IEA IS MORE CREDIBLE THAN UCP

Alberta portrays IEA’s net-zero plan as ‘driven by activists’


The Alberta government is rebuffing an influential International Energy Agency plan to reach net-zero carbon pollution as an “unreasonable” and “unfeasible” proposal “driven by activists.”

Alberta Energy Minister Sonya Savage made the comments in a statement sent to Canada’s National Observer in response to the release of the IEA’s “Net Zero by 2050” report, which lays out a roadmap for reaching net-zero emissions. It concluded there was “no need for investment in new fossil fuel supply.”

Last year, Savage cited the IEA’s forecasts in an op-ed as “proof” that the world’s energy markets will continue to demand oil “decades” into the future. “Under every single scenario and forecast out there, oil will continue to be used and dominate the energy mix,” she told media on another occasion.

But on Tuesday, the IEA painted a picture of an energy future where Canada’s proven reserves of crude oil — the third-largest in the world after Saudi Arabia and Venezuela, and located almost entirely in the Alberta oilsands — will be increasingly difficult to get to market.

The Paris-based agency sees coal demand being almost wiped out, oil demand cratering by 75 per cent and demand for natural gas cut in half by 2050. “No exploration for new resources is required and ... no new oilfields are necessary,” the IEA wrote.

Savage noted that the new report was out of step with previous agency forecasts that looked more favourably at fossil fuel demand. The minister then suggested this was because the IEA, a body made up of 30 member countries that works to secure the global oil supply, was now being influenced by climate action advocacy.

“Unlike the energy outlook reports that the IEA regularly issues, this is a policy proposal driven by activists, something that the IEA freely admits,” she said.

“There are also major sections of this report that are unreasonable or unfeasible in the real world. The suggestion that global oil and gas production should shift away from socially and environmentally responsible jurisdictions like Alberta and instead substantially increase the market share of OPEC (the Organization of the Petroleum Exporting Countries) is not in the interest of our country, the environment or global energy security.”

Savage did not expand on the definition of “activists.” The agency said the report originated from discussions with the United Kingdom’s government as part of its presidency of the UN climate summit, COP26, in November. Specifically, the IEA had convened a net-zero summit with COP26’s president, former U.K. business secretary Alok Sharma.

In the agency’s net-zero scenario, the price of oil is projected to drop to US$35 per barrel in 2030 and US$25 in 2050, which would make it far more difficult for oilsands operations to stay profitable given that the industry needs to take extra steps to refine Western Canada’s heavy, sulphur-rich crude oil into usable products compared to some other jurisdictions.

“This report is a game changer,” said Dale Marshall of Environmental Defence. “It’s really at odds with basically every government in Canada that in some way benefits from oil and gas development.”

The IEA’s findings could potentially change how Canada approaches critical climate decisions, says Catherine Abreu, executive director of Climate Action Network-Canada.

These projections directly inform modelling used by the Canadian government to make climate decisions, said Abreu, which is why it’s important for future modelling to reflect a path to a climate-safe future.

“If the government of Canada is receiving information from Canada Energy Regulator (CER) saying our oil and gas production is going to continue to grow and we are going to get much more money for our oil and gas on international markets than is realistic … that limits the level of ambition that the Canadian government can then bring to our climate plans,” said Abreu.

The CER projected in November 2020 that Canadian crude oil production will peak in 2039 and natural gas production will peak in 2040.

Darren Christie, chief economist for the CER, said the regulator is working on finalizing the scenarios that will be used to project Canadian energy production for its 2021 Energy Futures report.

“The IEA report is certainly one of the ones that we'll look at as we develop our assumptions heading into the 2021 edition of our long-term projections,” he said in an interview. He noted that this does not mean they will “just take the assumptions that we have in this particular IEA report and transpose them into our 2021 assessment.”

Abreu and Marshall hope the net-zero report will lead the CER to do its own 1.5 C compatible modelling.

Canada also has work to do in the transportation sector.

The IEA report says ending the sale of new internal combustion engine passenger cars by 2035 is key to achieving net zero, but Canada’s target is to reach 100 per cent of new light-duty electric vehicle sales five years later, in 2040.

Transport Canada spokesperson Sau Sau Liu said the department was assessing whether its “level of ambition” on zero-emission vehicles (ZEVs) “continues to remain consistent with the urgency of confronting climate change” given the integrated nature of the North American auto market.

In a recent meeting with U.S. climate envoy John Kerry, Environment Minister Jonathan Wilkinson said the federal government is working with the United States to implement a 100 per cent ZEV sales target as soon as possible.

“We are continually assessing progress to targets to determine if additional measures are needed to meet them,” said Liu.

The transportation sector is Canada’s second-largest emitter, and emissions from this sector continue to increase because of reliance on SUVs and trucks.

“A five-year lag is a big deal,” said Marshall. “We haven't seized the opportunities around efficiency and electric vehicles despite the fact that those electric vehicles are now, on a lifecycle basis, cheaper to own than the internal combustion equivalent.”

As a rich, industrialized country, Marshall says Canada should be working to phase out internal combustion engines sooner than 2035.

He says how the government responds to the report’s findings — particularly the assertion that there can be no new investment in fossil fuel production — will be very telling.

“This really does starkly reveal how out of touch our Canadian governments are, and if governments and companies continue to push for expanding oil and gas … what they are saying is, ‘We are doing this despite the fact that we know that this means climate chaos,’” he said.

If governments ignore the call to stop investing in fossil fuel projects and are slow to embrace the potential of clean energy technologies, Marshall said workers will suffer.

“The transition will be something that is imposed upon them in a way that is maybe quicker, more painful and more disruptive than it could be otherwise if we had a gradual transition, one that is supported and that's fair for workers and communities,” he said.

Natasha Bulowski, Local Journalism Initiative Reporter, National Observer