remarks that oil production — and I think you were speaking about it globally with these percentages — must decrease by 65% by 2050. You said that would amount to 3% per year. Again, I think you were talking about globally. I believe you gave Canadian numbers later in your presentation.
By what percentage did oil production decrease in the last year or did it increase? We have had a Liberal government with a major focus on this issue for eight years.
Given those particular numbers, and if — as I anticipate — it probably did increase and not decrease, or maybe slightly decreased, wouldn’t you concede that those reduction targets would be completely unrealistic?
Ms. Carter: Thank you for your question. I appreciate it.
Oil production is increasing in Canada and it is forecast to continue to increase in the coming years. Is it unrealistic? I would say this depends on government policy.
Currently, the oil-producing provinces and the federal government are still anticipating — and, I would argue, perhaps banking on — the expansion of oil and gas. My intervention is to say that there are two things that make this a point on which we need to pause and consider the trajectory we’re on.
One is that this means if we continue charging ahead with increasing oil and gas production in Canada, we are contributing more and more to the climate crisis globally. Canada has already done this for many decades. We have historical fossil fuel production that is enormous in terms of the contributions to emissions globally. Canada has already contributed a lot to the problem.
We know now, by all the science, that we have to — globally and in Canada — start winding down production. That’s a climate imperative.
The other piece — and this is to the previous question — is that there is an economic risk that is growing now. The International Energy Agency, which is by no means an ecologist organization, is looking ahead to oil demand. They are indicating to us that, by 2030, global oil demand will be in decline and will steeply decrease after that. If Canada is banking on economic stability on the basis of increasing oil and gas production, that is misaligned with future energy markets.
There is a new piece that was written by a colleague of mine at the International Institute for Sustainable Development, Aaron Cosbey, on why Canada has to start preparing for that decline in global oil demand.
If I might give one piece of evidence that is concerning to me, and I’ll say this personally, as someone who is in an oil-producing province. In Newfoundland and Labrador, many of our budgets are pegged on increasing oil production. This report shows that about 44% of oil demand is for transportation. We’re exporting most of our oil in Canada to the United States. We’re fuelling up gas tanks in the United States. But in the U.S., there is already now under way a huge effort to electrify transportation and get away from using oil for transportation.
I would argue that we’re in a precarious economic position. We are not yet doing that, but we need to.
Senator Batters: I need to pinpoint whether the numbers that I quoted in my question were global or Canadian numbers. In particular, you said that Canadian oil and gas production did increase last year. By what percentage? How much is it projected to increase in the next few years?
Ms. Carter: The numbers that I quoted are global and have been applied to the Canadian case, so basically mapping Canadian production onto what that global wind-down imperative is. I will happily share that data with you if you want to get into the details.
I don’t have offhand the exact percentage by which oil production has increased over the last year. I don’t have that at my fingertips.
Senator Batters: Do you know approximately how much it’s projected to increase in the next few years?
Ms. Carter: I don’t want to speak about data that I don’t have exact or front of mind. I use the Canada Energy Regulator documents —
Senator Batters: I would appreciate it if we could receive that because that was an important part of the point that you were making.
Ms. Carter: Yes.
Senator Batters: Last month, when we had a panel on this particular issue, we had many Indigenous leaders in the oil and gas industry in Canada, and they want more. You began your presentation talking about the importance of this issue to you personally and listing where you are testifying from and this sort of thing.
Maybe you didn’t have a chance to see that testimony. If you didn’t, I would encourage you to check it out. I thought it was very instructive. I come from an oil-producing province as well, Saskatchewan. There were people on that panel from Saskatchewan — Indigenous leaders in the oil and gas industry — and they want more. What do you say about that?
Ms. Carter: Again, I’m a settler researcher. I’m not an Indigenous person, so I can’t speak on behalf of Indigenous communities.
Senator Batters: I recognize that. Obviously, it’s an important topic to you after how you started out your presentation.
Ms. Carter: For sure. I just want to be clear that I can’t speak on behalf of Indigenous peoples.
Certainly, it is part of my role as a researcher in this space to amplify and to support. Based on my understanding of Indigenous communities and their engagement with fossil fuels, I would say that there is, of course, a lot of diversity. There are Indigenous communities seeking any means of economic development. We have a long history of colonization in this country that has made it so that Indigenous communities are needing development. And so, of course, oil and gas development is one form of development that some Indigenous communities are choosing to pursue.
At the same time, Indigenous peoples in this country have been at the forefront of contesting and resisting oil and gas development as land defenders and water protectors because they are seeing, more than any other communities in Canada, the impacts of the climate crisis. Indigenous peoples have done the very least to contribute to the problem of the climate crisis and are burdened with the greatest impacts, and in many cases have the least capacity inside communities to confront that.
What I would point to as well are the examples of Indigenous communities developing, for example, renewable projects or efficiency projects. I point in particular to Sacred Earth Solar, where we have Indigenous communities that are taking leadership and ownership of renewable projects so that they can get off of fossil fuels and spare their community, hopefully, worse climate impacts and also be part of seizing the benefits of the transition.
There are many nuances here that are worth exploring.
Senator Batters: Right. I just wanted to make the point that many of those witnesses that we heard from talked about all the different ways that they have, within the oil and gas industry, continued their role for many hundreds of years as protectors of the land. I encourage you to look at that. It was an important part of testimony. Thank you.
The Chair: Thank you.
