Let’s be fair

Canada’s international environmental reputation is distorted by oil sands production, which has been the target of much criticism. Oil sands producers have made impressive strides in dealing with GHG emissions. But I will leave the industry to defend itself. What is overlooked, when outsiders view Canada, are the areas of the economy where we are leaders. Critics in the US are not well-informed on Canadian energy.

Well, look at it this way

When we compare GHG emissions from electricity generation in the two countries the contrast is striking. Canada’s industry comprises over 80% non-emitting sources. It is among the cleanest and most renewable electricity systems in the world. Hydropower dominates the sector. But nuclear, wind, and solar are also important.

In the US 69% of electricity is generated through the combustion of fossil fuels – 38% of that is coal. Coal-fired electricity generation is America’s largest single source of GHGs – 40% of the total. 

In fact, in 2010/11 energy production from biomass in the US generated 303 million tonnes of carbon emissions; electricity generation from coal in the state of Ohio alone emitted 111 million tonnes; while oil sands emissions were 55 million tonnes.

US ENGOs have been instrumental in marshalling public opinion against the Keystone XL pipeline. TransCanada had proposed to build the system to take Alberta crude oil to US Gulf Coast refineries. Environmentalists believed that blocking the project would frustrate oil sands production. The Obama administration opposed the Keystone decision. It wanted Canada to guarantee that oil sands development not result in incremental emissions from Canada. So the message was: clean up your act elsewhere before thinking about a Keystone approval.

Meanwhile, oil production has soared in the US in the last several years and the country is on its way to regaining its title as the largest oil producer in world. Politicians have, for the most part, welcomed the possibility of loosening the Middle East’s grip on American foreign and domestic policy. While skepticism reigns about the advisability of oil sands development, there has been little concern expressed about US production locking the country into a carbon-rich lifestyle for at least another generation.

Is King Coal about to be de-throned?

The administration at the time, to its credit, introduced emission regulations for new coal plants. Although industry commentators have speculated that the regulations will have little or no effect in the foreseeable future. The real test will come when regulations are introduced to cover existing plants. However, industry observers expect that – when written – they will feature “flexible compliance”.

My plea isn’t that everything’s all right and we just need to chill. The energy sector is rife with what economists call market failures. Those are outcomes associated with economic transactions that are not priced in the market. They impose costs on third parties that don’t show up in the prices of those transactions. The result is a misallocation of resources. If producers that generated GHG emissions had to include those third-party costs in their production and pass them on to customers then those costs would affect the balance of supply and demand.

Let’s turn down the heat

My plea is that we de-polarize environmental discussions. Both sides are as much sinners as sinned against. Energy producers, who love to appeal to economic arguments, have to acknowledge that without a proper accounting of the environment in commercial decisions their arguments are difficult to sustain. Strident environmentalists have to come to terms with the fact that they simply don’t know what the right balance of environmental protection and economic well-being is. People, even those who support ENGOs, have come to expect and rely upon a certain standard of living. They won’t easily give it up. 

The romantic notion of an off-the-grid existence may be possible for upper middle class environmental dilettantes but there’s almost 9 billion of us and that’s not a solution for any more than a few.