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Here’s how Canada’s oil sands could collapse by 2030

Vice by Geoff Dembicki

Alberta’s bitumen may be obsolete much sooner than you think.

According to the oil industry our society will keep burning oil for a long time. The low oil prices that have wreaked havoc in Alberta and other oil-producing jurisdictions for the past several years are just a temporary slump. Prices will soon rise. Global demand will grow. Canada’s oil sands will expand by 53 percent. Any talk of the industry soon collapsing is “greatly exaggerated,” argues the Canadian Association of Petroleum Producers.

But more and more evidence suggests sunny predictions such as these are dead wrong. The global oil industry could be on the brink of a rapid and irreversible decline. If and when it begins, Canada’s oil sands would be one of the first major casualties.

This is a scenario that few people in Alberta want to acknowledge. Just the mere mention of it causes defensiveness and outrage. “We’re not going anywhere,” said Alberta Premier Rachel Notley after Prime Minister Justin Trudeau raised the prospect of an oil sands phase-out earlier this year.

“If Mr. Trudeau wants to shut down Alberta’s oil sands, and my hometown, let him be warned: he’ll have to go through me and four million Albertans first,” warned the Wildrose Party’s last leader Brian Jean.

Yet VICE spoke with two prominent economists—one in the US and one in Canada—who think we should take the prospect of an oil sands collapse very seriously. They think it could happen within the next decade. And there is little that anyone in Alberta, or Canada for that matter, can do to stop it.

They think the collapse could be set in motion by electric cars, self-driving technology, new business models for transportation and the international fight against climate change. They believe global oil demand will peak within the next few years. Oil prices will crash. High-cost sectors like the oil sands will shrivel while companies like Suncor and Exxon struggle to survive.

This will be financially devastating to the province of Alberta—as well as any other place on the planet that relies heavily on oil revenues. Alberta will lose a key source of income at the same time that it becomes liable for billions of dollars in ecological cleanup costs. Yet overall the Canadian economy will be fine. Oil is a small enough part of Canada’s GDP that the country as a whole won’t suffer catastrophic losses.

If you accept this scenario is a likely possibility—and there are compelling reasons to do so—then we should be doing all we can to help places like Alberta transition off oil. Because in the end, building more oil pipelines while denying the looming threats on the horizon will only screw us further.

***

Most people imagine societal change as a slow and linear process. But in reality, change can often be the result of sudden and unforeseen disruptions. Tony Seba is fascinated by these disruptions. He’s spent years studying them. And the Stanford University futurist and economist regularly tries to predict when and how they’ll occur. Seba’s most recent prediction is a doozy. He argued in a report this spring that gasoline and diesel-powered vehicles will effectively vanish from American roads by the year 2030. Large fleets of self-driving electric vehicles will replace them. “It’s going to make no economic sense to own a car—ever,” Seba argued.

Here’s how he thinks this scenario will unfold: Though electric vehicles make up a tiny percentage of vehicle sales, there is clear evidence that this is changing. Volvo will only build electric and hybrid models starting in 2019. Large European cities are moving to ban combustion engines. Tesla has a higher market valuation than General Motors. China is eager to get into the market. It’s not hard to see where all this leads. “The cost of electric vehicles is coming down substantially,” Seba said.

That’s only part of the story though. The model of car ownership is also changing. Only a decade ago, the idea that you would pay for access to a fleet of vehicles via a powerful computer in your pocket was unthinkable. But Uber is now valued at $68 billion and Car2Go has over two million members. Companies like these are making it culturally acceptable to think of vehicles as a service instead of a consumer good. And they are building a vast digital infrastructure for ride-sharing in the process.

See article here……..


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Record number of oil and gas firms go bust as renewable energy revolution begins to bite

The world’s largest private power production company warns the sector that renewables could drive the oil price as low as $10 a barrel.

Independent by Ian Johnston / January 3, 2017

A record number of oil and gas companies became insolvent last year, according to a new study which environmentalists said highlighted the need for the UK to prepare for the move to a low-carbon economy.

They warned that the loss of jobs in the sector when it becomes clear that fossil fuels can no longer be burned because of the effect on global warming would lead to “desolate communities” unless people were retrained to work in the “new industries of the 21st century”.

The study by accountancy firm Moore Stephens found 16 oil and gas companies went insolvent last year, compared to none at all in 2012.

After oil prices fell from about $120 a barrel to under $50 for most of the past year, smaller firms in the sector were unable to cope, Moore Stephens found.

Jeremy Willmont, who carried out the research, said: “The collapse of the price of oil has stretched many UK independents to breaking point.

“The last 15 years has seen a large increase in the number of UK oil and gas independents exploring and producing everywhere from Iraq to the FalklanIslands.

