Earlier this year, the New Democratic Party took power after 44-years of Conservative rule. Canadians have lot of emotions and hopes invested in the new government, and so far so good. Alberta Premier Rachel Notley recently announced a series of environmental measures which will see the country drastically lower its carbon footprint, expand the renewable energy sector and lower its reliance on fossil fuels.
Alberta is home to the world’s third largest crude reserve. The industry that exploits Alberta’s tar sands was born 50 years ago once with the single biggest investment of the time – a $250-million bet by a forerunner of today’s Suncor Energy Inc. Unlike conventional drill rigs used in Texas or Saudi Arabia, Canada’s tar sands had to mined using manufacturing machinery. It has proven to be a good bet, and explorations of the 170-billion-barrel resource has flourished, and so have the greenhouse gas emissions. Based on the current production forecast, the sector will see its emissions grow by 56 megatonnes by 2020, offsetting all the reductions gained by phasing out coal-fired electricity in Ontario and lower outputs in other provinces. In the 2009 climate summit at Copenhagen, Harper pledged that Canada would reduce its emissions by 17 per cent from 2005 levels by 2020, a commitment that will be impossible to meet given the expected growth in the oil sands.
But the government has changed, and in Alberta at least tar sands extractors will meet some tough times. It’s tough as it is, seeing how the price hovers at $20 a barrel, a level not seen for international crude in 12 years. It’s the cheapest crude in the world. Now, Notley says come January 2017 each tonne of CO2 will be taxed with $15, and $22.50 from 2018. There’s also a limit on emissions from the province’s oil sands industry. Parks and Environment Minister Shannon Phillips announced a 100 megaton limit on emissions from the sector: a major reduction from the 267 megatons produced by the oil sands in 2013, according to Environment Canada.
“Six million barrels of tar sands per day are currently permitted, but under this plan and under existing technology, half of that – three million barrels per day that would have burned – will now stay in the ground,” Karen Mahon, director of ForestEthics Canada, told the National Observer.
Canada’s tar sands are one of the world’s single largest carbon emitters, and environmental groups have long lobbied against it. This announcement couldn’t have sent a better signal with just a few days before the COP 21 summit in Paris kicks off.
“This is the day we stop denying there is an issue and this is the day when we start doing our part,” said Notley. “Climate change is real: it is caused by human activity.”
The tax in Alberta will level the field between fossil fuels and renewable energy. Faced with having to pay more, consumers and industry will choose to invest in renewable energy. The province estimates the carbon tax will amount to roughly $470 in increased heating, electricity and transportation costs for an average household in 2018. Albertans are also told to expect to pay an extra seven cents per litre for gasoline and $1.68/ GJ for natural gas by 2018.
“It will help us access new markets for our energy products, and diversify our economy with renewable energy and energy efficiency technology,” Notley said in Edmonton. “Alberta is showing leadership on one of the world’s biggest problems.”
Some of the money will also be used to compensate certain industries and low-income residents affected by the forthcoming climate change policy, the provincial government has pledged.
The Canadian province of Alberta has also announced plans to phase out all unabated coal power by 2030. It was only yesterday that ZME Science reported the same would happen in the UK by 2025. A second huge blow to an already tanking industry. If that wasn’t enough, on Nov. 6 President Obama rejected the Keysone XL pipeline project which would have brought crude from Canada’s tar sands into the US. “America is now a global leader when it comes to taking serious action to fight climate change, and frankly, approving this project would have undercut that leadership,” Obama said.