Stakeholders change Oil and Gas Investment

 

The Oil and Gas industry is dealing with stakeholder reluctance to invest in future oil and gas developments in Canada.

Looking at gas and oil investment

 

Emma Grane and Jeffrey Jones reporting in the Globe and Mail, write that  Royal Dutch Shell PLC, Exxon Mobil Corp. and Chevron Corp. were recently handed significant defeats over their approaches to fighting climate change. Canada’s Suncor Energy Inc. announced a long-awaited target to achieve net-zero emissions by 2050 that put the oil sands producer’s ambition in line with the federal government’s commitment under the Paris Agreement.

Shareholders – including the world’s largest fund managers – are also forcing companies to account for, and deal with, the risks they face in the global transition to cleaner energy sources. Suncor Energy aims to cut emissions by more than one-third while boosting oil production “Obviously, there’s an enormous amount of attention focused on how we move forward,” Mark Little, Suncor’s chief executive officer, said in an interview. “I think it actually says people are wanting energy companies and oil producers to be part of the solution, and, quite frankly, I think there’s a lot of wisdom in that. “The oil industry globally deploys enormous amounts of capital, it has massive technical project execution and operational capabilities, so it’s hard for me to envision how the world actually achieves its ambition without industries like the oil industry participating in the energy transition.” Suncor’s net-zero plan comprises strategies to meet an interim target of cutting emissions by 10 megatonnes a year by 2030. They include adoption of carbon capture, use and storage; production of low-carbon fuels and hydrogen; fuel switching in its oil sands operations; and renewable power generation, including wind energy. Importantly, Suncor is setting company-wide CO2 targets rather than intensity goals. That’s a departure from most of its Canadian peers, which measure their emissions per barrel produced.1

Nick Wells of the Canadian Press reports in the Globe and Mail that a First Nations group criticizes Woodside Petroleum’s move to sell its Kitimat LNG stake. Woodside Petroleum Ltd., an Australian company, says it plans to sell its 50 per cent stake in the 480-kilometre Pacific Trail Pipeline and the proposed LNG facility at Bish Cove.

The First Nations Limited Partnership, which represents 16 First Nations in northern B.C., says the decision to sell is both disappointing and poses a threat to its members’ commercial interests. Woodside’s announcement comes after Chevron Canada Ltd, the operator of the project, said earlier this year that it would stop funding further feasibility work on the project. The company put its interest up for sale in December 2019, but has failed to find a buyer.2

The risk associated with investment in oil and gas in Canada is connected to the need to reduce greenhouse gas emissions in line with IPCC recommendations and IEA plans to achieve global temperature targets.

 

References

1	(2021, May 26). Big Oil loses carbon emissions showdown in landmark case - The .... Retrieved May 27, 2021, from https://www.theglobeandmail.com/business/article-canadas-oil-industry-on-watch-after-dutch-court-orders-shell-to-cut/
2	(2021, May 21). First Nations group criticizes Woodside Petroleum's move to sell .... Retrieved May 27, 2021, from https://www.theglobeandmail.com/business/industry-news/energy-and-resources/article-first-nations-group-criticizes-woodside-petroleums-move-to-sell/

 

Engineering Work Plan for Climate Emergency

 

Putting Canada on the path towards meeting our Paris Agreement GHG emissions reduction target of 30% below 2005 levels by 2030 is a task that will require enormous engineering effort  calculating the Social Cost of Carbon (SCC) and in the construction of infrastructure to mitigate the effects of Greenhouse Gas emission.

Engineering mitigation of GHG effects

 

  Marieke Walsh writes in the Globe and Mail that Environment Minister Wilkinson says that 2019 will be the last year of emission increases in Canada. The highest emitting sectors in Canada (oil and gas and transportation) are the ones that Mr. Wilkinson said he will be most focused on in the years ahead. 