“Unless there is a consistent upward trend in the oil price, conditions will remain tough for many of those and insolvencies may continue.”

His report said North Sea oil producers were facing more “headwinds” because of the need to decommission a number of offshore rigs.

Dr Doug Parr, chief scientist at Greenpeace UK, warned the ultimate demise of the fossil fuel industry would create “desolate communities” unless the Government took steps to help the country move to a low-carbon economy.

“As the warnings from climate science get stronger, now is the time to realize – as a utility chief recently warned – that the future is not in fossil fuels,” Dr Parr said.

“It’s also time for Government to recognize that we should not leave the workers stranded, but provide opportunities in the new industries of the 21st century.”

The utility chief cited by Dr Parr is Thierry Lepercq, head of research at French energy company Engie, who recently told Bloomberg that the growth in renewable energy could push the cost of oil down to as low as $10 in less than 10 years.

“Even if oil demand continues to climb until 2025, its price could drop to $10 if markets anticipate a significant fall in demand,” he said.

Engie, the world’s largest private power production company, is increasingly investing in renewables and selling off coal-fired power stations and fossil fuel exploration rights.

The firm recently carried out research which found the Provence-Alpes-Cote d’Azur region, home to about five million people, could save 20 per cent on energy costs by 2030 by switching to 100 per cent renewable sources.

And Mr. Lepercq added: “The promise of quasi-infinite and free energy is here.”

However Joseph Dutton, an associate research fellow with Exeter University’s Energy Policy Group, said fossil fuels would be around for some time to come.

“There’s a real battle between fossil fuels and renewables in power generation,” he said.

“But in terms of renewable transport, we are so far behind where we need to be to tackle climate change.

“In fuels and chemicals, I think fossil fuels are set to remain for the foreseeable future.”

And Mr Dutton said any oil and gas supplies held by the insolvent companies would have been taken over by larger companies.

“Their assets are being picked up by the bigger companies. It’s not as if they are falling out of the picture. The companies might be, but the oil and gas reserves are going to different companies,” he said.

“It may well be that what they hold will still be produced further down the line.”

“Whether this represents a shift away from fossil fuels to renewables is maybe too early to say.”

See article here…….

 


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A Dam big problem: Fracking companies build dozens of unauthorized dams in B.C.’s Northeast

DesmogCanada By Ben Parfitt • Wednesday, May 3, 2017

A subsidiary of Petronas, the Malaysian state-owned petro giant courted by the B.C. government, has built at least 16 unauthorized dams in northern B.C. to trap hundreds of millions of gallons of water used in its controversial fracking operations.

The 16 dams are among “dozens” that have been built by Petronas and other companies without proper authorizations, a senior dam safety official with the provincial government told the Canadian Centre for Policy Alternatives, which began investigating the problem in late March after receiving a tip from someone with knowledge of how widespread the problem is.

Two of the dams built by Progress Energy, a wholly owned subsidiary of Petronas, are towering earthen structures that exceed the height of five-storey apartment buildings. Petronas has proposed building a massive liquefied natural gas (LNG) plant in Prince Rupert, which if built would result in dramatic increases in fracking and industrial water use throughout northeast B.C.

The two dams are so large that they should have been subject to review by B.C.’s Environmental Assessment Office (EAO). Only if a review concluded that the projects could proceed would the EAO have issued a certificate, and only then could the company have moved on to get the necessary authorizations from other provincial agencies.

But nothing close to that happened because the company never submitted its plans to the EAO before the dams were built.

Now, five years after construction on the two dams began, the CCPA has learned that B.C.’s Environmental Assessment Office has belatedly launched an investigation. Other agencies are also scrambling to figure out what to do as evidence emerges of extensive unauthorized dam-building on their watch.

Another 13 Progress Energy dams are being retroactively reviewed by the Oil and Gas Commission (OGC).

https://fusiontables.google.com/embedviz?q=select+col3+from+1rwobOb455T_ezVa2Epb1IPWZhbMpaLCAVOyBNEyk&viz=MAP&h=false&lat=56.645010834464756&lng=-124.52555292089988&t=3&z=7&l=col3&y=2&tmplt=2&hml=TWO_COL_LAT_LNG

That’s because on December 23 of last year, the company applied simultaneously to the province for 13 water licences to impound water behind dams that it had already built.

The huge challenge now before the OGC, which has authority to grant water licences to Progress Energy and other natural gas companies operating in the region, is that under BC’s old Water Act as well as the new Water Sustainability Act, companies are not allowed to build dams that impound freshwater without first obtaining authorizations.

It now falls to the OGC well after the fact to decide whether the water licences will be granted. Because engineering plans for the dams were not submitted to provincial dam safety officials before the structures were built, the OGCmust also retroactively determine whether the dams are structurally sound, and if they are not, whether they should be ordered shut down.

