Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Rachel Notley’s Speech to Investors

with 3 comments

Like many people sick of conservatism, I was greatly encouraged by the recent change in the government of Alberta. The victory there of the NDP after so many years of right wing domination seemed like a breath of fresh air.

The disappointment I am currently experiencing is visceral. Premier Rachel Notley spoke to the Stampede Investor Forum on Tuesday “her first major (private) speech to an industry crowd, two months after her New Democrats won.”

…it’s the oil sands that have really emerged as our international showpiece.

For more than half a century, Albertans have been coming up with unconventional solutions for an unconventional resource so we can extract, handle and ship it responsibly, to the very best of our abilities.

This attitude of pushing the limits of what’s possible influences every aspect of the oil sands, from research and development to environmental management to the service and support fields.

It’s a tremendous asset which has transformed Alberta into one of the world’s leading oil producers.

And I’m here today to emphasize that the province has a government determined to defend this advantage, by being constructive at home, and by building relationships around the world.

…Alberta will continue to be a healthy place for private investment under our government.

This definitely applies to energy.

Expanding existing oil sands projects, establishing new ones and pioneering advanced technologies — all this requires spending on a large scale.
Under our leadership, Alberta’s abundant oil and gas reserves will remain wide open to investment.

MacLeans has “the premier’s prepared text at the forum cosponsored by her government, Calgary Economic Development and the Canadian Association of Petroleum Producers, the industry’s main megaphone.”

I have been regularly berated by NDP supporters who claim that the Green Party is “splitting the progressive vote”. I will now quote this speech to anyone who dares to claim that the NDP and the Green Party share the same values.

Humanity is rapidly approaching  an existential crisis. If we are to have some impact on the increase in greenhouse gas emissions we have seen in recent years, then it is essential that fossil fuel consumption starts to decrease. It is not enough that some renewable energy sources have been increasing. These sources have to replace fossil fuels, not supplement them. We have to reduce our carbon footprint. In Canada that means the tar sands – one of the dirtiest forms of energy – must be left in the ground. We simply cannot follow a path that sees exports of diluted bitumen as a way to make short term profits at the expense of a habitable planet. We cannot plan to increase exports of coal or LNG either. Which, by the way is nothing like the clean fuel that Christy Clark likes to pretend (see: Methane Emissions in Texas Fracking Region 50% Higher Than EPA Estimates)

Of course I want to see Stephen Harper unseated at the upcoming election. If the NDP is really serious about its intentions to lead the next federal government, it would be making overtures to the Liberals to create an anti Conservative electoral pact. It is simply not good enough to hope that a coalition can be formed after the election. But that seems to be their current strategy. I do not think that the Liberals can be seen as “progressive” given the way that Paul Martin ran a more conservative than the conservatives economic strategy. And Trudeau Junior does not seem to me to be nearly as committed as his father – to anything at all! But he sure would like to be elected. And will say anything at all to make that possible.

And to those that still think that somehow the economy trumps the environment I can only say that they are just not paying attention. Renewable energy is showing itself to be a significantly better investment in terms of local employment – even if you disregard the huge environmental benefits. You also need to be blind to the current impacts of less than 2C of warming that we are currently experiencing. If you think long hot summers with droughts and forest fires are bad now,  I feel certain that what we are seeing now will seem mild in comparison to what is coming. The loss of the bees and the salmon seems to be getting some attention too. About time.

Notley again

“the energy sector needs stability to keep Albertans employed and to innovate as it confronts climate change.”

Which seems as usual to be pinning her hopes on the elusive carbon capture and storage which has always been  just around the corner – and always will be. At least Alberta is also a leader in wind energy – the Calgary LRT already runs exclusively on wind power. They will probably be beating us in solar panels and geothermal too, given the miniscule attempts being made in BC and our foolish commitments to Site C and run of the river.

Calgary Transit C Train

Pincher Creek

Afterword: and the BC NDP is no better.