On transportation, Mr. Wilkinson said emissions can largely be cut through regulatory changes that will target vehicle fuel efficiency. He said in his talks with Mr. Biden’s special envoy for climate, John Kerry, the focus is on “how fast can we go in terms of raising the level of ambition” on fuel economy standards. More investments in zero-emission vehicle infrastructure will also be needed, he said. On the oil and gas sector, Mr. Wilkinson said the increasing stringency of methane regulations will “start to bite” and the pending implementation of the clean fuel standard will also have a “significant impact on emissions.” Raising the carbon price to $170 a tonne by 2030 is the key reason why Canada can show that it will meet its emissions targets in less than a decade.1

An article in The Economist proposes this is the moment for an ambitious attempt by President Biden to deal with climate change and move America to less carbon and blackouts. Biden has said that he wants fossil-fuel emissions from power generation to end by 2035 and the economy to be carbon-neutral by 2050. America is not just the world’s second-largest emitter, but also a source of climate-related policy, technology and, potentially, leadership. What is about to unfold in Washington will set the course in America for the next decade—and quite possibly beyond.

Time is pressing. Neither Mr Biden nor his successors may get a second chance to recast policy on such a scale. Global emissions from fossil fuels and cement production in 2019 were 16% higher than in 2009. It will be even harder to limit climate change to less than 2°C above the pre-industrial level, the global threshold from which America’s target for 2050 comes. To be carbon neutral, the world must curb emissions by 7.6% a year for a decade, a steeper decline than in 2020, when covid-19 cut demand for oil and coal. For America, delaying action to 2030 would nearly double the cost of reaching net zero or, more likely, mean it overshoots its targets. Yet there are grounds for hope. Although the Republican Party is against almost all action, voters are increasingly alarmed by climate change. Two-thirds of them think the federal government is doing too little about it, and that share includes plenty of younger Republicans. Although the fossil-fuel lobby remains powerful, many Republican business donors want more action—partly because asset managers are urging firms to align their strategies with the net-zero world Mr Biden envisions. Most encouraging of all, the costs of power from wind and solar have plunged by 70% and 90% over the past decade. Along with cheap gas, this has already helped America decarbonise at an impressive rate, despite Donald Trump’s rolling back of fossil-fuel regulations. Price has not been the only factor; more than half of the states have some sort of clean-energy mandate, a device that Mr Biden wants to introduce on a national scale.2

The Canada Department of the Environment and Climate Change reported on Greenhouse gas sources and sinks in 2020. Emission increases since 2005 in the oil and gas and transportation sectors have been offset by decreases in electricity and heavy industry.

After hovering between 700 and 720 megatonnes of carbon dioxide equivalent (Mt CO2 eq) in recent years, in 2018 (the most recent annual dataset in this report) Canada’s greenhouse gas (GHG) emissions increased to 729 Mt CO2 eq. This increase is attributed to higher fuel consumption for transportation, winter heating and oil and gas extraction. Over the long term, Canada’s economy has grown more rapidly than its GHG emissions: the emissions intensity for the entire economy (GHG per Gross Domestic Product [GDP]) has declined by 36% since 1990 and 20% since 2005. Emission trends since 2005 remain consistent, with emission increases in the Oil and Gas and Transportation sectors being offset by decreases in other sectors, notably Electricity and Heavy Industry. The Pan-Canadian Framework on Clean Growth and Climate Change (adopted in 2016) puts Canada on the path towards meeting our Paris Agreement GHG emissions reduction target of 30% below 2005 levels by 2030. The Framework is a comprehensive plan to reduce emissions across all sectors of Canada’s economy, stimulate clean economic growth and build resilience to the impacts of climate change. Canada is committed to continue implementing the Framework, while working to exceed its 2030 emissions reduction goal, and developing a plan to achieve net-zero emissions by 2050.3

Breach Media reports on a committee formed by the Canadian Association of Petroleum Producers ( CAPP ) and Canadian Government representatives named “Create the Path Table” to discuss regulations and creating “opportunities” post-pandemic.  Themes for discussion included advancing offshore projects in Atlantic Canada and tar sands projects in Western Canada, “cooperation in building investor confidence,” and “government industry collaboration to strengthen energy trade” with the United States.

