After years of seeking to mollify the oil and gas sector, Justin Trudeau is promising to get much tougher with climate-change regulations if his Liberal Party forms government again.
The Liberals’ 2021 campaign pledges would undoubtedly provoke renewed battles with conservative-led provinces, and potentially more court challenges from them. The climate plan that Trudeau laid out on August 29 would reach deep into provincial jurisdiction over the electricity system and natural resources in order to impose regulations aimed at moving Canada to net-zero emissions by 2050.
The headline promise was a get-tough approach to the oil and gas industry, which accounted for 26% of Canada’s greenhouse gas (GHG) emissions in 2019. And to be clear, it is not just the carbon-intensive oil sands that are targeted, but conventional and offshore oil as well as natural gas production and processing.
The more ambitious strategy would face a backlash in provinces like New Brunswick Ontario, Saskatchewan and Alberta where governments have resisted federal climate policies and unsuccessfully challenged carbon pricing in the courts.
Since 2015, the Liberals have attempted a balancing act with the oil and gas sector, which had contributed mightily to the country’s economic growth over the previous 15 years and is heavily concentrated in western provinces, where distrust of the central government and especially the Liberal Party is endemic.
Today’s Liberal campaign talk promises a more muscular approach to the industry. It’s vague about how a future government would actually implement the platform. But it is anchored in the overarching pledge to reduce GHGs by up to 45% by 2030 and put the country on track to achieve net-zero emissions by 2050.
That’s in line with the Paris climate agreement’s goal of limiting the increase in global average temperatures to well below 2°C, preferably to 1.5°C.
With the election only two weeks away, the Liberals are trailing slightly in the polls and need to generate some momentum if they are going to return to power, even with a minority government. The climate crisis remains one wedge issue on which they hope to blunt the Conservatives.
The Conservative Party, led by Erin O’Toole, says it would roll back Canada’s GHG target to the 30% reduction originally pledged under the Paris Agreement, despite a requirement in the treaty deal for countries to adopt more ambitious targets after their initial commitment. More importantly, the Conservative plan is not in sync with the goal of limiting the increase in average global temperatures to well below 2°C. Even at that level, people in Canada and around the world can expect costly and painful disruptions, with droughts, floods and rising sea levels, as witnessed last week by the flooding that inundated U.S. cities like New York, New Orleans and Philadelphia.
For its part, the NDP has set a GHG reduction target of 50% by 2030 and proposes an even more aggressive emissions reduction plan than the Liberals’, one that would also face challenges from provinces.
Trudeau’s climate platform says GHGs from the oil and gas sector must stop growing this year, and have a clear path to reach net-zero emissions by 2050. To meet that goal, the industry would face a series of five-year targets, though it’s not clear who would set them or whether they would have the force of regulations.
The Liberal government passed legislation this spring to enforce its net-zero goal and set up a “net-zero advisory committee” that will recommend how to get there, including how much each sector should be expected to contribute. That recommendation would form the basis of enforceable standards, one Liberal strategist said, speaking off the record.
Provincial pushback would be expected
The governments of Alberta and Saskatchewan have set no broad emissions targets – including for their energy industry – and have not endorsed the net-zero goal. Those governments unsuccessfully challenged the Liberals’ carbon pricing plan with the Supreme Court of Canada and would almost certainly balk at any federal regulations that forced industry to either curtail production or invest huge sums to cut emissions on existing facilities.
The Supreme Court ruling made it clear the federal government does not have carte blanche in setting climate change policy. University of Calgary law professor Martin Olszynski says Ottawa would be able to rely on criminal law of the Canadian Environmental Protection Act (CEPA) to regulate industrial emissions. However, the federal government could open itself to a provincial challenge if it allows too much regulatory flexibility in the rules, Olszynski says.
The party’s climate platform contains other notable pledges that would raise hackles in certain provincial governments.
It vows to cut methane emissions from the oil and gas sector by 75% from 2012 levels by 2030. That goal is a significant increase from the target of 40% by 2025 that was set by Trudeau and former U.S. President Barack Obama in 2012 and was largely supported by industry and provincial governments at the time.
The move would require a massive, industry-wide effort to improve detection and capture of methane, especially in the gas fields of northwestern Alberta and northeastern British Columbia, where the process of hydraulic fracturing, aka fracking, results in large methane leaks.
Methane is a powerful GHG. It’s roughly 80 times more powerful than carbon dioxide but also has a shorter-term impact in the atmosphere. In a dire assessment published on August 9, the UN’s Intergovernmental Panel on Climate Change said the world must dramatically reduce methane pollution to slow the rate of global warming in the short term.
The three western provinces have their own regulations aimed at achieving the 40% reduction that Ottawa set in 2012, but environmental groups argue the provincial approaches are insufficient to meet that goal, let alone achieve a 75% cut by 2030.
Brawl brewing over electricity regulations
While the oil and gas industry is the usual battleground between Liberals and provinces on climate change, Trudeau’s most recent plan sets up a potential brawl over regulation in the electricity sector.
The Liberal platform promises to enforce a “clean electricity standard” that would result in an emissions-free power grid by 2030. Ottawa has set pollution standards for power plants in the past, but it is the provinces that regulate the electricity system. Often, the provinces actually own the generation and transmission assets that comprise the grid.
An “emissions free” grid would not only require the complete phase-out of coal-fired power by 2030 (which Canada committed to doing in 2018), but either end use of natural gas in power plants or force utilities to adopt expensive technology to capture and sequester carbon dioxide emissions. Carbon capture and sequestration (CCS) is technically feasible but is not currently widely in use.
That would leave several provinces, including Ontario, that are looking to use gas to replace coal in a bind. They’re planning to use natural gas to provide an uninterrupted supply of power and to back up renewable electricity generation, which can be intermittent.
The federal government already sets emissions standards for new power plants that burn gas, but its pledge to force a zero-emissions standard would likely provoke a battle with several provinces. Quebec, too, would likely join a provincial revolt – more to defend its provincial jurisdiction in the electricity sector than to protect its natural gas assets.
The Liberal commitments for reducing GHGs in the oil and gas sector and on the grid are aggressive and controversial, but they illustrate the depth of effort that the country would require to meet the more ambitious targets that line up with global climate change goals.
Absent an about-face by provincial governments, a less pugnacious approach would avoid renewed tensions in the federation but leave Canada as a laggard in the effort to avert catastrophic global warming.