The latter is a distinct possibility. During its investigation the CCPA uncovered evidence that one of the dams built by Progress/Petronas showed signs of failure last year, which would have sent a wall of water and mud rushing toward a gas-processing plant not far downstream. The OGC subsequently ordered the company to dewater the dam.

Complicating matters considerably, the dams are located close to natural gas industry drilling and fracking sites. Fracking involves pumping immense amounts of water under extreme pressure belowground to “liberate” gas trapped in dense rock formations. Throughout northeast B.C., the intensity of that pressure-pumping has triggered numerous earthquakes, including a 4.6 magnitude tremor at a Progress/Petronas fracking operation in August 2015 that was felt 180 kilometres away.

That means in addition to assessing the general engineering integrity of dozens of unauthorized dams, the OGCmust also consider how seismically sound they are as well.

Progress/Petronas Dams Just The Beginning

Progress/Petronas is not alone. Details on many more unpermitted dams are expected to emerge in the coming months as other natural gas companies apply retroactively for water licences.

The full extent of the unauthorized dam building is not yet publicly known. But according to Jim Mattison, a former comptroller of water rights for the provincial government, the extensive network of energy industry dams and other water impoundment structures is vast. And, to date, largely unregulated.

During a phone interview on April 20, Mattison said there are “certainly more” than 100 large dams that have been built by or for energy companies operating in the region. At the end of the day, he says, additional fieldwork may reveal that there are “200 or more” such facilities.

Mattison has reached that conclusion after researching the problem under contract to B.C.’s Ministry of Forests, Lands and Natural Resource Operations (FLNRO). The research includes analysis of satellite imagery and remote sensing data.

Mattison said that work shows that there are literally “thousands” of artificial water bodies across northeast B.C. The list includes everything from small dams and dugouts built by landowners to capture and divert water on private farmlands that is subsequently sold to fracking companies; borrow pits used to excavate earth for roadbeds and other oil and gas company infrastructure; and, at the top of the pyramid, massive earthen dams built on crown lands by Progress/Petronas and others.

This vast and dispersed network of water impoundment structures is likely to have extensive effects on everything from aquifers, to ecologically unique and sensitive muskeg systems, to water levels in fish-bearing streams and rivers, to beaver ponds and wetlands, and to fish, animal and plant communities of importance to numerous First Nations.

Problem Known – Public Not Notified

Records obtained by the CCPA indicate that the Oil and Gas Commission, Ministry of Forests, Lands and Natural Resource Operations and the B.C. Environmental Assessment Office are all aware of numerous unauthorized dams, and that they may contravene key provincial laws and regulations including the Water Sustainability Act, the Environmental Assessment Act, and provincial dam safety regulations.

Even though some of the dams may pose significant environmental, public health and safety risks, the CCPA has found no documentation that a single provincial government agency or ministry has issued a press release or safety advisory about the problem. Nor has it found any evidence that the government has charged or fined any companies for the unauthorized dams that they’ve built.

Evidence that Progress Energy and other companies had built numerous unauthorized dams began to surface last spring, but without fanfare. In a rarely read quarterly report, the OGC published a 24-word “summary” of an order it had issued to Progress Energy.

The summary said:

Remove excess water from storage structure, and submit engineering assessment and certification of structural integrity in accordance with the Dam Safety Regulation.”

It ended with two words: “Compliance ongoing.”

The offending dam’s location was vaguely listed as “Town.”

In mid-April the CCPA requested a copy of the full order from Graham Currie, the OGC’s director of corporate affairs. Currie was also asked to comment on Progress’s water licence applications and the EAO investigation. On April 21, he refused to provide any information, saying in an e-mail that the OGC had to “remain impartial as a government agency” during the writ period or interregnum. He recommended applying for a copy of the full order by submitting a formal Freedom of Information request, a process that typically takes months. Typically, government rules restrict the release of information during the election period, but the rules usually apply only to Cabinet documents.

In response to questions sent by e-mail, Progress Energy communications advisor, Eryn Rizzoli, acknowledged that the company had been ordered to de-water the dam.

Progress Energy has complied with all conditions as detailed in Order 2016-003 49(1)(b). Dewatering of this facility was completed in May 2016. The facility is not in use at this time,” Rizzoli wrote.

“Progress actively assesses and monitors the company’s entire water impoundment inventory,” Rizzoli added. “This includes conducting engineering and geotechnical assessments and submission to relevant government and regulatory agencies, where required.”

Contacted by phone on April 5, Scott Morgan, head of FLNRO’s Dam Safety Section, recounted learning more about the scope of unauthorized dam building by Progress and other companies during a conference call last summer. On the call were several OGC officials, one of whom said at one point: “By the way, we have a problem.”