Senator Sorensen: I’m going to try to sneak two questions in. Ms. Tucker, first of all, I’m a senator from Alberta, as I mentioned. This study that we’re in the midst of is obviously of specific interest to me. You made reference to spending time up in Edmonton. I think I heard you say that the industry is engaging and participating — these are my words — enthusiastically with a conversation around transition. Did I interpret your comment correctly?
Ms. Tucker: Yes, to clarify —
Senator Sorensen: Just hang on.
The Chair: Before you answer, we are having issues with interpretation coming from your microphone. You hear the question?
Ms. Tucker: I do.
The Chair: Can you send us a written answer to Senator Sorenson’s question?
Ms. Tucker: Yes, I am happy to write something out.
Senator Sorensen: All right. Thank you. I’m interested in what you learned when you were up in Edmonton speaking to those companies.
Professor Carter, I have some notes that said you recently travelled to Denmark and noted that the number of people working in the renewable energy sector there is now larger than the workforce in oil and gas. I’m interested in your observations regarding that and how some of that can be applied to Canada.
Ms. Carter: That is a fantastic question and the one that actually gives me the most hope in the Canadian context. Thank you for asking that.
The Denmark case is really important because Denmark is a major oil producer in the EU, and they are choosing — via a ban that they implemented in 2020 — to end exploration, so no new licences for exploration in the North Sea. They are motivated to do this for climate reasons, but also for economic reasons because Denmark was seeing that the economic returns they could expect from the industry from now in the decades to come were starting to dwindle. Also, oil firms were starting to withdraw from the sector as well, so less interest in pursuing licences.
What Denmark did is it created — through some of the same mechanisms that Germany did — a society-wide effort to pivot, to change its economy so it would focus more on renewables. The key sector that it depended on is wind energy.
Now what we’re seeing in the very centres that used to be very oil and gas-dependent — so communities that had the highest employment in oil and gas — employment there is being overtaken by those workers transitioning to the wind sector. I got to speak with some of those people on the west coast of Denmark to get some of their data, and we have an overtaking now of wind energy employees compared to oil. What’s fascinating — and I think really beautiful to bring into the Canadian case — is that workers in the oil industry in Denmark don’t think of themselves as oil workers. They think of themselves as energy workers.
They are delighted to have opportunities in the wind sector and to transition and take their skills, which are highly transferable from the oil sector, and bring them into the renewable sectors. This is really promising, not just in terms of employment, but also in terms of public revenues. Denmark, as a first mover to start to wind down its oil sector and move towards wind, is now seizing the benefits of being an exporter to the world of wind turbines and expertise. We see examples of wind energy projects popping up now all over the world that are from Danish companies.
This is a lesson for Canada that we perhaps can think about cashing in on the renewable transition, but, again, doing it in a way, as Denmark has done, so that there is public involvement, workers are brought along and protected and there are investments made so that communities can transition. Another great example that, indeed, I think should inform the Canadian case.
The Chair: Thank you.
[Translation]
Senator Audette: I just want to remind everyone that interpreters have only one mouth, so when we talk and want to engage in a dialogue, we should wait until the other person is done, because I want to understand well and each person who speaks matters in my thinking and in my heart.
Thank you so much for your presentations. Some people are academics and, in my view and heart, you have a form of power that influences or feeds into our decisions and helps us understand the issues.
To what extent do you think Canada, regardless of the governments that have been in power, has engaged Indigenous peoples from start to finish, whether they agree or disagree with these major projects? Can a balance be found, knowing that First Nations are living in areas where resources are located, where oil is present, and others are coexisting, especially near the St. Lawrence River — the Innu, the Mi’kmaq and the Wolastoqiyik — who are saying no?
I am from Labrador [Innu-Aimun spoken]. How can a balance be struck? Do you have any research, any information that you could share with us to make sure that, in our reflections, when we table our report, we find that balance, which is important for Indigenous peoples’ rights?
[English]
Ms. Carter: I would love to engage with you more about these questions, especially given your background in Labrador. I hope we can have that conversation in the future.
What I would say — in a two-second response — is that the Government of Canada and the oil-producing provinces in Canada have failed miserably to respect the rights of Indigenous peoples in Canada certainly when it comes to fossil fuel development, and not just fossil fuel development. Some projects that have been earmarked as transition projects as well. This has been a failure across the board.
Where I am learning more is by looking at the work of Indigenous environmental organizations that are now showing what kinds of climate policy in this country are decarbonized and also decolonialized. We do have pathways now, but we’re not implementing them yet. We’re pushing forward with this to make sure that this is at the forefront of our transition — Indigenous rights and sovereignty.
I think that core among this is ensuring that any of these projects have to have the consent of Indigenous peoples and communities. They have to be owned in great part by Indigenous peoples and directed by them in responding to their needs and priorities.
I think those are the core principles. We know what those are now, but no, we have not yet implemented them across the country, and that is a great loss.
The Chair: To our three witnesses, I would ask that if you have other materials that could complete the answers we were given today, please send them to the clerk of our committee.
That’s the time we have for this panel. Thank you so much.
For the second panel, we welcome in person Ms. Julia Levin, Associate Director of National Climate for Environmental Defence Canada, and by video conference, we have Sara Hastings-Simon, Assistant Professor at the University of Calgary, and Eriel Deranger, Executive Director of Indigenous Climate Action. Welcome and thank you for being with us. You each have five minutes to deliver your opening remarks.
We will begin with Ms. Levine. The floor is yours.
Julia Levin, Associate Director, National Climate, Environmental Defence Canada: Thank you for the invitation to appear before the committee.
