The Senate Committee on Energy, the Environment and Natural Resources released its fourth of five interim reports last month as part of its ongoing study on Canada’s transition to a lower-carbon economy. The report focuses on Canada’s oil and gas sector. Our committee wants to find out how, and at what cost, the industry can reduce its greenhouse gas emissions while remaining competitive, stimulating our economy and providing good-paying, family-supporting jobs.
The oil and gas sector represents 7.7 per cent of Canada’s gross domestic product and is worth $142 billion. It directly and indirectly employs 700,000 Canadians. However, according to Canada’s 2015 emissions profile, the upstream oil and gas sector (extraction and production) was responsible for 168 megatons of greenhouse gas emissions, which represented 23 per cent of our overall emissions. Government projections indicate the sector will emit 175 megatons in 2020 and 193 in 2030.
About three-quarters of our emissions are attributed to other spheres of our economy beyond the oil and gas sector, including transportation, electricity, buildings and agriculture. For example, some Canadian jurisdictions burn coal to produce electricity or use diesel generators, most people drive cars powered by gasoline or diesel, many commercial and residential buildings heat their homes with natural gas.
But as our committee’s report suggests, “if the global community achieves its Paris Agreement targets then overall demand for oil and gas commodities will decrease.” The key word here is “if.”
Two years into this study, I am not convinced Canada (or the world) will achieve its climate change goals. The reality is the world continues to consume fossil fuels at a growing rate. Renewable alternatives have made breakthroughs into the market, but at a pace that barely makes a dent in the demand for fossil fuels.
So what is Canada to do about its rich and vast oil and natural gas plays? Some environmental activists suggest to keep it all in the ground. They argue Canada should opt-out from developing these resources and forgo billions of dollars in tax revenues and royalties.
In fact, when you consider our emissions profile, we could almost achieve our 2030 Paris Agreement targets by completely shutting down our oil and gas sector. I can assure you that this scenario is short-sighted, unrealistic and practically unachievable, unless we are willing to completely destroy our economy and way of life as we know it today.
Many people fail to understand that producing and upgrading the average crude oil represents a small portion of overall GHG emissions when considering a well-to-combustion scenario. Emissions from the extraction and production of oil and gas accounts for a fraction of the total GHGs attributed to the average barrel of oil.
What does that mean in practical terms?
It means that Fred and Martha, your everyday Canadians, are ultimately responsible for a considerable portion of emissions from fossil fuels when they drive their cars to work, heat their homes or hop on a plane. In most Canadian jurisdictions, including the territories, turning on the lights, watching television, charging electronic devices, could also result in direct emissions. Once more, the energy end-user is responsible for those emissions and yet we are often quick to point the finger at the oil and gas industry for being the major culprit when in fact, we are.
Further, I think it’s important to remind Canadians that only about half of the 97 million barrels of oil used every day around the world is for road transportation fuels such as gasoline and diesel. What is more, some 6,000 everyday products are made from petroleum from soap, to eyeglasses and sports equipment and pharmaceuticals.
Canada has a huge challenge to overcome if it wants to get anywhere close to meetings its GHG targets. Keeping fossil fuels in the ground is not an option. While options to displace fossil fuels exists in many areas such as electric vehicles and renewable feedstock in the production of plastics for example, the bottom line is that the use of fossil fuels will continue to be widespread until alternatives are affordable, scalable, equitable and both practically and realistically achievable.
Senator Richard Neufeld is a member of the Senate Committee of Energy, the Environment and Natural Resources. He represents British Columbia in the Senate.
This article appeared in the June 9, 2018 edition of The Vancouver Sun.