As the call progressed, Morgan recounted hearing that there were “dozens” of dams that had been built without proper authorizations, including at least nine that were “over nine metres high.” Two of the larger dams were more than 15 metres high, which meant they should have been reviewed by the Environmental Assessment Office before being built.

Fracking Operations Drive Corporate Rush For Freshwater

Petronas and other companies drilling and fracking for natural gas in the Montney shale gas play in B.C.’s Peace River region now pressure-pump up to 160,000 cubic metres of water underground at individual gas wells.

The largest of the Progress/Petronas dams holds almost enough water to complete one major frack job, meaning it holds considerably more water than that which spilled from the Testalinden dam, a 10-metre high structure that failed near the community of Oliver in 2010, triggering a mudslide that destroyed five homes but miraculously took no lives.

In the event Petronas decides to invest in its proposed Prince Rupert LNG facility, it will need access to considerably more freshwater.

Collectively, the 13 water licence applications filed by Progress Energy on December 23 amount to a significant water grab, an attempt to corral up to 683,000 cubic metres of freshwater for use in the company’s fracking operations.

Only the most basic information on the applications is publicly available. But what is clear is that Progress/Petronas intends to store stream water at each location. In many cases, the water source is unnamed. But in other cases, streams are listed including Caribou, Barker, Apsassin and Grewatch creeks. The database records say nothing to indicate that in all 13 cases, Progress Energy was applying for permission to store water behind dams that it had already built.

Field Visit Confirms: Dam First, Water Application Second

The information is contained in a searchable database maintained by FLNRO’s Water Allocation Section. The Ministry retains powers to issue water licences to all applicants except fossil fuel companies, which apply to the OGC for such authorizations. B.C.’s oil and gas industry is the only entity in the province that has its own dedicated regulator when it comes to water authorizations.

The CCPA asked the Water Allocation Section for the precise geographical coordinates for Progress Energy’s new water licence applications. The coordinates were then used to locate one of the sites, about a half-hour helicopter’s journey to the northwest of Charlie Lake, near Fort St. John.

Eventually, after flying over brown stubbly hayfields, ranging cattle and remote farms, dusty grey aspen forests, dark spruce trees and myriad natural gas company operations, a distinct rectangular structure with large earthen berms was spotted in the distance.

Fracking dam

An unauthorized Progress Energy dam where millions of gallons of freshwater was found impounded in early April. It is among “dozens” of unpermitted dams spread across northern B.C. Photo © Garth Lenz, all rights reserved.

Closing in on the site, it was clear that massive amounts of earth had been excavated to make walls that topped out at about nine metres in height. The sloped walls or berms had trapped an enormous amount of freshwater that was coated in a thin sheet of ice on a cool mid-April afternoon. Water could be seen trickling into the reservoir along a dark brown muddy industrial road down which a large yellow excavator was making its way.

The dam had been strategically built to create a new reservoir that would capture freshwater flowing downhill. Clearly as far as Progress Energy’s “application” for Water Licence 9000226 was concerned, the dam was already built and the water already impounded.

According to the scant information available on the government’s website on water licence applications, the dam at the site is capable of supplying 135,475 cubic metres of freshwater. It is the single-largest application for water storage of the 13 Progress Energy has retroactively applied to have approved.

Following the field visit, Progress confirmed in an e-mail to the CCPA that there are “existing fresh water storage structures” at the 13 locations and that last year’s passage of the new Water Sustainability Act “necessitated” that the company now apply for water licences at those locations.

Progress did not elaborate on why it felt that under the old Water Act it was unnecessary for the company to apply to the government before building its dams.

First Nations Consultation?

Almost all of B.C.’s natural gas deposits are located in the northeast of the province, where local First Nations are signatories to the historic Treaty 8. Signatories to the treaty include the Blueberry River First Nation. The Nation is currently before the courts in a potentially precedent-setting lawsuit in which it is seeking compensation for the “cumulative” environmental damages to its traditional lands and waters from a host of industrial developments including natural gas drilling and fracking operations, hydroelectric dams, mines and logging activities.

Given that so many dams were built without proper oversight, First Nations including Blueberry River are unlikely to have been properly notified or consulted about what the companies intended to do on their traditional lands. For example, had proper protocols been followed, water licence applications would have been turned over to First Nations for review and consultation well in advance of such licences being granted, let alone dams being built.

Conflicting Accounts

During a short telephone conversation in early April, EAO project assessment manager Teresa Morris confirmed the two massive Progress Energy dams are being investigated, that Progress is aware that the unauthorized dams are under scrutiny, and that the company had indicated to the EAO that it would apply to have the projects “exempt” from the EAO process.

