Tuesday, August 10, 2021

 

What the new UN report warning of climate impacts means for Canadians

Expect more heat waves, fires and flood events in future

Smoke billows from a wildfire near Osoyoos, B.C., on July 20, 2021. A new United Nations report on the impact of global warming caused by human activity was released Monday. More intense wildfires are just one effect of climate change being seen across Canada. (@DylanGaleas/Reuters)

The United Nations Intergovernmental Panel on Climate Change (IPCC) once again issued a dire report warning that without a radical reduction of our greenhouse gas emissions, we are on a course for global warming that will have grave consequences.

Monday's report, which examined several scenarios, including one of low carbon emissions and one of high carbon emissions, or a business-as-usual approach, said the planet has already warmed almost 1.2 C above pre-industrial levels. The IPCC is calling on world governments to reduce CO2 emissions to limit that warming to 1.5 C, though it appears we may hit that threshold within the next two decades unless drastic reductions are made.

We are already seeing the effects of climate change across Canada, including more intense wildfiresheat waves and drought. There is nowhere — and no one — that will not be affected.

Here are just some of the impacts we can expect across the country.

Deep changes in the Arctic

The Arctic is warming at more than twice the rate of the rest of the world, and according to the report, it's "virtually certain" that it will continue for the rest of the century. And that comes with many consequences. 

Polar regions have begun to experience extreme heat events at more than three times the global rate. According to the report, this is expected to continue and will lengthen the fire season.

Permafrost has been thawing in the Arctic since the 1980s. This is particularly concerning because it releases methane, another greenhouse gas that contributes to global warming. 

While winter snow may increase in the far north and central Arctic, the length of snow in the spring has been declining and will likely continue to do so.

Ships are framed by pieces of melting sea ice in Frobisher Bay in Iqaluit, Nunavut in July 2019. The Arctic will be almost ice-free in the coming years, during its annual summer minimum, the UN report found. (Sean Kilpatrick/The Canadian Press)

Then there's the ice. Arctic sea ice cover is at its lowest level since 1850, and the Arctic is projected to be practically ice-free at its summer minimum in roughly 30 years. 

"We have already committed to more warming, more ice loss from glaciers and ice sheets, and more sea level rise," Ella Gilbert, a post-doctoral research assistant at the University of Reading who was not involved in writing the report, said in a statement.

"We will probably see summers without Arctic sea ice before 2050 and the Greenland and Antarctic ice sheets will continue to shrink. We may even be hurtling towards unpredictable and irreversible tipping points in the climate system."

WATCH | World reacts to dire forecast from UN climate panel:

Climate change affecting every region on Earth, UN report says

24 hours ago
1:20
The UN's Intergovernmental Panel on Climate Change warns in a report that climate disruptions are guaranteed for decades, if not centuries, due to greenhouse gas levels. People of all ages across the world expressed concern for what that means for the future. 1:20

All these changes have a snowball effect. Polar regions are deeply important to regulating the global temperature. Less snow means more sunlight is absorbed by the darker water that's been exposed, which in turn leads to further warming not only of the region, but of the entire planet. It's what is referred to as a positive feedback loop. 

These changes deeply affect those who live there, particularly Indigenous people who rely on snow cover and the cold weather.

"These aren't surprising issues. [The] Indigenous world who rely upon the well-being of their environment and the well-being of their climate and the land and the waters and everything that we depend on for our food source has been impacted for many, many years," said Siila Watt-Cloutier, an Inuit environmental, climate change and human rights advocate, who was not involved in the report. 

"And we have been signaling these messages for many, many years."

Children play on Hot Sands Beach in downtown Kelowna, B.C., near Okanagan Lake on July 30, 2021. The William R. Bennett Bridge is barely visible due to heavy wildfire smoke. (Winston Szeto/CBC)

More heat events

In a summer where fires continue to rage across British Columbia, and the hottest temperature ever recorded in Canada was reached in June — 49.6 C in Lytton, B.C. — it may not come as a surprise to many Canadians that heat events are only expected to worsen.

In northern North America, which includes most of Canada, the report found that "temperature increases are projected to be very large compared to the global average, particularly in the winter."

"Heat waves, and changes in fire weather — that is the frequency or the likelihood of getting the combination of dry, hot conditions that lead to wildfires like the ones we're seeing this year — those increase along with temperature," said Greg Flato, senior research scientist with Environment and Climate Change Canada and vice-chair of the IPCC group that authored the report.

