Big money flowing for oil projects
August 3rd, 2018 - 10:53am
Oil projects are in the headlines again. One is a development story and the other is a development in a story we have been watching for months. In both instances they show how great sums of money are available to support this industry in contrasts to the stagnating funds available for any efforts to lower our greenhouse gas (GHG) contributions. Recent reports of record heat waves smashing old records and actually killing people show that the devastating effects of climate change are becoming more common which leads to question of whether our priorities for energy are misplaced or even making things worse.
Amid great fanfare last week, Newfoundland announced it will develop an offshore oil site at Bay du Nord in agreement with Equinor Canada. It is expected the project will deliver oil by 2025 and the estimated operating cost will be $10.9 billion. The site is about 500 kms east of St. John's and will extract oil from depths of more than 1,100 meters.
At the same time, we just passed the self-imposed deadline for the government to find another buyer for the Trans-Mountain pipeline. That means Canada will own the pipeline and assume all the risk associated with the 65 year old, leaky oil conduit. The government contends there are groups lining up to buy the pipeline, but anyone who has ever sold a used car will know that tire-kickers don’t always turn into buyers. That may mean that Canada will have to take a loss on the pipeline or could end up owning it and paying for maintenance longer than anticipated.
There is another fly in the ointment brewing south of the border. There, the final approval of the sale of the Trans-Mountain Pipeline is being reviewed with an eye to the security implications involved. A story by CBC news states that the purchase agreement contains the stipulation that the completion of the deal is contingent in part on getting clearance from the Committee on Foreign Investments (CFIUS) in the United States.
The deal will be reviewed because, included with Trans-Mountain, is the Puget Sound pipeline which transports crude oil from Abbotsford, B.C., to refineries in Washington state. Although this is a relatively small part of the deal, it could end up representing a big snag in the process. The sale is being studied by CFIUS as part of 30 day review period which may lead to an investigation that could add 45 more days to the process before referring the sale to the President. As with many trade-related issues, the outcome of this process is less certain under the highly charged political climate in the United States.
While money has been flowing for oil projects, the same cannot be said for programs that save energy, create green energy or reduce our GHG output. As the news of provinces opting out of the federal carbon tax initiative grabs attention, less focus is given to the cancellation of retrofit programs that make homes more energy efficient or the abandonment of clean energy projects. This year’s federal budget did not fulfil a promise to restore the Home Energy Retrofit Program to help Canadians lower their greenhouse gas emissions and their energy costs despite the fact that the program is one of the most cost-effective means of reducing emissions while creating jobs.
These developments make it easy to see where the energy focus is for the federal and provincial governments. They are betting on oil while underfunding or cancelling programs that reduce our reliance on it. As heat waves kill people right here in Canada, those decisions make little sense and show a lack of commitment to reducing future problems related to climate change. Those will be inherited by future generations which can explain why the issue is so important for young people. This has not been lost on members of the Prime Minister’s Youth Council who recently wrote to express their disappointment with the purchase of Trans Mountain. Instead of waiting until that generation comes to power our governments should devote some energy and resources to address those concerns now.