At present, there is nothing publicly available on the EAO website indicating that the unpermitted dams are being looked into by the agency.

Morris said the Progress dams would be listed on an EAO registry of projects if and when Progress Energy applies to have them retroactively exempted from EAO review.

Asked if the EAO had received such an exemption request, Morris said in early April and reconfirmed on April 18: “No we have not. When we do, a public webpage will be established.” She referred all further questions to David Karn, a senior communications officer in government communications and public engagement with the Ministry of Environment. Contacted on April 28, Karn said that the interregnum period prevented him from commenting.

A listing by the EAO would be the first indication that a provincial environmental agency was reviewing dams built by one of the biggest LNG proponents in the province.

According to Progress Energy, however, the company has already filed its exemption applications. In response to questions from the CCPA, Progress Energy’s Eryn Rizzoli wrote:

The British Columbia Environmental Assessment Office is reviewing two project descriptions submitted by Progress in accordance with the Environmental Assessment Act and Reviewable Projects Regulation.

“Progress Energy has requested an exemption from the full review process for two existing fresh water storage structures that have been in service for several years without any incident or failure.”

The CCPA has yet to receive a response from the province explaining why the EAO’s office is saying one thing and Progress is saying another.

OGC to Decide Safety of Gas Industry Dams

Until recently, responsibility for the safety of all dams in the province, including any built by fracking companies, rested with dam safety officials in FLNRO. Proper procedure required the companies to first apply to the OGC for a water licence, and then for dam-design and building plans to be submitted to FLNRO for review and approval.

But that has recently changed. Last year, former provincial water comptroller, Glen Davidson, granted an OGCrequest for one of its staff to be designated a dam safety officer.

The only two dams that may fall outside the OGC’s purview are the two massive structures currently under investigation by the EAO.

Three years ago, Davidson appeared before the Joint Review Panel, which had been convened to review the Site C hydroelectric project. During his presentation, Davidson noted that all dams “are inherently dangerous structures” but that risks “can be minimized and managed.”

I think surprisingly to most folks, on average, we get about one dam failure a year in B.C., but most of these are very, very low consequence and they probably don’t even make the papers, so most people are not aware of them,” Davidson said.

One tool to minimize risks that higher consequence dams could fail, Davidson said, is for dam safety officials to review engineering specifications on dams before they are built. Davidson noted that provincial dam safety officials have internal capacity to do that, but that there is also precedent when dam safety officials feel it is warranted to hire independent engineers to do more rigorous assessments.

Davidson noted that when his office had to deal with many independent power producers and their plans to build run-of-river dams, the office hired “an independent engineer that reported to the Province. And we asked that independent engineer to review the designs, the design drawings and give the Province advice on subsequent approvals.”

The precedent is there, then, for the OGC to insist that independent engineers be brought in to advise on the quality and the safety of the dozens of dams built by Progress/Petronas and others.

Implications

As investigations continue on at least three fronts, provincial government officials must now decide just how many companies may have broken rules and what the consequences of breaking those rules should be, but also how government regulation of the industry could have broken down as badly as it did.

Under the provincial Environmental Assessment Act, a company breaks the law when it builds anything that is a “reviewable project” under the Act, without first obtaining permits to do so. A first offence can trigger a $100,000 fine. All subsequent offences can trigger fines of up to $200,000.

Penalties for companies found guilty of “general offences” of the provincial Water Sustainability Act can be far more severe. If a company “without lawful authority … diverts water from a stream or aquifer” or if it “constructs, maintains, operates or uses works” that have not been authorized, it can be fined up to $200,000 and personnel can be jailed for up to six months. If the company is found guilty of an “ongoing offence” the penalty may be a $200,000 fine per day.

The consequences for “high penalty offences” under the act are even more severe. If a company “constructs, places, maintains or makes use of an obstruction in the channel of a stream without authority to do so”, the penalty can be up to a $1 million fine and one-year prison sentence. The fine for a continuing high penalty offence can be as much as $1 million per day.

The province’s Dam Safety Regulation also itemizes numerous requirements for companies building dams to ensure their safe operation following construction, the violation of which can result in fines of up to $200,000 for general offences and up to $1 million for major offences.

The problem here goes way beyond whether or not one company broke the law,” Calvin Sandborn, legal director of the University of Victoria’s Environmental Law Centre says. “The problem is that vast swathes of the landscape – of entire ecosystems, of entire hydrological systems – are disrupted, likely permanently.”

The province still doesn’t have a handle on the scope of the risks.  And they are making feeble attempts to deal with this region-wide disaster,” Sandborn added.

Knowledge that so many dams have been built across northeast B.C. raises many questions. In the coming weeks, the CCPA will strive to obtain answers to those questions.