Screen Shot 2015-07-13 at 11.24.27 AM

The LNG in question would be produced from fracking. Fugitive methane from fracking makes it worse from the GHG perspective than coal. BC LNG is unlikely to be cost competitive for the export markets it is aimed at: the Chinese, for example, have already signed a deal for Russian gas at a price BC could never match let alone beat. But if the BC NDP wants to claim it cares about the environment it cannot at the same time support more fracking for gas here.

Written by Stephen Rees

July 10, 2015 at 11:35 am

3 Responses

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  1. I’m disappointed, but not surprised. Many previously Wild Rose supporters wound up voting NDP. Notley’s no dummy and knows where her support comes from. This is Alberta, after all, and it will take more than a single election for people to start voting against their historic cash cow. Another thing to remember is that Alberta NDP is *not* the Federal NDP.

    Andrew Eisenberg

    July 12, 2015 at 8:55 pm

  2. As and ex-Albertan I too was much encouraged (actually ‘stunned’ is a more accurate term) by the surprise election of the NDP. This was literally a monumental seismic event politically speaking, like electing social democrats in Texas. Vote splitting was a factor as was the apparent arrogance of the ruling party, and the ultra-conservative Wildrose Party now forms the opposition after the PCs and I suspect the NDP will find it difficult to win a second term.

    Having said that, the NDP win was a reflection of the changing demographics of Canada with a more liberal-minded youth, and some serious discomfort about the effects of climate change now manifesting themselves. The 2013 Calgary flood was extremely damaging, ironically stabbing deep into the heart of the seat of power of conservative Big Oil. It’s vast power shut down the corporate banking and petroleum office towers for weeks. It took eight months to clear the storm drains. The damage is still evident and thousands of people were displaced and have never recovered financially. The cluster of storms have been linked to the stationary Rossby waves that cause the jet stream to “lock” low pressure cells into one location due to the warming Arctic Ocean, and that one hurled storm after storm against the eastern slope of the Rockies where they unloaded torrents of rain onto still-frozen ground. That was my old home town, and it hurt to see the raging torrent on TV tearing up neighbourhoods I knew well, then see first hand the damage over four post-flood trips there where rich and poor, old and young regardless of their political leanings. I used to float down the Elbow River on inner tubes as a kid. It was calm in June when I went there to bid a dying mother goodbye, but you could see the billions in bank repair, storm outlet re-engineering and the vacant lots where houses once stood. No one seriously denies climate change there any more. I am will be happy to say goodbye to Alberta once I attend one last funeral in August and I can sever my last major tie to Calgary.

    The NDP have traditionally been the party of labour unions and I really am not at all surprised to hear of Notely’s support of jobs and economic growth, although it is misplaced in last century models. The party has yet to come fully to terms with environment, though it is certainly light years ahead of conservatives. It I evident that politics in Alberta will not hinder tar sands growth. What will, though, is the international price of oil. Demand in China has gone down with their slower growth and increasing debt, and this appears quite deep-seated. Most tar sands operations require about $75 a barrel to break even. Considering the long lead times to plan, finance and build new plants, today’s fairly stable $55/barrel prices will not permit further expansion, and some operations will start to close down if prices don’t go up much. Then there are international efforts to make carbon more costly, the latest being an imperfect deal for carbon trading reached between California, Ontario and Quebec, a conglomerate representing 50 million people. In any case, this will add to the price of oil. Though conventional oil peaked in 2005 then again in 2014, there is currently a glut created by US frackers who need to keep drilling and pumping just to pay their creditors, and the lower demand in China. This is probably a good time to take a time-out and reconsider energy in Canada.