"The higher the temperature gets, the more frequent, and the more severe these heat waves will become and the more frequent and more severe the fire weather conditions will become."

WATCH | Greece heat wave worst in 3 decades:

Greece battles wildfires after worst heat wave in 3 decades

24 hours ago
3:50
Wildfires have ignited across Greece in the wake of the nation's most protracted heat wave in 30 years — which sent temperatures soaring to 45 C for days — creating bone-dry conditions. 3:50

A toll on our oceans and water

One of the effects of a warming climate is rising sea levels. The report found that it is "virtually certain" that sea levels will rise around the world throughout the 21st century and will "continue to rise for centuries to millennia."

That's not only due to a warming ocean which then expands, but also a result of melting glaciers and ice sheets, something that we're seeing now across Canada, but also in Greenland.

"So sea level rise will continue to increase. And the rate of sea level rise will depend on future emissions," Flato said.

"But for coastal communities that has implications then for the frequency or the likelihood of severe inundation flooding, high sea level extremes … so depending on where you live, that will be an increasing threat."

However, the report found that the surface of the North Atlantic Ocean has warmed slower than the global average or slightly cooled. But it has also increased in salinity, which can affect ecosystems.

A hoary marmot perches on rocks near the Saskatchewan Glacier, the longest outflow glacier from the Columbia Icefield near the Alberta-B.C. border. Glaciers around the country will experience further melt with a warming climate. (Christine Boyd/CBC)

In the Rockies, the glaciers are melting which may create more glacial lakes. Due to temperature differences, experts also expect to see shifts in when rain transitions to snow and the range of snow and ice conditions over the next few decades.

In Ontario, parts of Quebec and the Atlantic region, it's very likely that there will be increases in the amount of rain as well as extreme precipitation. This means there is likely to be more flooding not only along our waterways, but also in places that normally don't flood.

Hotter cities

Most people across the world live in cities and Canada is no different. But living in these concrete jungles means that the effects of increasing heat waves are exacerbated. This is referred to as the urban heat island effect.

This is because tall buildings close to one another prevent natural air circulation and also absorb more heat. That heat is then re-emitted at night.

The City of Toronto sets up cooling centres during heat waves. The new report said cities across the country will experience hotter temperatures due to the effect of urban heat islands. (Bruce Reeve/CBC)

Increasing urbanization has made temperature extremes in cities worse, particularly for nighttime extremes.

In many cases, this means that air pollution worsens as surface ozone particles increase. This is exacerbated by rising fires and smoke. 

More urban development and more frequent heat waves with more hot days and warmer nights will only add to the heat stress in cities.

The difference of the intensity and frequency of these projected impacts matter with even percentages of a degree. The IPCC's special report released in 2018 titled Global Warming of 1.5 C illustrated the difference between warming of 1.5 C and 2 C. It illustrated that consequences and effects on humanity increased drastically at 2 C of warming. That's why it's important to cut emissions now.

"What these low emission scenarios illustrate is that we do have the capability to limit warming if, collectively, we're able to reduce emissions quickly enough and get to net zero by the middle of this century, we can limit warming to one and a half degrees or somewhere not too far above that," Flato said. 

"From my perspective, that's kind of empowering in the sense that there's something we can do about it. It's not an inevitable consequence. So we have agency, and we can act. We can act individually; we can act collectively."

WATCH | IPCC sounds alarm over major 'irreversible' climate change:

UN sounds alarm over major 'irreversible' climate change

1 day ago
3:48
The Intergovernmental Panel on Climate Change says the world is dangerously close to runaway warming — and that humans are "unequivocally" to blame. 3:48

ABOUT THE AUTHOR

Nicole Mortillaro

Senior Reporter, Science

Nicole has an avid interest in all things science. As an amateur astronomer, Nicole can be found looking up at the night sky appreciating the marvels of our universe. She is the editor of the Journal of the Royal Astronomical Society of Canada and the author of several books.

With files from Karen Pauls

 

Critics question B.C.'s growing fossil fuel subsidies in wake of dire new climate change report

'It's as if we're paying someone to go around and throw gasoline on the ground,' analyst says

According to the environmental group Stand Earth, the B.C. government will give away $1.3 billion in subsidies to the fossil fuel industry this year. (Coastal GasLink)

Following the release of an alarming new report on climate change that the UN's secretary general said "must sound a death knell" for the fossil fuel industry, environmentalists in B.C. are asking why the province is still giving billions to subsidize oil and gas producers.