This week, we heard once again from the Intergovernmental Panel on Climate Change about the devastating impacts and lost lives and livelihoods that have already happened because of the climate crisis as well as the frightening future that awaits us if we fail to cut our emissions in half this decade.
The world scientific community has reminded us once again that the solutions are clear and they have been for a long time. The coal, oil and gas we already have under production will blow us past our climate goals and lead to irreversible harm to people and ecosystems. The rapid and equitable phase-out of fossil fuels must be the centrepiece of any science-based strategy. We must replace fossil fuels with renewable energy, massively increase electrification and reduce energy demand through energy efficiency measures. We can do it at the pace and scale needed. The only thing standing in the way is political will.
Let’s also remember that it didn’t have to be this way. Decades of obstruction by the fossil fuel industry have led us to the brink of catastrophe. Fossil fuel companies learned decades ago that the use of their products would lead to globally catastrophic climate change. Rather than alert people and curtail their operations, they have worked instead to deceive the public and decision makers about the threat.
For decades, they have funded efforts to undermine climate science and cast doubt on proven solutions. At the same time, they have fought against any rules or oversight that might impact their profits. All of this has been thoroughly documented, including by the United States House Committee on Oversight and Accountability. Now that climate denial is no longer an option for them, oil and gas companies have shifted to greenwashing and delay. Their favourite tactic is promoting carbon capture. Oil and gas companies see carbon capture as a way to greenwash their activities, prolong our dependence on fossil fuels and get massive subsidies.
Despite decades of effort, carbon capture’s track record is of expensive failure after expensive failure. The vast majority of projects never make it off the ground, and those that do underperform. Even if it did work as advertised — which it doesn’t — carbon capture does nothing about upstream methane emissions or the 80% of emissions that come from when we burn the oil and gas downstream. Carbon capture is unnecessary, unproven at scale and unjust for front-line, predominantly Indigenous communities who will be impacted by the rollout of risky carbon infrastructure.
Canadian oil and gas companies don’t have serious plans to reduce their emissions. Despite their rhetoric and ad campaigns, in 2022, Pathways Alliance members spent just 0.4% of their cash flow on emissions reductions. Reducing methane emissions is the low-hanging fruit of climate action. It has low to negative costs to companies. But instead of reducing their methane, companies are under-reporting those emissions and fighting against methane regulations the same way they are fighting against the proposed cap on emissions from the sector. Despite all the talk from Canadian oil and gas companies about climate leadership, their current business models would fuel continuing climate disaster. And of course, beyond the climate impacts, the extraction of oil and gas poses significant environmental, social and health impacts on Indigenous and front-line communities.
Let’s be clear. Canadian oil and gas have no place in a safe and healthy future. The International Energy Agency says that the demand for oil must fall by 75%. Canada’s oil is among the world’s most polluting and expensive. It’s magical thinking to believe that Canada’s oil could be the last barrel standing. It won’t be. Failing to prepare for that is irresponsible to the people who depend on the sector today. A rapid transition off of fossil fuels is not just necessary, it’s achievable. Canada can transition off fossil fuels over the next decade, and the benefits far outweigh the costs.
Currently, the oil and gas industry provides less than 1% of jobs across Canada. There are already more people working in clean energy than in the fossil fuel sector. While oil and gas companies keep shedding tens of thousands of jobs as they cut costs and automate, jobs in the clean energy sector are growing quicker than any other sector of the economy. The oil and gas sector contributes less than 5% to Canada’s GDP — far less than what the impacts of the climate crisis and burning fossil fuels are already costing us.
The energy transition is happening, as you heard in the last panel, whether we like it or not. The longer we delay planning for it, the more chaotic and painful it will be for the communities and families who depend on it today.
The window for ensuring a climate safe future is rapidly closing. We can’t keep dancing around an obvious truth. We must phase out fossil fuels. Achieving that means that we must stop giving so much political space to those with a vested interest in protecting their profits over the chance of a liveable future.
Thank you. I look forward to your questions.
Sara Hastings-Simon, Assistant Professor, University of Calgary, as an individual: Thank you for the invitation to speak with you today. I’m talking to you from the city of Calgary, which is my home and the home of the traditional territories of the people of the Treaty 7 area in southern Alberta, as well as the home of Métis Nation of Alberta Region 3.
I would like to offer three observations and principles related to the Canadian oil and gas industry and the ongoing energy transition.
The first is that the magnitude and pace of change in the global fossil fuels market is significant and accelerating. This is important because successfully navigating the changes will require a differentiation between elements that are within versus outside of the control of industry and Canada. Some impacts cannot be avoided, even if there were to be a complete decarbonization of the sector.
The change — which is a flattening and ultimate decline in demand for fossil fuels — represents a reversal of a 200-year-plus trend of rising demand. The exact pace of the decline, of course, will depend on the level of ambition displayed by governments around the world. But as recently published scenarios show — such as the International Energy Agency’s World Energy Outlook 2022 — even without new policies, we are already seeing signs of the reversal of this multi-century growth.
This change is being driven by a few key factors, including the need to respond to climate change, but also economic and energy security concerns — for example, in the case of dramatic declines in expected growth of demand for natural gas following the Russian invasion of Ukraine.
While upstream decarbonization of the oil and gas sector may be necessary for the industry to continue to operate while meeting Canada’s climate goals and it may be a requirement of investors and customers, it cannot insulate the oil and gas industry from the impacts of this underlying trend and the reduction in the total value of the market.
Of course, demand for oil and gas will not drop to zero overnight or even out to mid-century, but the reversal of the 200-year trend of growth will lead to many changes in the market and ultimately the value of the industry in Canada. For example, we are already seeing a decoupling of oil prices and the level of investment and jobs created in my province of Alberta.
