By the end of this month, Prime Minister Justin Trudeau’s cabinet is supposed to decide whether, and under what conditions, it will approve Teck Resources’ proposed Frontier oil sands mine. The looming deadline has raised obvious questions about how new projects in Alberta’s oil sands can be squared with Canada’s greenhouse gas goals.
This page believes the Trudeau government should approve Frontier. Saying no to new projects in Canada will not lessen oil demand in North America or worldwide, nor will it prevent projects in other countries from going forward. (If anything, it will make them more viable.) Shutting off Canadian production will simply shift economic activity, and emissions, overseas.
However, if Frontier is built – and at current oil prices, that’s a big if – it would become a significant new source of carbon emissions. That’s true of any new oil sands development. As a result, approval of Frontier and other projects is only possible with stringent conditions for reducing emissions.
The nature of those conditions has come to the fore.
Alberta Premier Jason Kenney argues that Frontier has already made it through a long and rigorous review; he’s also said that a barrel of oil from Frontier would be cleaner than the average barrel in North America. That is only partly true. Frontier was reviewed under a system designed by the previous Harper government, and the review was restricted from assessing key issues such as how Frontier factored in to Canada’s overall climate plan. During the review, Environment Canada concluded that Teck’s project would be dirtier than existing mines, and its filings on emissions “does not demonstrate that the project will be ‘best in class.’”
If Ottawa is to credibly say yes to a mine that would strain Canada’s climate goals, the federal cabinet has to impose a range of conditions.
Start with Teck’s environmental plan. Frontier cannot proceed unless Teck can show it will be “best in class” and the cleanest mine in the oil sands. Teck this month announced “an objective” of net zero emissions by 2050, but that’s across all of its operations. A lot more detail is required. Teck has to show how Frontier fits into any such plan.
Alberta’s overall oil sands emissions plans should also be part of the approval. Some may say that such a perspective is too broad, and that Frontier needs to be considered in isolation. But much has changed since early 2012, when Teck filed its application. Canada has since made big climate commitments and is only about halfway to its 2030 goals. The national plan includes ample room for oil sands production to grow, but that room is not unlimited.
The question is how Ottawa can say yes to individual oil sands projects, now and in future, while still delivering lower emissions, nationwide. The answer is that it’s the national target that matters – though it is impossible to meet that target without progress in each sector of the economy, including the oil sands.
Alberta’s previous New Democratic government pledged to cap oil sands emissions at 100 megatonnes a year. However, regulations were never drawn up to implement the cap, or explain how it will work. That absence is now a live issue, because Ottawa predicts the cap will be reached by 2030. (Mr. Kenney says the oil sands are far under the cap; official data filed with the United Nations suggests otherwise.)
Alberta needs to recommit to the cap, and spell out how it will function. Teck is not the only oil sands project out there. Numerous other smaller ventures have been approved and are sitting on the shelf.
The Public Policy Forum recently suggested that, over a long period of time, Alberta should steadily reduce the cap to net zero. That would be a strong incentive to innovate. And the oil sands are going to have to be pushed to get cleaner. This has become a business imperative, as international investors, banks and insurers question their ties with the oil sands. The PPF suggested new fiscal incentives to aid emissions innovation, like deferred royalties. Ottawa can work with Alberta to make that happen.
Canada can continue to develop its resources while fighting climate change. Achieving ever-lower carbon emissions does not mean saying no to Frontier or to other, future oil projects. It means imposing conditions on all projects that are tough enough to keep Canada, and the oil sands, on a path of carbon reduction.