On Monday, the United Nations Intergovernmental Panel on Climate Change (IPCC) released a report showing that greenhouse gas levels in the atmosphere are already high enough to guarantee climate disruption for decades or even centuries to come, and humans are "unequivocally" to blame.

Those dire warnings have B.C. Green Party Leader Sonia Furstenau calling for concrete action from the province.

"Our climate plan does not meet our targets. This government continues to subsidize the oil and gas industry," she said Monday.

"We need to see concerted urgent action and a plan backed up by funding to respond to climate change right now."

UN Secretary General António Guterres said the IPCC's findings "must sound a death knell for coal and fossil fuels, before they destroy our planet."

But according to the environmental group Stand Earth, the B.C. government will give away a record-breaking $1.3 billion to subsidize the fossil fuel industry this year, including $421 million in tax credits for fracking wells.

Tom Green, a climate solutions policy analyst with the David Suzuki Foundation, said most British Columbians don't realize the extent to which the province is propping up the industry.

"It's as if we're paying someone to go around and throw gasoline on the ground, in front of the wildfire fighters," he told CBC News.

According to Clean Energy B.C., about two-thirds of the energy used in the province still comes from fossil fuels. Green says time is running out to change that.

"Each tonne of fossil fuels that we burn, each tonne of CO2 that we add to the atmosphere is a tonne we can't afford anymore," he said.

'An opportunity to make a difference'

In a tweet addressing the IPCC report, Premier John Horgan acknowledged the obvious consequences of runaway climate change in B.C., including recent record-breaking heat and devastating wildfires.

He touted B.C.'s current renewable energy plan, but added "there's much more to be done to build the cleaner economy [and] brighter future that people and our planet need."

However, he did not offer any hint of what further action the province might take or when that might happen.

Kathryn Harrison, a professor of political science at the University of B.C., said there's little political motivation for the government to move away from subsidizing fossil fuels, despite the clear consequences for the climate.

"They make easy money from royalties from oil and gas and coal production, creating jobs — and creating jobs in the four-year electoral cycle is a great way to get re-elected," she said.

For Robin Cox, head of the Climate Action Leadership Masters Program at Royal Roads University in Victoria, the IPCC report does offer some hope.

"It's an opportunity to make a difference, to take advantage of this narrowing window in order to do the things that we need to do to get on with it so that we're reducing our global emissions ... while at the same time preparing for the unavoidable impacts," she said.

Cox said that will mean taking "much more aggressive" action to reduce emissions, far beyond the modest targets of previous years.

"It needs to be an expectation of all government funding that emissions reduction is absolutely incorporated," she said.

"The B.C. government came out with a climate preparedness and adaptation strategy recently and it's quite broad and comprehensive, but in my estimation, it is nowhere near as assertive as it needs to be in terms of actually addressing this."

With files from Baneet Braich, On The Coast and Reuters


A ‘death knell’ for fossil fuels? 

What the UN’s alarming new climate report means for Alberta

By Kieran Leavitt
Edmonton Bureau
TORONTO STAR
Mon., Aug. 9, 2021timer4 min. read

EDMONTON—An alarming new climate-change report has once again thrust Canada’s oil-and-gas industry into the spotlight, but the political face of the sector, Alberta Premier Jason Kenney, was quick to throw cold water on the notion that the world can simply stop using fossil fuels.

The premier found himself answering questions Monday about a report newly released by the Intergovernmental Panel on Climate Change, one that was worked on by 234 scientists from around the globe.

It found that in about 10 years, global temperatures will whip past levels the international community has deemed dangerously warm, bringing extreme weather and rolling climate disasters. In a statement, UN Secretary-General António Guterres said that the more than 3,000-page report should be “code red for humanity” and a “death knell for coal and fossil fuels.”

Speaking to reporters in Edmonton, Kenney said he hadn’t read the new UN report, but that major producers in Alberta have committed to reducing emissions to net-zero by 2050.

Alberta is the world’s third largest oil-producing jurisdiction.

“The notion that we can shut off the entire major industrialized economy with the flick of a switch is patently unrealistic,” he said.

“The vast majority of energy consumed around the world is derived from fossil fuels,” he said. “There is no credible way to eliminate our dependence on fossil fuel energy anytime in the foreseeable future.”

For years, Kenney has championed the province’s energy sector as it has weathered storm after storm — including sinking prices in recent years and during the COVID-19 pandemic —even as companies have collapsed and thousands of jobs have disappeared.

