http://rabble.ca/blogs/bloggers/alberta-diary/2018/02/new-study-details-failure-oilsands-big-five-control-emissions
[links in on-line post]
New study details failure of Oilsands Big Five to control emissions
David J. Climenhaga
February 1, 2018
Almost completely forgotten amid the brouhaha yesterday about Alberta's
response to the B.C. government's plan to restrict the flow of diluted
bitumen through its territory was the new report from the Parkland
Institute that shows none of Canada's Big Five tarsands producers have
even set targets to bring their emissions in line with the 2015 Paris
Climate Agreement that Canada's federal government has signed on to.
Well, timing is everything in news, and there was no way the researchers
at the University of Alberta-based research institute could have known a
sensational internecine Pipeline War was going to break out yesterday
along the Rocky Mountain Cordillera between the social democratic
governments B.C. and Alberta. Parkland and the Corporate Mapping Project
went ahead anyway and released What the Paris Agreement Means for
Alberta's Oil Sands Majors with its dire analysis of "the social cost of
carbon."
The report's conclusion that the five giant oilsands companies are
causing as much as $2 trillion in pollution is probably more significant
for Alberta in the long run than the political posturing yesterday by
the NDP governments of B.C. Premier John Horgan and Alberta Premier
Rachel Notley.
The report by researchers Ian Hussey and David W. Janzen argued this
means the Big Five -- CNRL, Suncor Energy, Cenovus Energy, Imperial Oil,
and Husky Energy -- are significantly overvalued because of their
"carbon liabilities," which the researchers defined as "an estimate of
the social and environmental costs of carbon emissions embedded in
fossil fuel reserves."
"Even under the most conservative carbon cost scenario used in the
report, the carbon liabilities contained in the reserves of the Big Five
outweigh the total value of the corporations themselves, and taken
together are greater than the GDP of Alberta," said Hussey, the report's
lead author.
"The enormous cost associated with these reserves being combusted
underscores the simple reality that business as usual is not an option
for these companies," he added. "Unfortunately, we're not seeing that
reality reflected in their actions to date."
It needs to be noted that the problem of the social cost of carbon that
is eventually going to have to be paid by someone is not exactly news to
either environmentalists or the oil industry. But trying to put a number
to it -- even if it's one that's too big for normal mortals to grasp --
is important work.
All of the Big Five except Imperial Oil have acknowledged the Paris
Agreement, Hussey noted. But not one has set targets or implemented
material action in line with emissions reductions required to limit
global temperature increase to 2 degrees Celsius. "On the contrary, all
five corporations project increases in their total emissions for years
to come."
Hussey argued that "if all of the Big Five's reserves are ultimately
burned, the billions of dollars in carbon liabilities will be paid by
the public and governments through the cost of dealing with extreme
weather events, climate change mitigation, and health impacts."
He concluded: "If some of these costs are instead reflected accurately
in the bottom lines of these corporations, we'll start to see the kind
of responses from the Big Five -- which has to include leaving some of
their reserves in the ground -- that the reality of climate change demands."
Right now -- in Alberta generally and in oil industry circles -- the
idea of leaving reserves in the ground is viewed as pure insanity. Mark
my words, though, smart legal strategists in Canada and the United
States are hard at work developing ways to hold fossil fuel companies
liable for the costs of the environmental damage they are imposing on
communities and countries around the world.
As the report says, "most of the profits accrued by the Big Five and
their shareholders, who are mostly not Canadians (as of July 2017), are
'paid' by the public and the environment through coastal damage, extreme
weather events, decreased food production, and negative health effects."
Shareholders and some governments may view this as crazy talk right now
-- just as Big Tobacco once did -- but this message is bound to be
brought home eventually to large fossil fuel companies that profit to
the tune of hundreds of billions of dollars while lobbying to slow down
responses to climate change, to which they are contributing.
And work like that done in yesterday's Parkland report helps frame the
social costs of carbon in terms that are meaningful to ordinary
Canadians -- including pipeline advocates from Alberta and pipeline
enemies in B.C. alike, presumably.
I don't know if it worries other Albertans that the report's lowest
estimate of the five companies' total carbon liabilities, calculated at
$50 per tonne, is $320 billion, higher than Alberta's total gross
domestic product of $309 billion, but, by God, it should. The high
estimate of nearly $2 trillion was reached by calculating the
liabilities at $200 per tonne.
What the Paris Agreement Means for Alberta's Oil Sands Majors calls on
fossil fuel corporation shareholders and governments to demand increased
transparency from the Big Five. This should start with public disclosure
of how they model their emissions and creation and disclosure of robust
and science-based emissions-reductions targets that in line with
Canada's international commitments, it says.
For the time being, presumably, the inclination of the industry will be
to put beans in its ears and continue to call for growth -- abetted by
the Alberta government's friendly emissions cap, which allows dramatic
industry growth between now and 2030 despite the fact that would make it
impossible for Canada to meet its Paris Agreement commitments.
The Corporate Mapping Project is a six-year research and public
engagement initiative jointly led by the University of Victoria, the
Canadian Centre for Policy Alternatives B.C. and Saskatchewan Offices
and the Parkland Institute. It is supported by the Social Sciences and
Humanities Research Council of Canada.