Secondly, the government has a clear role in supporting workers in the oil and gas industry who will be impacted by these changes and should follow the following principles, as well as those raised in the previous panels. These include the fact that the focus should be on supporting workers and communities, and the government should differentiate between those groups and the private companies and investors who are responsible for the risks they take on in the market.
A range of supports are needed to support workers and communities in different situations. These include, but are not limited to, income and benefit supports, retraining and pension bridging, but must also consider broader community needs. For example, changes in employment may mean a second family member returning to the workforce and requiring work training even if they are not transitioning from a previous oil and gas job. There may be other types of supports needed in communities, such as child care. Supports should be developed in consultation with communities and be designed in a way that they can be adapted to needs when they arise.
Finally, in contrast, the role for government in supporting industry emissions reductions and competitiveness should be more limited and tied to a clear barrier or public benefit. Government must differentiate its role in supporting new technology development and deployment from simply covering costs to keep the oil and gas industry competitive in the face of market forces.
When comparing the amount of government support provided for direct emissions reduction costs to other jurisdictions, the comparison must take into account the full structure of the industry and what public benefits are derived from it. For example, some regions — such as Norway — with higher levels of funding for carbon capture and storage also have significantly higher royalty rates, where more of the value of the resource flows back to the public.
Support should fit within the context of the existing policies and programs. For example, in the case of support for carbon capture and storage in Canada, the carbon pricing system, in fact, provides an incentive that is larger than the U.S. subsidies. But if there is policy uncertainty around the future of carbon pricing that creates a lack of certainty, rather than providing additional supports that risk becoming windfall profits, policy design should look to address gaps and create certainty, for example, through the use of tools like contracts for difference.
Moreover, and more fundamentally, successful government investment in economic development or industrial policy requires strong public institutions with deep expertise in sectors and technologies to direct investment and avoid simply chasing private capital through subsidies or responding to the actions of other countries, such as the U.S.
Economic development opportunities and jobs for workers displaced from the oil and gas industry may be developed in other energy sectors, but not necessarily. As governments are looking to support workers and communities through this transition, they should consider the overlap in skills and competencies rather than sector outputs when identifying potential areas for investment.
Thank you. I look forward to your questions.
The Chair: Thank you.
Eriel Deranger, Executive Director, Indigenous Climate Action: Thank you for having me. I would like to preface my statement this morning by stating that I really feel the oil and gas industry is the single most significant barrier to real climate action and climate justice in this country. To overcome this massive barrier and achieve climate action and reconciliation with Indigenous peoples, we need to get to the facts.
Since its beginning in the 1850s, the oil and gas industry has come to dominate the lands and waters of the original peoples of what is now known as Canada. Despite a growing understanding about the links between burning fossil fuels and global warming, we’ve seen a doubling of oil production since 1980, and we continue to see this industry expand at alarming rates.
Between 2005 and 2020, we saw Canadian oil production increase by 26%. By 2020, oil production amounted to approximately 5.43 million barrels per day, an increase of nearly 6% in comparison to the year before. In March 2023, the Canadian Association of Petroleum Producers announced that investments in oil and gas production in this country hit $40 billion, 11% higher than the year before.
This endless expansion has led to massive carbon pollution and the ongoing colonization and desecration of Indigenous lands and territories. While this industry represents only 5% of the country’s GDP, it represents approximately 27% of the country’s total greenhouse gas emissions.
We cannot afford new oil and gas projects if we are to limit global warming to 1.5 degrees. We have all heard this over and over with the recent IPCC report. Yet, a study that came out of the University of Waterloo in 2021 said that Canada’s fossil fuel production is scheduled to rise until 2039 and remain above current levels in 2050. They concluded that while Canada represents only 0.5% of the world’s population, we would exhaust 16% of the world’s remaining carbon budget if we are to remain below 1.5.
It is important to understand that the impacts of this massive industry are not only environmental. The industry has been responsible for the massive destruction of vast Indigenous territories while actively keeping us out of the economic benefits. We only receive benefits if we can prove impacts and harms to our lands and people.
In addition, recent studies have shown that the benefits of the oil and gas industry diminish across race and gender lines and that Indigenous workers often have lower-rung jobs in the industry, while Indigenous women face even more barriers.
Despite the injustices and unsustainability of the industry, Canada — and Alberta in particular — are doubling down on extraction. What’s even more alarming is that the expansion of oil and gas is being subsidized by our governments.
A report from Bloomberg Energy found that from 2015 to 2019, Canada provided $100 billion to the fossil fuel sector, increasing 40% over the years — the second-largest increase among G20 countries. Canada provides more public financing to oil and gas than any other G8 country, making Canada the leader in fossil fuel financing. What is even worse is that Canada now provides 14 times more financing to fossil fuels than support for renewable energy. This is also marked against the fact that the oil and gas industry is unwilling to actually reduce emissions.
If we look to Alberta, where my people live in the Athabasca Chipewyan First Nation, Treaty 8, where the Alberta tar sands are, the absolute emissions from oil sands operations have more than doubled from 35 megatonnes in 2005 to 81 megatonnes in 2020. Despite their complete failure to curb their emissions, this industry is trying to market themselves as climate champions with things like the Pathways Alliance, where they are actually cutting corners and only counting scope one and two emissions, despite the fact that the UN High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities developed criteria that said they must claim one, two and three scopes or it is not actually countable.