The federal government has stepped in at times to help, including with its purchase of the stalled Trans Mountain pipeline extension project in 2018 in a bid to get more Alberta crude to the British Columbia coast for export overseas.

During Kenney’s successful 2019 election campaign, he ran on a pledge to boost “jobs, the economy and pipelines.”

Once he became premier, Kenney continued his advocacy for the sector, establishing a $30-million rapid response “war room” to dispel what it deemed as myths in media and online about the province’s energy sector. The operation has since been mired in controversy and had most of its funding cut at the outset of the COVID-19 pandemic.

Kenney also struck an inquiry that sought to investigate allegations of foreign funded environmentalists who attack the province’s industry. The resulting report hasn’t yet been publicly released by his government and the inquiry’s critics have slammed it as the stuff of conspiracy theories.

Meanwhile, no new pipelines have been built during his term and climate alarms have begun to ring louder.

Chris Severson-Baker, the Alberta director for the Pembina Institute, a clean energy think-tank, said that the Kenney government “is entirely out of touch with where the majority of Canadians are on the issue of climate change.”

In cross-country polling, climate change is often in the top three most important issues for Canadians.

In a report released in July, the Pembina Institute said that Alberta accounts for 38 per cent of Canada’s emissions and that the province’s emissions increased by 17 per cent between 2005 and 2019. The oil-and-gas sector accounts for 51 per cent of Alberta’s overall emissions, the report noted. Much of Canada’s success in emissions reduction over the past 15 years has, in fact, been offset by transportation growth and the energy industry, said Severson-Baker.

Severson-Baker said that the Alberta government gives mixed signals when it says it supports climate action but then challenges the federal carbon tax in court. This could cause uncertainty for investors who may want to put money into Alberta, he said.

“In Alberta, we need to come to grips with the fact that our market is changing, and we need to prepare for that future scenario,” he said.

Alberta could boost carbon-capture technology so that oil produces less carbon, said Severson-Baker, and it could produce more low-carbon natural gas.

“But there are some streams of oil and gas in Alberta that are high-cost, high carbon and likely not going to be economically viable in a reduced demand environment,” he said.

“The best way that Alberta can respond to this future scenario is to adopt a target that is consistent with the target that Canada has adopted,” he added, “and actually come up with a plan that would meet that target and implement it.”

In April, Ottawa pledged to cut greenhouse gas emissions by 40 to 45 per cent below 2005 levels by 2030.

In a statement to the Star, Tim McMillan, the president of the Canadian Association of Petroleum Producers, said that the demand for oil and gas is growing, will get past pre-pandemic levels in two years and is “expected to grow for decades to come.”

“We absolutely believe there is space in the global market for Canada’s oil and natural gas production,” he said.

“With our continuous emissions intensity reductions and our leading role in clean technology investments in Canada, the industry has demonstrated we are committed to playing a pivotal role in helping Canada meet its stated emissions reduction goals.”


Kieran Leavitt is an Edmonton-based political reporter for the Toronto Star. 


May was a rough month for oil companies. It started when the agency that was created to defend fossil-fuel security made a game-changing proclamation: that winning the fight against climate change means no more oil, gas or coal deposits should be developed beyond projects already committed as of 2021. “There is no need for investment in new fossil fuel supply in our net zero pathway,” the International Energy Agency’s landmark report declared in late May.

To limit the long-term rise in global temperatures to 1.5°C, it said governments and industry must wean themselves off fossil fuels ASAP, push for energy efficiency in all walks of life, and invest trillions in renewable energy.

Coming from the Paris-based IEA, an intergovernmental body founded in the wake of the 1973/74 OPEC oil embargo to assure global energy supply, the report turned heads. Overseen by the energy ministers of 30 major economies, the IEA has generally defended fossil-fuel interests. But with most countries missing their emission-reduction targets and catastrophe looming, the IEA finally picked a side.

“This gap between rhetoric and action needs to close,” said IEA executive director Fatih Birol. “Doing so requires nothing short of a total transformation of the energy systems that underpin our economies.”

Nine days later, on May 26, calls to close that gap came fast and furious. Chevron shareholders voted 61% in favour of an activist proposal asking the oil company to cut its total greenhouse gas emissions, including those coming out of customers’ tailpipes, emissions known as Scope 3.

That same day, at least two ExxonMobil board members were unseated in a bid to, as Reuters put it, “force the company’s leadership to reckon with the risk of failing to adjust its business strategy to match global efforts to combat climate change.”