    Though the NDP are not as advanced as the Greens on environmental issues, they are the only leftist party in Alberta now able to get elected. I surely hope they can hang onto it. And though they are not putting up roadblocks to tar sands expansion, they are the only party seriously considering shutting down Alberta’s coal fired power plants and replacing a few of them with natural gas, not ideal but a measurable improvement and hopefully a transitional step toward renewables. And they do support renewables, notably wind, and public transit. Should they lose favour with Albertans after one term (a very possible scenario), then it will be the climate change deniers of the Wildrose Party taking over in four years, not the Green Party. There is the admirable act of voting on principle and conscience, but then there is also pragmatic strategic voting to keep the barbarians out and to avoid having every environmental gain erased at the stroke of a petroleum-financed pen. One day the Greens may very well supplant the NDP and/or the non-BC Liberals, but until then there is indeed the plain fact of vote-splitting which is deadly in a province where 2/3rds of folks exist on the right side of the ledger.

    MB

    July 13, 2015 at 5:56 pm

  3. Jeff Rubin, former chief economist with CIBC and author of a book on peak oil (his prognostications seem to have got him fired a few years back), has been looking at the tar sands from both an environmental and economic point of view. Though he made the egregious error of predicting an oil price of $225 a barrel just before the 2008 meltdown (it tapped out at $148/bl and was the tipping point that caused a cascade of economic cards to fall and created the recession), he is more careful now and sees a long, rocky road ahead for the tar sands and economies that base themselves on finite resources like oil.

    There are those who think that the tar sands can and should be shut down tomorrow. The environmental movement would cheer while the corporations would blast the lawmakers, and both would print competing editorials the next morning. I would cheer too. But shutting them down would present an enormous problem to the public with stratospheric cleanup costs in the absence of tax or private revenue to fund it. Rubin has an interesting take on how the economics will deeply affect their ability to continue operating:

    […]

    The tailings ponds full of toxic sludge that dot the landscape around Fort McMurray won’t just disappear on their own. Nor will the towering stacks of sulphur. Anyone who’s visited an oil sands mine has seen the industrial wasteland that’s replaced what was once a pristine boreal forest. When the oil sands shut down, all of the land must be reclaimed and the contamination cleaned up. That ain’t cheap.

    Who will be on the hook for those costs? In theory, oil sands operators are required to pledge financial security to pay for future reclamation costs as they build new mines. In practice, the money, which accrues in Alberta’s Environmental Protection Security Fund, is a fraction of what will eventually be needed. A Pembina Institute study from 2009 estimated the costs to reclaim what was then 686 square miles of oil sands developments and 170 square miles of tailings ponds would run as high as $15 billion. At the time, the fund held $820 million. Since then, the size of the fund has doubled to $1.6 billion. The amount of land affected, of course, has also grown considerably. If Albertans aren’t already asking who will pick up the tab when the party’s over, then they certainly should be.

    The province that Premier Notley just inherited has a badly tarnished international image. As much as she may want to recuperate its reputation she may soon have much more pressing worries right at home. The economic signposts suggest that time is running out on the oil sands as a viable business model. Once mines start being decommissioned, Alberta will find itself in the nasty double bind of watching oil royalties shrink at the same time as it will need to scrounge up billions to pay for the mess the industry has left behind.

    http://www.jeffrubinssmallerworld.com/2015/06/30/albertas-emission-regulations-a-welcome-step-with-unclear-results/

    Rubin has recently published another book on how climate change may well force the Canadian oil economy into a bind with prices either too low or too high, but will also present opportunities. He thinks that agriculture will be far more important to the economy in future as the northern prairies will be able grow more varieties of food crops. I haven’t read it yet, but he may be on to something. There is a measured increase in northern agricultural production during the growing season due to the significant amount of increased sunlight. Site C on the Peace River occupies the top three classifications of soil and is at 56 degrees north latitude where several additional hours of sunlight forces plants to grow more. Even slightly gentler winters and moderately-extended growing seasons will make a huge difference in overall production, especially as we move toward far more diversified market gardens surrounding our own cities as California agriculture fails due to drought. Solar greenhouse production doesn’t have to occupy land with highly-productive soils and coupled with plant science to breed drought and flood-resistant crops, it may be possible for us to produce our own food year round and sever today’s exceedingly long and tenuous food supply chains. This is a matter of food security, not just the development of a stronger agricultural industry and export economy not based on finite resources.

    MB

    July 14, 2015 at 10:03 am


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