The Pathways Alliance’s plan doesn’t even come close to what we need to achieve net zero, but even if they were to actually reduce their emissions, it would not be enough. We require more than just a reduction of greenhouse gases because the harmful impacts of the industry go way beyond the emitting of carbon pollution.
The industry has long been harming our communities and critical ecosystems. As the UN Convention on Biological Diversity has made clear, climate action is not just about reducing carbon. It is also about safeguarding critical ecosystems needed for climate stabilization. Our communities have been holding and safeguarding those spaces since time immemorial. The fossil fuels industry severely harms these ecosystems and is responsible for the degradation of human health and safety in our territories across the country. We’ve seen this with the recent Imperial spill.
Over the last few years along, Canada has spent an egregious amount of public money policing, surveilling and criminalizing Indigenous peoples who have been defending their lands by resisting unwanted oil and gas. Globally, Indigenous peoples bear the brunt of climate change, and we are also bearing the brunt of the drivers of climate change — the oil and gas industry.
I hope I made myself clear. Carbon emissions are just the tip of the iceberg of what needs to change about the oil and gas industry. We need to look at this through a climate justice lens. It is not just about economic risks and greenhouse gases. If we treat the situation as such, we will create the same problems again and again.
The industry is not even cleaning up its own mess. In the tar stands region, only 8% of the lands have been permanently reclaimed, as reported by industry, and only 0.1% has been certified reclaimed by the province. Not a single tailings pond has ever been reclaimed. We have countless abandoned wells and countless cases from Indigenous communities fighting against the destruction caused by this industry.
If there is any hope for climate action and reconciliation, the strong hold this industry mass over our country must end. A just transition must be led by Indigenous communities and not forced upon us by the oil and gas industry. Thank you, mahsi’cho.
[Translation]
The Chair: Thank you very much.
Senator Miville-Dechêne: This question is for Julia Levin.
You are very critical — in fact, extremely critical — of carbon capture and storage systems that are, however, supported and promoted by the federal government and industry as a necessary transition. This transition, by the way, is publicly funded.
On what exactly are you basing that criticism? Wouldn’t CO2 capture, use and storage be an improvement over the current emissions? After all, we’re talking about progress. Isn’t small progress better than no progress?
[English]
Ms. Levin: Thank you for the question.
When we can talk about carbon capture and storage, we can talk about different applications. Here, we are specifically talking about oil and gas, so that is my focus — not cement, not niche applications. Industries that align with a climate-safe future — we will still need cement. We will still need steel. We will still need iron in a decarbonized future, and maybe carbon capture has a role to play in those niche sectors.
But in the oil and gas sector, fundamentally, it prolongs our dependence on fossil fuels while, at best, dealing with 3% to 15% of life-cycle emissions. That means we are spending billions of dollars to put CCS infrastructure onto an oil refinery, and between 85% to 90% of the emissions will still be released into the atmosphere. That’s the reason that the IPCC actually ranks carbon capture for both energy and industry as the least effective and most expensive mitigation option.
When we as a country are deciding, like we are with the budget next week, where to put our dollars in terms of the transition to a decarbonized future, why are we putting most of our money into a technology that, first, isn’t a climate solution because it continues to keep us dependent upon the very thing we need to eliminate; second, doesn’t actually reduce emissions; and third, comes with a host of other risks for communities in the area? If you add carbon capture to an oil refinery, it actually increases the energy demands by up to 40% and all the other air and water pollutants increase by that 40% because we are only capturing carbon. So there are real impacts on those communities.
Second, if we were to build out carbon capture the way that Pathways Alliance and other oil and gas companies want, we need to duplicate the number of pipelines that currently exist for oil and gas. Those pipelines transport high-pressure carbon, which, when there are leaks, are extremely dangerous. Carbon dioxide is an asphyxiant. It is colourless and odourless, so you don’t know you are in harm’s way until it is too late. Because of the way the pipelines operate, the leaks can take over a large geographic area very quickly.
Canada only has one large carbon pipeline and a few smaller ones. In the U.S., there are more. We’re talking about thousands of kilometres versus hundreds of thousands for oil and gas infrastructure. There was a leak two years ago, and the whole community of 300 people had to be evacuated; 45 were hospitalized. We don’t have the regulatory system in place to deal with carbon capture yet.
So again, first, it’s not a climate solution; second, it comes with a whole bunch of risks; and third, it is a massive and irresponsible use of taxpayer dollars. If we were to have a strong cap on emissions from the oil and gas sector, and the oil and gas companies want to bank on carbon capture to meet regulatory targets — and then if it doesn’t pan out, they can ramp down and curtail production to meet those targets — that’s fine. They have vast profits. Let them spend their money on it. No one is saying to ban carbon capture. But let’s not put public dollars into it, and let’s not factor carbon capture into our climate targets because it will make it much harder to reach those targets if in 10 years from now, none of those projects are realized.
That’s the track record of carbon capture projects. This is not a new technology, as much as the oil and gas sector pretends it is. It has been around for 50 years. In that same time trajectory, we have seen renewable energy drop in profits and increase in its ability to produce energy. Carbon capture and storage have remained an expensive failure over the last 50 years.
[Translation]
Senator Miville-Dechêne: An advertising from the oil industry has been on television a lot claiming that the industry is helping achieve net zero. Now there’s a complaint before the Competition Bureau.
What do you think of this advertising, which is really quite positive?
[English]
Ms. Levin: That’s the “Clear the Air” Pathways Alliance ad campaign. Last week, Greenpeace filed a complaint with the Competition Bureau to investigate that advertising campaign as misleading. I was a signatory to that complaint, so I align with Greenpeace’s position here.