Eli Kasargod-Staub, the executive director of Majority Action, a shareholder group, told The Guardian, “For the first time in history, responsible shareholders have breached the walls protecting recalcitrant boards of directors.”

Also that day, a Dutch court ordered Shell to reduce its GHGs by 45% by 2030, based on 2019 levels, after determining that Shell’s climate plans were inadequate. Pundits began calling it Black Wednesday and ‘a day of reckoning’ for Big Oil as courtrooms and boardrooms turned on industry.

“For the first time in history, responsible shareholders have breached the walls protecting recalcitrant boards of directors.”

-Eli Kasargod-Staub, executive director of Majority Action

“This is a monumental victory for our planet, for our children and a big leap towards a livable future for everyone,” said Donald Pols, director of Friends of the Earth Netherlands.

Though Royal Dutch Shell said it will appeal the ruling, more good news was announced May 26: Canada’s largest oil company, Suncor, committed to going net-zero by 2050, adding it would slash emissions across its value chain by a third by 2030.

Luckily, the IEA’s report, Net Zero by 2050, “shows that there are still pathways to reach net-zero by 2050,” said Birol. He called the IEA’s prescribed course “the most technically feasible, cost‐effective and socially acceptable. Even so, that pathway remains narrow and extremely challenging, requiring all stakeholders – governments, businesses, investors and citizens – to take action this year and every year after.”

The report sets out 400 milestones necessary to achieve net-zero by 2050. Most important: ensuring that developing economies receive financing and technological aid to build their energy systems equitably and sustainably. Birol insists that a world powered by clean electricity means huge opportunities, “with the potential to create millions of new jobs and boost economic growth.”

“Big Oil and Gas has just lost a very powerful shield,” summed up David Tong, a senior campaigner with Washington, D.C.’s Oil Change International.

But the IEA’s shift doesn’t mean the path to 2050 will be smooth. The Canadian Association of Petroleum Producers dismissed the report as “unrealistic.” Alberta Energy Minister Sonya Savage predicted Alberta’s fossil-fuel sector “will continue to grow and thrive.” Large emitting countries such as Japan, Australia and the Philippines bucked the proposed ban on new development, claiming natural gas, oil and in some cases even coal still have roles to play.

It doesn’t help that the IEA has been sending out mixed messages. Weeks after the release, as OilPrice.com pointed out, “the agency called on OPEC+ to increase production as demand for oil rebounded faster and stronger than the agency had apparently expected.” By July, benchmark crude oil prices had surged to multi-year highs after a breakdown in negotiations with the Organization of the Petroleum Exporting Countries.

In its July oil market report, the IEA cautioned  that “while prices at these levels could increase the pace of electrification of the transport sector and help accelerate energy transitions, they could also put a drag on the economic recovery.” It added, “Volatility does not help ensure orderly and secure energy transitions.”

Meanwhile, back in Canada, oil industry advocates continue to suggest that the sector should be positioning itself to capitalize on the next oil boom. However, in a report released last month, Jeffrey Craig of Veritas Investment Research said, “Given the pressure to both cut emissions and invest in renewable energy, we expect the super majors to shed mostly upstream oil and gas assets [in the oil sands] to fund investments into renewables.”

Right on cue, when BP slashed its long-term oil price outlook in late June, the company’s oil sands investments were rendered “worthless,” Reuters reports. The fate of those stranded assets remains to be seen.

South of the border, oil majors are feeling the heat this week as Democratic senators proposed a climate pollution tax that could cost Exxon, Chevron and other big emitters billions annually while establishing a “Polluters Pay Climate Fund.” The draft bill could see US$500 billion raised over 10 years to be used toward investments in communities facing fossil-fuel-driven climate impacts, including extreme flooding, rising sea levels and a more severe wildfire season.

Corporate Knights director of research Ralph Torrie points out that “the smart money and long-game investors” have been pivoting from fossils to renewables for years. “If the IEA can get out in front of that parade, it can only help.” Torrie suggests that the right question to be asking is not “What will happen?” but “What must happen?” if we are to avert truly dangerous climate change.

While new technologies may help power the transition, he credits the agency for seeing energy efficiency as a resource: “We must thread the eye of a needle here, and there is only time now for one attempt at it.”

A version of this story appeared in the Summer Issue of Corporate Knights magazine.

