MLA Guthrie: Paris Climate Accord Kills Jobs

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In 2016, the United Nations (UN) along with various countries including Canada, ratified to the Paris Agreement. This agreement aims to keep average global temperature increases to below 2 degrees Celsius. No specific dates have been set as to when emissions targets have to be met, allowing countries to have flexibility in determining their own path.

Regardless of the Agreement terms, Canada, which has Environmental Social and Governance (ESG) second to none, should be given credit for already being a world leader in environmental responsibility. Our ethically produced oil & gas, coupled with our massive greenhouse sink (CO2 absorbing landscape of mountains, forests, plains, agricultural lands and large bodies of water), have resulted in a stellar ESG record.

As if troubled by these facts, Justin Trudeau made the aggressive goal to reduce greenhouse gas (GHG) emissions in Canada to 30% below 2005 levels by 2030. This equates to a target of 511 MT of CO2 eq or a reduction of 220 MT. Unfortunately, this goal becomes unrealistic when industrial growth since 2005 is considered. Another 84 MT was added onto former estimates bringing the total reduction goal to 304 MT.

From the 304 MT emission reduction, 25% is unallocated to any specific industry, 27% is attributed directly to Oil, Gas and Electricity sectors, while the remaining reductions depend on the decrease of fossil fuels in categories including buildings, heavy industry, transportation, waste facilities, and agriculture.

In July 2020, the Canadian Energy Center put out a research briefing called “Mind the Paris Gap” where they outlined the shortcomings of the Paris Agreement and the detrimental impact it will have on jobs and the economy across Canada. Their research shows that the unallocated portion of the emissions reduction commitment, along with increases since 2005 in industrial output, will produce a “Gap” or shortfall in meeting Paris of 112 MT of GHG emissions.

The briefing states Alberta’s Oil & Gas sector alone would be responsible for 28% of this shortfall. From this perspective, meeting this objective would be equivalent to eliminating emissions from Canada’s entire manufacturing sector!

The research goes on to estimate a Federal Carbon Tax of $116 /t by 2030 and a significant reduction in GDP growth. The data indicates there would be a $54B decline in Canadian GDP with $13.5B of it being from Alberta alone. Job losses attributed to meeting the Paris Gap are estimated at 300,000 full time equivalent positions.

Using available data (and ignoring the unallocated portion) I have calculated that Alberta would be required to reduce oil & gas production by 990,000 boe/d in order to meet current Paris goals. This amount is equal to 25.4% of current provincial production and it assumes no further increases in investment for additional crude. Alberta’s economy, and thus Canada’s, will be devastated if further measures are taken to meet Paris by 2030.

Since the 2016 Paris agreement, we have witnessed the true intent of Justin Trudeau’s ideological agenda-the elimination of fossil fuel usage. The oil & gas industry is Canada’s number one driver of economic prosperity and the largest contributor to job creation. To deliver such a heavy blow to our economy will lead to more bankruptcies and a decrease of investment in Canada.

We have witnessed a dramatic escalation in cost and regulatory burden on Canadians and industry through Liberal policies such as the Carbon Tax, Bill C-69 (the “No more pipelines” Bill), Bill C-48 (the West Coast Oil Tanker Ban), methane regulation and, most recently, the federal implementation of Net Zero.

As if these measures weren’t enough, the fiscally irresponsible and ideologically driven Speech from the Throne referenced further legislation of Net Zero policy and increased targets to exceed Paris by 2030. New taxes are expected to pay for these measures including a brand-new carbon tax called the Clean Fuel Standard.

These new costs to industry have been directly responsible for increased importation of foreign oil to Canada from countries with lower ESG than our country’s requirements and little concern for human rights.

Reliance on foreign oil has resulted in a massive missed opportunity for Canada, a flight of capital investment, decreased drilling activity and reduced investment into research and development as companies scramble to stay afloat. This dependence will continue to negatively affect the provincial treasury and place pressure on future program funding.

It would be hypocritical not to mention that the newly-elected CPC leader Erin O’Toole has agreed to follow Justin Trudeau’s lead and support the Federal plan to meet Paris targets. Furthermore, during the leadership campaign, he offered support to a “Net Zero” policy which would not be advantageous for resource or industrial sector development.

In his first meeting with Premier Legault in Quebec, O’Toole expressed his support for the energy sector adding that Canadian energy, forestry products and minerals are the best in the world and should be the first choice of the democratic world.

O’Toole has also committed to repealing Bill C-69 & C-48 so we should expect to see further CPC commitments that provide policy clarity and are more supportive of the energy sector.

Canada should be proud of our ESG record and vigorously defend the innovation occurring in the energy sector. Damaging our industry will only lead to increased emissions on a global scale as demand is replaced by foreign dictators ready to replace Canada’s reduced market share. The United States left the Paris agreement yet still led the world in GHG emissions reductions. Canada does not require UN policies to dictate our path. We were world leaders before Paris and will continue to be.

The underlying ambition of the Paris agreement and other initiatives of this nature is the elimination of fossil fuels. Governments and politicians calling for the implementation of Paris should fully understand and examine the economic impact. Considering the fragile state of our economy due to this pandemic we should be more cautious of moves that could negatively affect the welfare of our province and our country.