My colleague mentioned earlier that the UN has established the criteria on what greenwashing should be, and on every single count, Pathways Alliance’s net-zero plans are clearly greenwashing. There is no real plan to reduce emissions, and they don’t include all the emissions, as Ms. Deranger said. One of the conditions is also that you don’t lobby governments to weaken climate action. So on each account, it is clear that Pathways Alliance is responsible for greenwashing with these campaigns. That’s why even the former Minister of Environment, Ms. Catherine McKenna, also endorsed the complaint to the Competition Bureau.
Senator McCallum: Thank you for your presentations. I’m sorry I’m late. I was at another committee meeting.
In this transition out of oil and gas, what are the alternatives that you are considering or that you would put forward as good alternatives?
Ms. Levin: So we know exactly how we can go about replacing fossil energy with renewable energy. Solar and wind will deliver the most emissions reductions. We can run our economies or societies on solar and wind. We have to pair that with much better transmission, especially east-to-west transmission between the provinces, which will take a big lift.
There is also the issue of storage. We already have really good storage. Batteries have dropped 85% in price, but we have to continue developing our storage capacities, exploring things like pumped hydro and different kinds of storage.
The last big piece is energy efficiency — retrofitting homes and buildings and making our businesses more energy efficient. Doing that will allow us to virtually eliminate the use of oil and gas.
Those aren’t new solutions. They have been around over the last 20 years. The costs have plummeted and the capacity has grown, but the pathway is pretty well established for the lion’s share of emissions.
Senator McCallum: As a follow-up to that, there is a really fast transition toward electric vehicles. We’re looking at 2035, they think. I wanted to go back to hydro because I have a problem with oil and gas and the negative cumulative impacts to Indigenous communities, but I have the same concerns with hydro in that both impact Indigenous communities economically, environmentally and socially.
When we look at hydro, we’re now looking at Quebec and Ontario saying that with this push with electric vehicles, we’re going to need more plants. When you build new plants, the emissions are going to be just as bad as oil and gas at the beginning.
Do you think we are moving too fast without doing our homework of looking at alternative energies, including nuclear? It concerns me that if we get rid of oil and gas, we’re moving here and we haven’t done our homework. I don’t want the country to be in a mess just because we haven’t fully looked at this. We’re moving here, but where are we moving to?
Ms. Levin: I would say that we have the problem of moving too slowly. We know exactly what the solutions are, but where we have to be thoughtful and careful is working with communities on the ground to see what projects work in the local context.
The David Suzuki Foundation has created a great model, which I can share with the committee after, that shows how we can get our electricity to zero emissions by 2035 with solar, wind and geothermal, and not with massive hydro projects, but with some small-scale hydro projects. I would agree that the two big hydro projects happening right now, Muskrat Falls and Site C, were complete debacles and weren’t actually about transitioning. Site C, at least, was about feeding a liquefied natural gas project with electricity.
While the solutions are very clear and have been for a long time, we need to move on them quickly, and it has to be done with consultations at the local level. It must be done in a responsible way to make sure that we’re building the best projects for our communities. That’s why the Impact Assessment Act is so important.
It’s also very clear that the environmental impacts of renewable energy are nowhere close to the environmental impacts of fossil fuel infrastructure, even just from a mining perspective. It’s a 1 or 2% fraction of the level of mining that’s required for the fossil fuel industry — there is an interesting new study recently that I could pass along.
That’s why energy efficiency is so important. We have to be reducing our total — we’re going to need to increase our total electricity output because we do want to electrify everything, but we can do that in a way that is still considering energy efficiency to make sure that we don’t have to grow the grid by five or six times in order to account for those concerns. That’s why with things like public transit versus everyone having their own EV where it works — it doesn’t always work, but in cities it works — we have to find solutions that are equitable and socially just as well as sustainable. I hope that answers the question.
Ms. Hastings-Simon: I just wanted to add to and reflect a lot of the points that were raised there, but when it comes to electrification and replacement of fossil fuels by electricity, which is one of the main pathways to decarbonization when we think about replacing oil and gas, one thing to keep in mind is that many of the processes that are electrified are inherently more efficient.
If we look, for example, at moving from an internal combustion vehicle to an electric vehicle, significantly more of the energy that you put into that vehicle actually goes to moving the vehicle. In an internal combustion engine, only something like 20% of the energy in the gasoline actually moves the car forward, and that number is significantly higher in an electric vehicle where it can be upwards of 70%. When we look at the amount of energy that we have to replace, it’s important to account for that difference. So the challenge of the buildup and the scale up of electricity generation is not as large as it might appear from the outset.
Second, echoing what was said before, the potential to build out wind and solar, which are now the lowest-cost resources when it comes to pure energy cost, is very significant. Especially in regions that have quite a lot of hydropower already within their grid that can be used to balance the variability of resources like wind and solar, there is a very significant potential to grow the amount of wind and solar in a short period of time.
I was just reading a report this morning showing that the global rate of growth for solar has far surpassed the pace of growth that we ever saw for nuclear energy in the past. When we think about being able to add the electricity generation that we need in the short period of time that we need it, we should certainly consider a range of sources that provide decarbonized energy, but it will be hard to beat wind and solar when it comes to the pace of growth that’s required.