WE OWN IT
Trans Mountain pipeline tries to override Burnaby to gain permits for clearing 86 trees

City of Burnaby say it will not fight Trans Mountain's application to federal regulator



Michelle Gomez · CBC News · Posted: Aug 09, 2021 
The Trans Mountain Expansion Project also applied to the Canada Energy Regulator to override Burnaby's tree bylaw in 2017 and 2020. (Ben Nelms/CBC)

The Trans Mountain pipeline expansion project has once again asked a federal regulator to overrule the City of Burnaby and allow the Crown corporation to cut down 86 trees near the boundary between Burnaby and New Westminster .

The city has previously denied Trans Mountain permits to cut down these trees.

Trans Mountain also requested the Canada Energy Regulator (CER) to overturn Burnaby's refusal to grant a street works permit allowing access to a construction area near North Road in the city.

Filed on Aug. 3, the application states that Trans Mountain attempted to work in good faith with Burnaby before bringing the matter to the CER. It describes Burnaby's unwillingness to issue these permits as unconstitutional.

This follows a similar conflict earlier this year, when the CER bypassed Burnaby and gave Trans Mountain permission to cut down more than 1,300 trees in the Brunette River Conservation Area. The decision made in February does not absolve Trans Mountain from compliance with other relevant city bylaws.

Trans Mountain tree cutting can resume as stop-work order on pipeline route lifts

Trans Mountain said in a statement to CBC that the city has never issued tree clearing permits for the pipeline expansion project.
Burnaby will not challenge application

In a letter filed to the CER on Aug. 5, the City of Burnaby stated that it will not contest the request.

"This does not indicate support and should not be interpreted as agreement with any of the facts or legal positions put forward by Trans Mountain. The CER has previously ruled on similar applications."

The CER overruled Burnaby tree bylaws in 2017 and again in early 2021.

Of the new trees to be cleared, 44 are located off of North Road, 10 North of Shellmont Street, and 32 in the Stoney Creek area.

The Canadian government purchased Trans Mountain pipeline from energy giant Kinder Morgan in 2018 for $4.5 billion. The expansion project is twinning the existing pipeline and will increase the amount of petroleum it carries from Alberta to British Columbia's coast from 300,000 to 890,000 barrels per day.
Protests in the trees

A group of protestors have physically occupied the treetops of the Brunette River Conservation Area, where most of the trees are to be removed, for over a year.

Simon Fraser University professor Tim Takaro is one of the leaders of this protest.

A photo supplied by a supporter shows Tim Takaro, 63, in his treetop protest apparatus.
 (Jef Bradshaw)

"One would think that hundreds of British Columbians dying from climate change in the last month and fires out of control in the province would be enough of a wake-up call for this government to stop the project," said Takaro.

Campaigns manager of Dogwood B.C., Alexandra Woodsworth, said the community activism surrounding the project has been effective.

"It is really a powerful symbol of what community resistance can achieve. They have really held off pipeline construction in one area."

Burnaby tree-sitters claim victory in protest against Trans Mountain pipeline

Woodsworth said that Burnaby is up against a federal government that is prioritizing the interests of the fossil fuel industry.

"We cannot be building a new pipeline in the middle of a climate emergency. We've got fires across the province… we've had deadly heat waves earlier this summer."

ABOUT THE AUTHOR
Michelle Gomez is a CBC News Researcher in Vancouver. 



I SMELL A CON 


'Up to 1 million' bitcoin processors could be relocated to Alberta from China under energy firm's proposal

Proposed project would use huge amount of energy, require 24/7 armed guards


Joel Dryden · CBC News · Posted: Aug 10, 2021 
The Quirk Creek natural gas plant, located southwest of Calgary, could serve as the new home for 200,000 bitcoin mining machines relocated from China, according to a press release from Black Rock Petroleum Company. The Nevada-based company announced in July it had reached an agreement to operate up to one million bitcoin mining rigs in Alberta, but some experts question whether a bitcoin-mining operation of that size will be allowed to proceed. (Submitted by Rafal Komierowski)

Three natural gas-producing sites in southern Alberta could host "up to one million" bitcoin mining machines relocated from China under a deal proposed by Nevada-based Black Rock Petroleum Company amid Beijing's ongoing crackdown on cryptocurrency production and trading.

Bitcoin is a digital currency that can be sent between users without the need for a central bank, leveraging blockchain technology to maintain a decentralized ledger of transactions. Bitcoin's value has spiked in the last year.

The process of unlocking new bitcoin to add to the existing supply is called "mining." This requires the use of computers with powerful processors in an energy intensive process.

No timeline for the deal was immediately announced, though the contract term for using the natural gas sites is listed as 24 months, according to a press release from Black Rock Petroleum Company.