How widespread is the construction of unauthorized dams by energy companies?

Which companies are engaged in building unauthorized dams?

Where are these dams, and how large are they?

Which dams are now under retroactive review by the Environmental Assessment Office and/or Oil and Gas Commission?

Why have these reviews and investigations not been made more public? (Only following a tip by a person with inside knowledge did the CCPA begin this investigation and gain information needed to complete this report.)

Why do no fines or penalties appear to have been levied to date?

How many dams have been decommissioned and where are they?

Does it make sense for the OGC to both issue permits to oil and gas companies allowing them to drill and frack for natural gas and to be the public’s environmental and public health and safety watchdog as well?

Or has the time come to turn that important monitoring and enforcement role over to an arms length agency?

With at least dozens of unpermitted dams already built in the province’s northeast fracking fields, the time has come for answers to such questions and a whole host more.

Photo: ©Garth Lenz

Ben Parfitt is a resource policy analyst with the Canadian Centre for Policy Alternatives. This investigation was undertaken as part of the Corporate Mapping Project (CMP). The CMP 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 Alberta-based Parkland Institute. This research was supported by the Social Science and Humanities Research Council of Canada (SSHRC).

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‘Talk Is Cheap’: G20 told to end public subsidy of all dirty fuels by 2020

Common Dreams by Andrea Germanos, staff writer / July 5, 2017

New report reveals that public financing by wealthiest governments belies stated commitments to Paris climate goals.

Extreme weather trends continue. CO2 emissions remain above the safe threshold. And President Donald Trump’s decision to ditch the Paris climate pact underscores the need for other world leaders to live up to their promises to uphold the accord.

But a new report by a group of environmental advocacy organizations presents a sobering finding: G20 governments are bankrolling fossil fuel projects big time. In fact, they’re pouring four times more public finance into fossil fuels than they are into clean energy projects.

Released Wednesday by Oil Change International, Friends of the Earth U.S., the Sierra Club, and WWF European Policy Office, Talk Is Cheap: How G20 Governments Are Financing Climate Disaster shows that between 2013 and 2015, public fossil fuel financing from these countries added up to over $71.8 billion annually. The bulk of that amount—84 percent—funded oil and gas projects. Public financing for clean energy, meanwhile, averaged just $18.7 billion annually during that time frame.

“Our research shows that the G20 still hasn’t put its money where its mouth is when it comes to the clean energy transition. If other G20 governments are serious about standing up to Trump’s climate denial and meeting their commitments under the Paris Agreement, they need to stop propping up the outdated fossil fuel industry with public money,” said Alex Doukas senior campaigner at Oil Change International and report co-author.

This public finance comes by way of insurance, loans, and grants, and is provided by national and multilateral development banks, export credit agencies, and majority state-owned domestic banks, the report explains.

“Particularly egregious,” the report says, is that G20 public finance for exploration for new reserves of fossil fuels averaged $13.5 billion a year. But “most already-discovered reserves must remain unburned to avoid the worst impacts of climate change.”

“The best climate science points to an urgent need to transition to clean energy, but public finance from G20 governments drags us in the opposite direction. We must stop funding fossils and shift these subsidies.”
—Alex Doukas, Oil Change International
Japan had the dubious honor of the biggest fossil fuel financer, averaging $16.5 billion annually for 2013-2015. For comparison, its support for clean energy finance for that time frame averaged $2.7 billion a year.

The United States, for its part, averaged $6 billion annually in public finance of fossil fuel projects, compared to $1.3 billion for clean energy projects.

G20 governments’ public financing of fossil fuel projects presents a three-pronged dagger to climate change efforts, the groups argue. From the report:

Lowering the cost of carbon emissions, thus undermining carbon pricing: To the extent that it functions as a subsidy to fossil fuel production, public finance for fossil fuels provides an incentive to emit carbon, encouraging higher levels of fossil fuel production and consumption. In this way, government spending to support fossil fuel production acts as a negative carbon price, pulling in the opposite direction of climate policy and sending confusing market signals.

Driving high carbon lock-in: High carbon lock-in—aided by public finance for fossil fuels—makes the transition to clean energy more difficult and costly.

Making uneconomical dirty energy economical: Public finance subsidizes unburnable carbon, enabling production of ‘zombie energy’—that is, energy that would otherwise be uneconomical to produce.

Among the recommendations for G20 leaders the report lays out are setting a 2020 deadline for ending the public financing of all fossil fuel projects, including new exploration; expanding support for “truly clean technologies”; and providing support for development countries to make a swift clean energy swift “in line with developed countries’ historical responsibility.”

“The best climate science points to an urgent need to transition to clean energy, but public finance from G20 governments drags us in the opposite direction. We must stop funding fossils and shift these subsidies,” Doukas said.