Ms. Deranger: Thanks, everyone, for your comments. I want to speak to what some of the energy systems are. Yes, the electrification of vehicles and moving toward solar and wind, but we also have to talk about the fact that Canada’s interprovincial and territorial electrical transmission infrastructure is becoming increasingly outdated and inefficient. These inefficiencies leave Indigenous communities vulnerable to the prioritization of urban and non-Indigenous communities, which in turn leads to continued disruption of Indigenous livelihoods.
Hydropower is also a very good factor in that. We have seen cases in Manitoba where massive hydro plants have been created to power urban centres where the impacts of the infrastructure are actually felt most directly by the communities. This includes the impacts to waterways, fishing, trapping, hunting and gathering, and the constitutionally protected rights of Indigenous communities are deeply impacted by these projects.
Before we start moving toward this full electrification and moving to these systems, we have to address both the outdated and inefficient grid systems and also the inefficiencies that have excluded Indigenous communities where we have seen energy deficits in our communities historically and how large-scale energy projects serve colonial settler communities before Indigenous communities.
If we are to move forward with a just transition strategy, we need to be working directly with communities that have been excluded from the existing energy systems and models, including oil and gas, and move toward developing solutions that are going to serve and uphold the rights of communities. This includes updating energy and transmission infrastructures to better serve our communities, as well as looking at projects that aren’t going to continue to violate and degrade the rights of our communities.
I also want to comment on the fact that with some of the new ideas for transitioning into new economies, we’re focusing on workers’ rights and the public’s rights, but aren’t talking about Indigenous rights. Indigenous rights need to be fully upheld. We are not a stakeholder; we are rights holders when it comes to developing new energy systems. That has been thoroughly diminished through the development of the Natural Resource Transfer Acts in the 1930s. We need to be re-evaluating how resources are developed provincially and nationally, and where Indigenous rights are intersected and upheld within the development of new transition energy models and strategies to meet the growing climate crisis.
Senator Arnot: Thank you.
My two questions that I would like to put forward are directed principally at Professor Hastings-Simon and Ms. Deranger. I don’t want to exclude Ms. Levin if she has some points, and I would have questions in the second round for her more specifically.
Professor Hastings-Simon, you talked about supporting workers and communities. My impression is that with the Government of Canada, some of the discussions are more focused on workers and jobs and not really focusing on the broad perspective of communities. We need to, in my opinion, expand community agency here. I’m wondering if you have some examples, good ideas or recommendations that the committee can use to engage communities in a much broader way, looking at social justice, equity and fairness in this transition.
With respect to Ms. Deranger, we have seen and you have mentioned the pollution of the lands in the Athabasca region and the pollution of the Athabasca water system. Do you believe that the Government of Canada has met the high standard of the fiduciary duty to Indigenous peoples in any of this work? Going forward, how do you see that high standard being met?
Also, do you believe that the honour of the Crown has been breached in the manner in which the Athabasca region has been treated, particularly in Treaty 8? With respect to Treaty 8, do you think that the treaty relationship needs to be implemented in a modern context in a much different way than it has in the past?
I just want to make it clear, I’m going to give you time to talk about this — a breach of section 35 of the treaty rights and Indigenous rights of Indigenous people in your region or in Canada generally.
How do you engage Indigenous people in a much more rigorous way on these very important issues that you’ve raised? Do you have some specific ideas and recommendations that this committee can make in our report on these issues? I would like to hear you answer that question.
I’m listening with rapt attention on what both of the witnesses might say about these issues. I would encourage you to follow up with written submissions, please.
Ms. Deranger: First off, I would like to address how to move forward with Indigenous communities. I believe there has been and continues to be breaches of section 35, the constitutional rights that protect the hunting, fishing and trapping rights of Indigenous peoples, and not just First Nations, but Métis and Inuit communities as well. There continues to be violations of Treaty 8. Absolutely, we need to be looking at not just Treaty 8 alone, though. What’s happening in Alberta is a very large and unavoidable circumstance, but the reality is we’re seeing this starting to pop up in the Ring of Fire, and we have seen this with the Elsipogtog with the fracked gas issues. We have seen this with the lobster fights and forestry.
Indigenous rights and Indigenous communities are not actively involved in developing economic, resource management within the provinces and the territories of this country. What happens is that we end up seeing fractures between the relationships of both the provinces and the federal government and Indigenous communities because of these violations of our rights that are the subsequent consequences of the provinces that are not jurisdictionally involved in upholding our rights — or not interested in most cases I should say — where they have deemed that the responsibility of the federal government.
But then we see this devolution of the fiduciary responsibilities of the province and the federal government to ensure that those rights are upheld. We have seen corporations actually being tasked with ensuring that Indigenous communities have been consulted and are up to date on the impacts of these projects.
Lastly, when it comes to projects, whether they are oil and gas or any other sector, communities only receive benefits if they can prove negative impacts, which is such a crazy idea. We don’t receive the same trickle-down benefits that provinces and municipalities get from the royalties received from industries and resource extraction. We only receive benefit if we’re impacted. So our communities are now caught in a cycle of proving that we are being harmed all the time. We only are valuable if we are harmed. This is a really negative narrative that needs to absolutely be changed.
We need to be looking at modern interpretations of treaty to ensure that our communities — our rights holders — are a part of determining not just just transition strategies for oil and gas, but energy systems, economic systems and education systems. We have seen this adopted in the child and family services sector, but we’re not seeing it in oil and gas.
We need to do some real deep digging including looking at what does an advisory body for just transition in this country look like to ensure that there is Indigenous representation and not just piecemeal representation — true representation — for the very vast areas where we’re seeing some of the most egregious violations of Indigenous rights, whether that’s the tar sands, the Ring of Fire, mega-hydro areas like Site C and so on.