Earlier this year, Chinese authorities cracked down on bitcoin mining due to apparent environmental concerns and other issues, ordering miners to shut down.

Curious about cryptocurrency? Here's everything you need to know

Up to one million mining machines, or rigs, entering Alberta would represent a significant chunk of China's prior total mining capacity, experts say, with major impacts in energy consumption in the province.

A crypto mining farm operates in a former Soviet-era car factory warehouse in Moscow in 2018. (Maxim Zmeyev/AFP/Getty Images)

Alex de Vries, a researcher and economist who runs the cryptocurrency analytics website Digiconomist, said the move to Alberta would represent a multi-billion dollar investment using fossil fuels as a power source.

"In China, they were using hydroelectric power for at least part of the year, and then the rest of the year they would be using Chinese coal, instead," he said of the energy source powering the computers used in the mining process.

"But if they're coming to Alberta and start running on natural gas all year round, it's not improving the situation of this network, which is already responsible for more CO2 emissions than we are saving with all electric vehicles around the world combined."

As of Aug. 9, a single bitcoin was worth more than $46,000 US and the total market supply was worth more than $866 billion US, according to the price tracking website CoinMarketCap.
Proposal represents 1/3 of global mining capacity: expert

It's difficult to definitively determine how many computers make up the global bitcoin mining network; de Vries pegs that number at around three million.

In other words, the one million machines supposedly destined for Alberta could represent around a third of global mining capacity.

Though he's skeptical of the "astronomical" figures proposed in Alberta, Brandon Arvanaghi, a U.S.-based bitcoin mining engineer who is not connected with the Alberta project, said the full impact of China's crackdown is not yet fully understood.

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"Basically, every North American miner has started ramping up every facet of their mining operation. They've raised more money, they've procured more power, they've gotten more land, and they're ready to scale up," Arvanaghi said.

"As these new miners come in [to North America], you see more jobs coming in, IT staff, electricians, campus managers."

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Bitcoin processors can connect to the electricity grid or directly to an energy producer, such as a natural gas plant, to power their computer network.

While bitcoin miners tend to gravitate toward the cheapest sources of electricity, Arvanaghi said there are benefits to natural gas producers, too. Certain bitcoin mining companies utilize flare gas from oil drilling, saving it from being burned.

Why the rise of bitcoin could be the first shot in a currency revolution

Black Rock Petroleum Company, not to be confused with BlackRock, the giant New York-based investment firm, said in a release that the first 200,000 mining units would be hosted at the Quirk Creek gas plant, located near the southwestern hamlet of Millarville, Alta.

For a mining unit, picture a powerful computer with cooling fans. Each individual unit might not look too different from your home desktop PC processor — but the guts of this hardware are specifically designed to handle intensive and heavy-duty computing work.

Bitcoin processors solve complex mathematical problems to enable bitcoin transactions, and miners earn bitcoin for doing so. (Bahador Zabihiyan/Radio-Canada)

It's unclear what the project could mean for Alberta's tax base. Black Rock said the site would be staffed by Chinese and English speaking technicians and other employees, but it's unclear how many jobs the project would entail.

The logistics of bringing such a large number of mining rigs to rural Alberta would be challenging, Arvanaghi said.

"To facilitate that, you need a lot of land, you'll probably need a substation, you'll need internet connectivity out there, a lot of staff who know how to operate these miners … basically, there's a lot of things that can go wrong with this."

The Quirk Creek plant is operated by Calgary-based Caledonian Midstream Corporation, which was acquired by Black Rock in early July.

Charles Selby, president of Caledonian, said in an email that the company had entered into a non-binding letter of intent with Black Rock, which is subject to financing and other conditions.
Significant hurdles to clear

At this stage, Quirk Creek may not be equipped to handle the demands such a significant number of bitcoin processors would require.

"Given our current gas production, a more reasonable number of miners would be 10,000 rather than the 200,000 referenced in the press release," Selby said.

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In a brief phone call, Black Rock chief executive officer Zoltan Nagy said additional energy generation to meet the company's needs would be achieved by adding generators to the site.

Nagy said additional details surrounding the financials of the deal would be forthcoming. Conducting a full interview at this time was premature, he said.

An illustration showing a representation of the virtual currency in front of China's flag. China has cracked down on bitcoin mining in recent months. (Dado Ruvic/Reuters)

He said his company had been pursuing the purchase of Caledonian before the opportunity to relocate the Chinese bitcoin units arose.

The top end of Black Rock's projections — one million mining machines — would suck up a gigantic amount of power in Alberta.