The report is released just days before the G20’s two-day summit in Hamburg, Germany, where climate change is expected to be a major agenda item.

According to Kate DeAngelis, international policy analyst at Friends of the Earth and report co-author, “G20 countries should take this moment in Germany to start in earnest the massive financial shift from dirty fossil fuels to clean, renewable energy for the entire world.”

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Market abandoning fossil fuels, says Adnan Amin

Adnan Amin, the director of the International Renewable Energy Agency, chats with National Observer on May 18 at a renewable cities conference in Vancouver.

National Observer b May 19th 2017

Global financial markets are abandoning major fossil fuel projects because they are afraid of stranding multibillion-dollar investments, says the head of an intergovernmental renewable energy partnership.

In a wide-ranging interview with National Observer, Adnan Amin, the director general of the International Renewable Energy Agency (IRENA), said that development of major fossil fuel projects such as pipelines will ultimately harm the operators since renewable power is becoming more attractive to consumers and businesses.

And he said that any government that wants to approve or support such a project must “think carefully” about the consequences if it becomes obsolete before the end of its useful life.

“The question the government needs to ask itself is if you are using taxpayer resources to subsidize fossil fuel infrastructure for the future, is that a wise investment given the fact that this may end up as a stranded asset?” he asked.

“I think if we go with the logic of economics, (building a new pipeline) it will harm the (operators of) pipelines in the longer term, because when you invest in a pipeline, it’s a 30 year investment — amortization takes place over decades… So, any decision maker who’s making a decision today on fossil fuel infrastructure which is going to be amortized over two or three decades, needs to think very carefully about whether that’s going to end up as a stranded asset.”

IRENA is an intergovernmental organization founded in 2009. It’s based in Abu Dhabi in the United Arab Emirates — an oil-producing nation — and has more than 170 member countries dedicated to promoting and supporting the world’s transition to clean energy. The United States is an active member of IRENA, but Amin said he was still waiting for Canada to make a decision about joining the agency after a few conversations with federal Natural Resources Minister Jim Carr.

Amin, who has been described as the planet’s ambassador for renewable energy, was interviewed Thursday at a downtown Vancouver hotel where he was attending a ‘Renewable Cities’ conference hosted by Simon Fraser University’s Centre for Dialogue.

While Amin questioned the logic in building new pipelines, he said he understood that there were other factors at play in Canada.

“I know that there’s been a lot of discussion around the fact that certain pipeline projects have been approved, which people were expecting that with the new (Trudeau) administration wouldn’t happen,” he said. “But governments have to deal with real things like jobs, investment and economic growth. So having said that, I still think that the messaging coming out of the (Trudeau) government is positive for low carbon energy.”

The Bull Creek Wind Project began operating in December 2015 in the Alberta municipal district of Provost. Photo courtesy of BluEarth Renewables Inc.

Amin also praised Vancouver Mayor Gregor Robertson and other municipal leaders who are implementing aggressive policies to reduce or eliminate carbon pollution from transportation and buildings.

“I think those are (delivering) the messages to the market, that, once they accumulate, become real drivers of investment and the direction of the energy transition,” he said. “… And we need to support foresighted cities like Vancouver who are taking these measures which are still at the leading edge of what’s happening.”

Members of the Trudeau government have notably said that Canada is “back” on the international stage in efforts to fight climate change, through policies that create jobs and protect the environment at the same time. Earlier this week, Environment and Climate Change Minister Catherine McKenna also introduced details of the government’s proposal to make polluters pay for carbon emissions.

While noting the Trudeau government is promoting clean energy, Amin underlined findings in a recent IRENA report that Canada lags behind many other countries when it comes to action encouraging renewable energy.

“In Canada, we feel that there is a lot of potential of doing more, but the policy construct of how we’re going to get there is not yet very clear,” Amin said.

Carr’s office referred questions to his department which told National Observer in an emailed statement that Canada was still reviewing “potential” membership in IRENA to advance its strategy to fight climate change while promoting clean growth and jobs.

In the interview, Amin also said that the U.S. has a vibrant market for renewables, and that he believed U.S. President Donald Trump’s administration would support the industry because of the strong business case for clean energy.

“I think the current administration is led by someone who is very much oriented toward business,” Amin said. “And if the business case is strong, I see no reason why it shouldn’t continue to be strong in the U.S.”

Merran Smith, executive director of Clean Energy Canada — a research group housed out of Simon Fraser University — said that Amin’s message highlights what has been missing in Canadian debates about the transition to renewable energy.

“The narrative in Canada is pretty stuck on the oil and gas economy and that the transition to renewable energy and to electricity to power cars and industry is going to be a slow transition,” Smith said in a separate interview. “Whereas, Mr. Amin and the facts are showing that this transition is happening far faster than people expected.”

