Once upon a time, British Columbia was known for the enlightened path it was forging in the fight against climate change. The province's leader, Gordon Campbell, had become best friends forever with an unlikely environmental crusader from California – Arnold Schwarzenegger.
In 2008, B.C. became the first jurisdiction in North America to bring in a broad-based carbon tax designed to reduce greenhouse-gas (GHG) emissions. Two years later, the government introduced a low-carbon-fuel standard, also aimed at helping the province reach its goal of lowering GHG emissions by 33 per cent from 2007 levels by the end of this decade.
Mr. Campbell has since left provincial politics and any enthusiasm the government had for being an environmental leader appears to have left with him. Few believe B.C. will meet its emissions goal in the next six years, especially in light of its grand plans for a booming natural gas industry. Now, Energy Minister Bill Bennett is conducting a review of the government's low-carbon-fuel requirements, ones that gasoline and diesel suppliers have never much liked.
Under the law, producers had to immediately add 5-per-cent renewable content (i.e. ethanol) to the gasoline sold in B.C. Diesel had to have 4 per cent.
The legislation also mandated suppliers lower their overall carbon intensity output 10 per cent by 2020. There are various ways in which companies can meet that target, including purchasing offsets. Those producers with more emissions debits than credits at the end of the year are fined.
The transportation sector accounted for 37 per cent of B.C.'s GHG emissions in 2011. The use of renewable and low-carbon fuel in 2012 saved more than 900,000 tonnes of GHG emissions from being released into the atmosphere – the equivalent of 190,499 cars being removed from the road, according to the provincial government.
We're expected to soon learn the results of Mr. Bennett's evaluation of the existing rules. It seems unimaginable he would back down due to lobbying from the Chevrons and Shells of the world, which no doubt believe the low-carbon regulations are an expensive and unnecessary intrusion into their petro universe. Wouldn't it be a travesty if these multinationals had to forgo a little profit in the name of saving the planet?
The fact is, it will be a crime if the government makes any concessions on what are important directives. If anything, it would be great to see the province make the current clean-fuel laws even tougher, although that's unlikely. But any notion that the legislation is hurting the ability of petroleum suppliers operating within the province to make a profit is absurd.
In fact, publicly available data show these companies are doing quite well – and that is likely an understatement. Refining and fuel-distribution charts indicate that companies selling gas and diesel inside B.C. make greater profit margins than anywhere else in the country. By some analyses, those profits are $1-billion above the average for the rest of Canada.
There is keen interest in the results of Mr. Bennett's assessment, and not just among environmentalists. Oregon and Washington state are both in the late stages of developing their own low-carbon-fuel standards and facing inevitable push-back from the petroleum industry. The progress the two states are making on this front will be a topic of discussion at the next meeting of the Pacific Coast Collaborative, a forum for policy makers and others from B.C. and the U.S. states of Alaska, California, Oregon and Washington to share information on issues of mutual concern. Since it was formed in 2008, climate change has been a central topic at the group's gatherings.
The results of Mr. Bennett's review could be known in advance of the Collaborative's next meeting in a week's time. If B.C. offers any rollbacks to its current low-carbon-fuel regime, it would give petroleum suppliers in the U.S. vital ammunition with which to fight Oregon and Washington's plans.
It would also be a blow to the B.C. government's environmental reputation, which has taken a hit recently. If the province wants to foster a robust LNG industry, one that will likely lead to increased GHG emissions, it is going to need to demonstrate environmental stewardship on other fronts.
Committing to the sensible low-carbon-fuel standards introduced a few years ago is an absolute must.