 There was discussion of “emission reducing technologies,” hydrogen energy, and carbon capture and sequestration—several proposals promoted by oil companies that have been widely panned as false solutions perpetuating fossil fuel use. “Canada’s LNG” is referred to as an “opportunity” for the country’s climate plans, even though scientists have concluded that liquified natural gas is in fact a carbon-intensive fuel that needs to be phased out. CAPP “greatly appreciated” government engagement with industry. The oil lobby’s focus on Natural Resources Canada appears to have paid off.  In June, O’Regan announced that the government would exempt offshore drilling in Newfoundland and Labrador from federal environmental impact assessments. In September, he announced a $320 million public handout with no strings attached to Newfoundland’s offshore oil industry. That same month, O’Regan began echoing the CAPP’s talking points by touting LNG as the answer to the climate crisis and a key part of the Liberal’s “green recovery” agenda. Soon after, he reassured CEOs from Husky and Suncor that the federal government “cannot achieve Net Zero without our oil and gas sector” and that any economic recovery would involve “continued exploration” for oil off the east coast, according to a memo obtained by Greenpeace.4

Mitigation of the effects of the climate emergency on Canada is an enormous engineering challenge that will require government support of research, training, design and construction of infrastructure that meets the IPCC goals on emission reduction and supported by SCC calculations.

 

References

 

1	(2021, April 12). 2019 will be last year of emission increases in Canada, Environment .... Retrieved April 13, 2021, from https://www.theglobeandmail.com/politics/article-canadas-last-year-for-emissions-increase-was-2019-jonathan-wilkinson/
2	(2021, February 20). How America can rid itself of both carbon and blackouts | The .... Retrieved April 13, 2021, from https://www.economist.com/leaders/2021/02/20/how-america-can-rid-itself-of-both-carbon-and-blackouts
3	(2021, January 19). Greenhouse gas sources and sinks: executive summary 2020 .... Retrieved April 13, 2021, from https://www.canada.ca/en/environment-climate-change/services/climate-change/greenhouse-gas-emissions/sources-sinks-executive-summary-2020.html
4	(2021, April 13). Oil lobby, Trudeau government formed secretive committee during .... Retrieved April 13, 2021, from https://breachmedia.ca/oil-lobby-trudeau-government-formed-secretive-committee-during-pandemic/

Where the GHG comes from

 

The Economist offers a brief on Joe Biden’s climate-friendly energy revolution and what it will take to fight rising temperatures.

https://www.economist.com/img/b/800/420/90/sites/default/files/images/print-edition/20210220_FBC760.png   

 

Despite having played a key role in the negotiations which produced the Paris agreement in 2015—an agreement that it is rejoining on February 19th—America has to date offered no comprehensive outline of the goals and strategies it will use to tackle greenhouse-gas emissions which, in 2019, were equivalent to 5.3bn tonnes of carbon dioxide.

 

Those emissions declined in 2020 by a staggering 9%, according to estimates from Bloombergnef, a data provider. But as the economy recovers they will bounce back quickly1.

 The United States  benefit from wide plains and long coasts for wind power, ample sunshine for solar farms across the South, rich forests to act as carbon sinks, expanses of land for producing new energy crops and well-understood reservoirs where emissions might be stored. It has magnificent human resources, too, and a history of rising to challenges, even if it sometimes needs a wake-up call to do so.

 

References

1(2021, February 20). Decarbonising America - Joe Biden's climate-friendly energy .... Retrieved April 5, 2021, from https://www.economist.com/briefing/2021/02/20/joe-bidens-climate-friendly-energy-revolution

 

Canada an environmental outlier

 

In an opinion piece in Macleans, Tom Mulcair details how Canada became an environmental outlier.

Need to Act

He comments that  Justin Trudeau and Peter MacKay represent the same generation—one that has failed on the environment. He gives the last word to McGill Ph.D. student Christopher Orr, who does represent the next generation.