Ms. Hastings-Simon: Thank you for the question.
When it comes to communities, I’ll start with the observation that all communities are different, and so I think part of the approach is really going into and working with a community to understand their given needs.
One experience that I’m more familiar with is the town of Hanna in Alberta, which is one of the communities that was impacted by the coal shutdown. There are some really interesting lessons there. I can pass on some material to share.
One of the lessons is really that widening the focus from simply the workers to the community as a whole and understanding how the economic changes are going to impact others within the community, whether that’s family structure where you had one parent going to work and one parent at home taking care of children and now, not only do you need to create an economic transition opportunity for the worker who is at work, but actually for that second family member who wouldn’t be necessarily captured under a very narrow definition of worker support because they weren’t working within the coal sector but they are very much impacted by the shutdown of the coal plant. That, again, is very broad in terms of thinking about support for retraining and, as I mentioned, access to child care.
But there are also broader impacts. I know that the region saw an increase in domestic violence near the beginning of the transition as well. So really that holistic picture and holistic approach is quite important.
The second thing we need to keep in mind is that support really needs to flow and it needs to flow quickly. Obviously, there is a need to be responsible with public dollars, but there seems to be a willingness to provide subsidies to industry at a pace and scale that we’re not willing to provide to communities. I would argue that’s actually really the reverse of government’s responsibilities where government’s responsibility should be first to the communities. There needs to be a shifting of the perspective of a willingness to provide those funds in a timely manner and to provide them in a way that can be flexible with, of course, care taken to ensure that they are used appropriately. But right now, I think we have the balance a little bit too much on locking down every single dollar that’s meant to support communities such that it’s really preventing progress there.
Then the last point, just to reiterate, I often think when we look at just transition, there is this tendency to focus on the energy sector and this idea that workers that are coming from the energy sector or communities that have been in the energy sector must be redeployed into the energy sector.
Part of that may come from the fact that we do need to transform our energy systems into energy systems that are decarbonized. That is one issue that we have in Canada, but the issue or the concern around just transition and creating positive economic opportunities doesn’t necessarily need to be connected to that one. In some cases, we may find workers that can find new careers within a new part of the energy system, but we should be thinking much more broadly. In other cases, it may make a lot more sense for them to find employment in other places.
Coming back to the town of Hanna, one of the things they saw there was a lot of entrepreneurship, so moving from workers working within an energy sector industry to a very different area and outside of the energy sector as well. We need to make sure that we’re not constraining ourselves to looking only within the energy industry is also very important.
The Chair: Ms. Levin, do you have something to add?
Ms. Levin: No, I think those points were — just on the point of public subsidies, where they could go and prioritizing companies over communities, just to put a fine point on it, in 2022, the federal government provided more than $20 billion in subsidies and supports to the fossil fuel sector. Think about what that could do for local communities.
Ms. Deranger: One more remark. On those subsidy remarks, again, $100 billion has been granted to the oil and gas industry to subsidize them. We are not seeing anywhere near that involving renewable energy or just transition, and when it comes to Indigenous rights within those sectors, at minimum, we need to establish a mechanism to identify and mitigate any adverse economic, social, cultural and environmental impacts that arise from policies in the net-zero strategies for this country.
We should also enable the responsible minister to ensure that any other federal legislation and plans advance the just transition. We can’t keep separating and isolating the different strategies and legislation in the government that are going to allow industry to access loopholes that allow them to continue to operate and increase greenhouse gas emissions in this country.
The Chair: If nobody has another question, I have a question.
I am so surprised about Ms. Deranger’s comments about you only receive compensation once you are impacted. Can you please, for my knowledge and to understand the situation, explain more about this situation?
Ms. Deranger: Yes. When it comes to natural resource development within the provinces, the natural resource transfer act which — the first was signed in, I believe, the 1950s — afforded the provinces with jurisdiction for the management of their natural resources including the negotiating and lease of lands for resource extraction. They negotiated the royalties and the benefits, and they have to pay a portion of that to the federal government. Indigenous communities have historically been excluded from the negotiations of resource development and the management of those resources and have not received direct benefits.
It wasn’t until the early 2000s, I believe, or the late 1990s through cases like Mikisew Cree First Nation v. Can. where we started to see Indigenous communities advocate for benefits from the industry. Instead of receiving direct royalties either from the federal government or the provincial government that were received from those industries, we had to enter into private propriety agreements with the corporations themselves called impact and benefit agreements.
These impact and benefit agreements are private agreements between the corporation and the First Nations that outline the impacts that the industry has on us, and then the compensation agreement is negotiated to sort of offset those negative impacts. This is a standard practice across the country in almost every single resource extraction operation that we see right now. We don’t have a modern system that allows communities to receive direct royalties.
Again, these are private propriety agreements that are not public and many of them over the years have read as bribery or silencing documents meaning that if you sign onto this agreement, you cannot speak badly about this corporation and this industry. We have seen this in the tar sands, in the forestry industry and in almost every sector. You sign an agreement and get a payout immediately of X millions of dollars, but that means that you are bound to be silent and if you have any issues, you take it to the corporation first.
This is absolutely a failure of the federal government and the provincial government’s fiduciary responsibilities to uphold the rights of communities.
The Chair: I will appreciate if you can send anything that you have written or papers and articles on that. Thank you so much.
Ms. Deranger: Yes.
The Chair: We are at the end of our second panel. Again, thank you so much for your attention and being with us. With that, I will adjourn our meeting.
(The committee adjourned.)