De Vries, the founder of Digiconomist, said depending on the exact equipment type, those machines would need between one gigawatt (GW) to 3.5 GW of power — which, by de Vries's calculations, would take up roughly 10 to 30 per cent of the total natural gas-based electricity production in Alberta.

"What they would need would represent such an enormous part of the power available in Alberta," de Vries said, adding that such projections make him skeptical of the plan as stated.

Black Rock Petroleum Company's website features two profiles — that of Philip Andrews, president of the subsidiary company Torrance Petroleum, and of Zoltan Nagy, the company's president, controlling executive officer, treasurer, secretary and director. Both profiles are illustrated, for the time being, with stock photographs. (Black Rock Petroleum Company)

Power plants in Alberta cannot be constructed or operated without approval from the Alberta Utilities Commission (AUC), and the province has other rules governing the production of electric energy.

The Quirk Creek plant would almost certainly need approval from the AUC to host the bitcoin machines.

Nagy said Black Rock hasn't reached out to provincial representatives but said the company was looking into it.

Questions around finances

Far more than a few computer towers in an office building, the sheer size of bitcoin mining facilities can be surprising. For example, in 2018, at the grand opening of Hut 8, a bitcoin mine in Medicine Hat, Alta., the facility started with 56 shipping containers each filled with 180 computer servers, operating around the clock.

Hut 8, which operates a bitcoin mine in Medicine Hat, Alta., says it is currently the biggest player from a bitcoin mining perspective in Canada, with 109 megawatts of installed power. (Kyle Bakx/CBC)

Black Rock Petroleum's filings with the U.S. Securities and Exchange Commission are limited, so its financial status is difficult to ascertain.

Alfred Lehar, an associate professor studying finance at the Haskayne School of Business at the University of Calgary, said it's hard to know definitively whether there is enough financial backing to make this deal happen.

"It's certainly a very junior company that does not have a lot of assets compared to big energy companies that we are used to here," Lehar said.
Armed guards

Under the terms of the Quirk Creek agreement, Black Rock's press release said, Black Rock would work in partnership with China-based Optimum Mining Host Ltd. (OMH), which would cover many of the costs anticipated to arise out of the arrangement.

Josh Goodbody is chief operating officer of Qredo, another cryptocurrency firm and a mining expert who used to work in China who has no connection to the Alberta project. He said consortiums of miners moving into North America have become increasingly common after China's crackdown.

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"Domestic miners [have] to internationalize themselves, set up an offshore or global presence, and do that in a place like North America," Goodbody said. "And [then], bring all of their hardware along with them."

According to Black Rock Petroleum, OMH would be responsible for providing 24/7 armed security guards at the site "with enforcement power."
Concerns over environmental impacts

Even if Black Rock Petroleum's proposal does not live up to its billing, the act of pairing natural gas and bitcoin mining is no new phenomenon.

Saeed Kaddoura, an analyst with the environmental think-tank Pembina Institute, called bitcoin mining a "parasitic process" — one that he characterized as being "energy gluttonous [while chasing] the cheapest electricity around the world."

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"We should be looking at the underlying technology of blockchain, and how can we utilize that to develop [the] technological sector in Alberta that supports the oil and gas industry," he said.

"But bitcoin mining in itself, I don't think that's something we should be attracting without any oversight."

As a way to store data securely, the blockchain is a decentralized ledger shared across multiple computer systems that publicly shares all transactions. Bitcoin uses the blockchain.

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In a statement, a spokesperson with Alberta Environment and Parks said the provincial government was "encouraged that we continue to attract new investments from around the globe that support a diversified economy."

"Alberta has also significantly reduced electricity emissions since 2007 as one of the first jurisdictions in the world with an emissions compliance framework while emissions in countries like China increased," said Paul Hamnett in a statement.

"Our oil and gas industry is at the forefront of innovation and a diversified energy future with emerging opportunities like hydrogen, helium, geothermal development and petrochemicals."

On Monday, the UN climate panel sounded a dire warning, cautioning "irreversible" climate impacts and warning that humans were dangerously close to runaway warming.

De Vries of Digiconomist said that report raised warning flags for bitcoin mining projects around the globe.

"Even if these miners are not going to be in Alberta, they will probably end up in different locations, where they will probably run on fossil fuels regardless," he said.

ABOUT THE AUTHOR
Joel Dryden
Joel joined CBC Calgary in 2019. Reach him by email at joel.dryden@cbc.ca