 The last word to McGill Ph.D. student Christopher Orr, who does represent the next generation. “The global ecological crisis, characterized by climate change, sea level rise, ocean acidification, a sixth mass extinction, promises an even more deeply unsettled time than previous periods,” he wrote in his thesis. “These changes threaten to destabilize global and local systems through mass displacement and migration, conflict and war, and disruption of agriculture, food and water provisioning, energy systems, transportation, and supply chains. The current situation presents a unique opportunity to deal with underlying tensions and trade-offs between the economy and the environment, and to bring about a better world.”1

Moira Warburton writing for Reuters, reports that the last fully intact ice shelf in Canadian Arctic has collapsed.

 “This was the largest remaining intact ice shelf, and it’s disintegrated, basically,” Luke Copland, a glaciologist at the University of Ottawa who was part of the research team studying the Milne Ice Shelf, said.

The Arctic has been warming at twice the global rate for the last 30 years, due to a process known as Arctic amplification. But this year, temperatures in the polar region have been intense. The polar sea ice hit its lowest extent for July in 40 years. Record heat and wildfires have scorched Siberian Russia.

Summer in the Canadian Arctic this year in particular has been 5 degrees Celsius above the 30-year average, Copland said.2

David Suzuki, with contributions from Senior Editor and Writer Ian Hanington, comments that a four-day workweek can spur necessary transformation in society. Life isn’t about making more money so we can keep buying more stuff; it’s about having time to do things that enrich our lives. In the face of multiple crises — pandemic, climate and biodiversity — we need to consider new societal and economic ideas that promote human well-being and help us live within Earth’s limits, rather than endlessly chasing a consumerist dream based on the illusory premise that a finite planet can support endless growth.

Sea level rise 

It shouldn’t be that difficult this time, as advantages to business and industry are as great as those to individuals and society. And the need for change has never been more evident. Let’s take the first step to new ways of working by adopting a four-day workweek now!

 

Transforming work-life balance through a well-being lens can lead to significant health benefits, contribute to gender equality, improve work redistribution and have important environmental benefits. Rethinking how we work is crucial, and a four-day workweek, guaranteed sick days, minimum vacation time and greater flexibility are good steps toward making work better for people and the planet.

The four-day week is becoming especially popular as people consider a post-pandemic world. That’s because it works. Utah gave its government workers a four-day workweek from 2007 to 2011 (it ended with a change in government), and concluded it saved $1.8 million in energy costs within the first 10 months and reduced greenhouse gas emissions by about 10,900 tonnes a year.

A University of Liverpool brief on how the city can respond to the COVID-19 crisis confirmed the benefits of working four days, in part by looking at European nations that have reduced work hours. The researchers caution that governments and unions must help ensure that overall wages and living standards aren’t reduced, and that “productivity gains from advances in fields like automation are distributed amongst the workforce rather than amassed by the owners of machines.”3

Our recent history has been one of slow acceptance of the need to change our approach to the environment and the challenge of climate change. A four day work week is one adaptation that promises to reduce the frequency of events like the collapse of ice shelves in the Arctic.

 

References

1	(2020, August 5). How Canada became an environmental outlier - Macleans.ca. Retrieved August 6, 2020, from https://www.macleans.ca/opinion/how-canada-became-an-environmental-outlier/
2	(2020, August 7). Last fully intact ice shelf in Canadian Arctic collapses .... Retrieved August 7, 2020, from https://globalnews.ca/news/7256706/canadian-arctic-ice-shelf-collapse/
3	(2020, August 4). Four-day workweek can spur necessary transformation .... Retrieved August 7, 2020, from https://davidsuzuki.org/story/four-day-workweek-can-spur-necessary-transformation/

 

Optimism and Opportunity for Climate Change Action

Christiana Figueres, head of the UN climate change convention that achieved the Paris agreement in 2015, writes in The Guardian that lockdown won’t save the world from warming, but the pandemic is an opportunity to pursue a green economic recovery.

