[Guest Post by Michael Nabert]
With fossil fuel assets already becoming stranded, Canada’s current level of dependence on fossil fuels could cost us 20% of national GDP and 8% of employment by 2030. Spending public money on a pipeline is not a smart investment, it’s a bet on a dying horse. https://thetyee.ca/Opinion/2018/06/08/Canada-Buys-Pipeline-Oil-Bubble-About-To-Burst/
Don’t take my word for it. Here’s the complete peer reviewed scientific study of the macroeconomic effects in the prestigious scientific journal Nature. Up to $4 trillion in global oil investments will evaporate as the world transitions to a low carbon future. The idea that there’s a market for this poor quality product is pure fiction. Bitumen is particularly vulnerable to major shifts in the oil and gas market because production is expensive when compared to extraction techniques used in the Middle East. That means bitumen markets will be the first to collapse when demand slows significantly, making Canada particularly vulnerable. Throwing more good money away on the bitumen market at this time is climate denial as economic policy and flies in the face of what is already happening in global markets where we can all see it. https://www.nature.com/articles/s41558-018-0182-1.epdf
If a drop in the value of major coal companies by well over 95% in only five years isn’t an indicator of a change in fossil fuel’s fortunes, I don’t know what is. http://rhg.com/notes/the-hidden-cause-of-americas-coal-collapse
“By 2020, the IMO has mandated that the commercial fleets it represents can only buy and burn ship engine oil with a sulphur content of 0.5%. That is a 700% reduction from the current average. It has been estimated that the 15 largest ocean vessels currently emit as much sulphur annually as all of the world’s cars.
Alberta bitumen will likely be a big loser, because it contains on average some 11 times more sulphur than conventional crude, and results in a high ratio of low-grade Bunker C when refined. As of 2020, according to industry reports, U.S. refinery purchases of diluted bitumen for ship fuel will begin slowing to an eventual trickle, Europe will buy none because it has the wrong refinery profile, and Asian refiners will dedicate new refineries to produce low-sulphur diesel for ship fuel.”
France, India, Britain, and Norway have already announced their intentions to eliminate fossil fuelled cars altogether, and other nations are moving to follow suit. http://money.cnn.com/2017/07/26/autos/countries-that-are-banning-gas-cars-for-electric/index.html
Here’s China doing the same. It’s like it’s a growing trend or something.
Electric vehicles alone could displace oil demand of 2 million barrels a day as early as 2023, creating a global a glut of oil equivalent to what triggered the 2014 oil crisis, and that’s just one example.
The claim that additional pipeline capacity to tidewater will unlock significantly higher prices for bitumen is not corroborated by either past or current market conditions. Recent international commitments to reduce global carbon emissions over the next three decades will significantly reduce the size of future oil markets. Only the lowest-cost producers will remain commercially viable while high-cost producers will be forced to exit the market.
All of this just to give a Texas corporation a 637% profit margin at Canadian taxpayer expense.
Meanwhile, clean energy is currently the best job creation engine in the whole planetary economy.
Canadians get exactly one opportunity to play a leadership role in the growing economy of the future. If we decide not to step up, we will be left in its dust. Fossil industries cannot sustain us in a world that is moving away from the use of fossil energies. They’re yesterday, not our tomorrow.
In fact, the health care savings alone from shifting away from fossil fuels more than makes the transition to renewable energy pay for itself, not to mention that it also means saving lives. Again, you don’t have to take my word for it, so here’s another full scientific study published in a peer reviewed journal for you to read in full if you’re curious.
Download PDF https://www.nature.com/articles/nenergy2017134.epdf
Or if you don’t want to read the whole thing and would like a summary,
The Canadian Medical Association report that links air pollution from fossil fuels to a staggering 92,000 emergency room visits a year is just one of the troubling facts about how air quality is affecting our health, and our health care costs.
Canadians will see a long list of benefits by transitioning to renewable energy. Research indicates it will create 200,000 new jobs in the energy sector and the conversion of 500,000 fossil fuel-related jobs into clean energy jobs. Air pollution from burning fossil fuels would be eliminated, energy prices would stabilize, and the country would save more than $100 billion every year.
On the other hand, no amount of wishful thinking is going to help a new pipeline turn stranded assets into economic opportunity for the future. The argument that a new pipeline is a smart investment is total bunk.