Effects of warming ocean

The scale of the recovery package stimulus will shape the contours of the global economy over the next decade, if not longer. Climate scientists have warned global emissions will need to be cut by half, in the next decade, in order to reach a sustainable trajectory. Rescue packages should not recover the high carbon economy of yesterday, but help us build a healthier economy that is low on carbon, high in resilience and centred on human wellbeing.

 The case for rebuilding our economies in line with environmental targets has broad public support. A recent poll from Ipsos Mori shows that 71% of the global population understands that climate change is as at least as serious a crisis as Covid-19, and 65% think the former should be prioritised in the economic recovery. This is not only in industrialised countries that can more easily afford to green their economies; 81% of the citizens in India and 80% of people from Mexico were also strongly in favour of a green and healthy economic recovery. 
One of the first institutions to call for this dual approach was the International Energy Agency, which will publish a report this month detailing policies that governments could adopt to chart the course of recovery while decarbonising their economies. Meanwhile the International Monetary Fund is not only advising that fiscal stimulus packages should be based on green measures, but going as far as recommending scrapping fossil fuel subsidies and taxing carbon.1

The Ted Radio Hour Podcast observes that in the past few months, human beings have come together to fight a global threat. In this podcast, TED speakers explore how our response can be the catalyst to fight another global crisis: climate change.

 Guests include political strategist Tom Rivett-Carnac, diplomat Christiana Figueres, climate justice activist Xiye Bastida, and writer, illustrator, and artist Oliver Jeffers.2

A video on the website of Clean Energy Canada is a discussion with Christiana Figueres on Canada's position in the global clean energy transition. In conversation with Clean Energy Canada’s Merran Smith, Figueres—widely recognized as an authority on the global clean energy transition—shared her perspective on Canada’s standing and future prospects in that transition.

 She acknowledged that Canada’s historic reliance on fossil fuel exports represents a unique hurdle in building a clean economy.3

This TED talk by Christiana Figueres looks at the inside story of the Paris climate agreement. What would you do if your job was to save the planet?

 When Christiana Figueres was tapped by the UN to lead the Paris climate conference (COP 21) in December 2015, she reacted the way many people would: she thought it would be impossible to bring the leaders of 195 countries into agreement on how to slow climate change.4

The opportunity to pause and reflect on the world situation offered by the slowdown of the Covid-19 lockdown allows the optimism of many of those concerned about the effects of climate change on the planet, we leave to children and grandchildren, to inspire us to act to drive political policy to a “new normal” of care for people and the planet.

References

1	(2020, June 1). Covid-19 has given us the chance to build a low-carbon future .... Retrieved June 8, 2020, from https://www.theguardian.com/commentisfree/2020/jun/01/covid-low-carbon-future-lockdown-pandemic-green-economy
2	(2020, May 22). Climate Mindset : NPR. Retrieved June 8, 2020, from https://www.npr.org/2020/05/21/860307097/climate-mindset
3	(n.d.). Video: Christiana Figueres on Canada's position in the global .... Retrieved June 8, 2020, from https://cleanenergycanada.org/video-christiana-figueres-cem8/
4	(2017, April 14). Christiana Figueres: The inside story of the Paris climate .... Retrieved June 8, 2020, from https://www.ted.com/talks/christiana_figueres_the_inside_story_of_the_paris_climate_agreement/discussion

Gaps in our path to mitigate climate change

The efforts to reduce GHG emissions are undertaken to decrease the rate at which the temperature of the planet is increasing.

Temperature rising

Nicole Mortillaro of the CBC reports that the Earth is set to warm 3.2 C by 2100 unless efforts to cut emissions are tripled according to a new UN report. The United Nations Environment Programme (UNEP) released its annual Emissions Gap Report on Tuesday — 168 pages, compiled by 57 leading scientists from 33 institutions across 25 countries — calling on governments to act immediately, within the next decade, to limit global warming to 1.5 C or 2 C by 2100.

Some key highlights from the report include:
Greenhouse gas emissions (GHG) have increased 1.5 per cent annually over the past decade. By 2030, annual emissions need to be 15 gigatonnes of CO2 lower to reach the 2 C goal, and 32 gigatonnes lower for 1.5 C. GHG emissions have to drop by 2.7 per cent per year from 2020 to 2030 for the 2 C goal, and by 7.6 per cent per year for the 1.5 C target.To reach these goals, efforts must increase at least fivefold for the 1.5 C goal and threefold for the 2 C.Of the G20 nations, of which Canada is one, only five countries have committed to Nationally Determined Contributions (NDC) set out in the Paris Agreement, which outline each country's efforts to reduce national emissions to limit global warming to 2 C below pre-industrial levels.
Canada has not committed to a target that is in line with this scenario.1 

Another report by Climate Analytics, released for the UN Secretary General’s Climate Action Summit, shows how fast coal needs to be phased out in order to meet the objectives of the Paris Agreement, in light of the latest science from the Intergovernmental Panel on Climate Change (IPCC).

No fossil fuels 

It also assesses whether the efforts to reduce coal use in electricity generation since the adoption of the Paris Agreement put us any closer to a pathway consistent with its 1.5°C limit.

 Key messages

Although the new coal pipeline shrunk by 75% since the adoption of the Paris Agreement, cancelling new coal is nowhere near enough to meet its 1.5°C limit Phasing out coal from the electricity sector is the single most important step to get in line with 1.5°C Governments are not on track to phase coal out of the electricity sector in line with the 1.5°C in the Paris Agreement To get on a 1.5°C pathway, they will need to introduce effective regulation to shut down coal plants before the end of their technical lifetime and to significantly limit their use in the meantime, and refrain from building new coal capacity It is critical that governments significantly scale up their NDCs by 2020. The new pledges must include clear commitments to phase out coal, remove subsidies for fossil fuels, and build support for renewables and energy efficiency2

Ralph Torrie of Torrie Smith Associates has prepared a new report that provides a 'pathway' to get Nova Scotia off coal by 2030.

Nova Scotia off coal path

Jack Julian of CBC News quotes the Ecology Action Centre 'We've known that this is technically possible for a long time.'

 This would include:
"Deep-energy retrofits" for 80 per cent of homes and commercial buildings, which would help reduce power consumption by seven per cent of current levels. Forty per cent of personal vehicles being either fully electric or plug-in hybrid cars. Doubling the province's wind power capacity.Increases in solar power. Building a second transmission link to New Brunswick, which would allow greater reliance on hydro power from Quebec. Torries said the cost of making these changes and the corresponding savings would almost net out.3

Continuous improvement is an engineering and economically sound strategy to combat the climate emergency.

Transportation is the largest source of carbon pollution in the U.S., but it doesn't have to be that way.

 Carmakers have proven time and time again that they are fully capable of making their vehicles cleaner and more fuel efficient. The government just has to ask them. Energy expert Hal Harvey explains. Youtube A Plan For Zero Carbon Transportation4

The path to mitigate the effects of the climate emergency can be followed using best practices of engineering and economics.

References

1	(2019, November 26). Earth set to warm 3.2 C by 2100 unless efforts are tripled, new .... Retrieved November 26, 2019, from https://www.cbc.ca/news/technology/un-emissions-report-1.5373154
2	(n.d.). Coal phase-out: Insights from the IPCC Special Report on 1.5 .... Retrieved November 26, 2019, from https://climateanalytics.org/publications/2019/coal-phase-out-insights-from-the-ipcc-special-report-on-15c-and-global-trends-since-2015/
3	(2019, November 26). HOLD-New report provides 'pathway' to get Nova Scotia off .... Retrieved November 26, 2019, from https://www.cbc.ca/news/canada/nova-scotia/ecology-action-centre-report-nova-scotia-coal-free-by-2030-1.5373002
4	(2019, September 19). A Plan For Zero Carbon Transportation - YouTube. Retrieved November 26, 2019, from https://www.youtube.com/watch?v=pQzSyMnEw-o