Smith, who also spoke with Amin on stage at the “Renewable Cities” conference, noted that Canada has many companies that could benefit from growth in renewable energy, including in the mining sector.

“So Canadians need to understand that clean energy is the energy of the future and we actually have great opportunities to benefit from that with jobs and business development,” she said. “Canada needs to focus on the opportunities.”

 

Here’s is an edited transcript of National Observer’s interview with Adnan Amin:

 

What did IRENA mean when it said in a report last March that Canada and U.S. had rather conservative policy ambitions?

AA: When you look around the world, you see a number of countries that have more ambitious renewable energy targets in place (and they) have policy frameworks that are much more enabling and have clear energy policy type of structures that are incentivizing different types of approaches to renewables. And in the U.S. and in Canada, it’s still very unclear. Under the Obama administration, they had an energy policy which was technology neutral, but which was open to everything. So there was no real sense of direction about whether they were incentivizing a low carbon energy future and how they were going to do it.

There was legislation around it, but there was no clear policy framework.

And I think it’s somewhat similar to the situation in Canada…

But the upside of this is that you have a very vibrant ecosystem of innovation and investment that’s happening in North America. In the U.S., that’s one of the fastest moving markets for renewable, last year. Some of the more iconic investments in wind and solar generation were in the United States.

In Canada, we feel that there is a lot of potential of doing more, but the policy construct of how we’re going to get there is not yet very clear.

IRENA, Vancouver, Adnan Amin, renewables, International Renewable Energy AgencyAdnan Amin, the director of the International Renewable Energy Agency, gestures as he speaks to National Observer about clean energy on May 18 in Vancouver. Photo by Zack Embree, courtesy of SFU Centre for Dialogue

Some people in Canada have criticized the current government here for saying the right things about renewable energy without backing it up with concrete policies. Do you think that’s fair criticism?

AA: I think you have to understand that in a country that has achieved a level of prosperity from hydrocarbons, the transition to a low carbon future has some important economic repercussions. But (we’re) beginning to have good messaging from the (Trudeau) government, so I think that’s a very positive thing. How that is executed is really the issue and how you make a transition from a set of inherited decisions concerning investment in infrastructure in hydrocarbons to a more clean energy focus is going to be a very difficult transition.

And I know that there’s been a lot of discussion around the fact that certain pipeline projects have been approved, which people were expecting that with the new administration wouldn’t happen. But governments have to deal with real things like jobs, investment and economic growth. So having said that, I still think that the messaging coming out of the government is positive for low carbon energy. I think what we really need to understand much more are what are the concrete pathways through which that can be achieved. We believe that the renewable energy part of the energy mix is not highlighted as much as it should be. Canada is very fortunate to have very low cost, very efficient hydro(electric) system. Hydro can be the backbone of the clean energy system for the future. Your electricity is already very clean. But the challenge in the future is what’s going to happen with energy in the end-use sectors and (whether) Canada has a very comprehensive approach to what the future of electricity is going to be. Because moving to a renewable energy future means moving to a future where electricity becomes the dominant form of energy and that we are innovative in what the modes of transmission and utilization of that clean energy is going to be.

One of recommendations from the federal government’s National Energy Board modernization panel last week was to improve federal expertise on the transmission of electricity as pipelines become less important. Do you think this would be a step in the right direction?

AA: Absolutely. I think that’s a very positive message because when you look around the world, we’re finding that in more and more countries, the economic case for renewable energy is very compelling. I met recently the minister of energy of India, Piyush Goyal, with whom we’ve had a long discussion about coal and powering India. He always had the position that his primary responsibility was to provide power to poor people in India and to Indian consumers and industry and that he needed to find the cheapest alternative to do that. And if coal was cheap, he was going to use it.

What we were telling him at the time was that the trajectory of cost reduction for renewables is what we’re seeing around the world and that he really should be thinking about the future in renewable terms.

So, when I last met him, it was just a few days after the last auction of utility scale solar PV (photovoltaic) in India, which came in at US$0.04/kwh. That puts solar PV competitive with coal. So I said to him, ‘is this going to make a difference?’. And he said ‘yes.’ So, they’re very excited about it and you’re seeing that in more and more countries. The latest, lowest cost project was in Abu Dhabi recently which was below US$0.03/kWh. And we’re seeing this in Latin America, in Africa, in Asia, these are the costs that are coming in. And I think that’s going to make it a renewable future but we have to come to terms with what system we’re going to use for transmission of that energy and for the utilization of that energy. And that’s where regulation, financing and investment really has to come.

A Solar farm and wind turbine produces energy in the Saerbeck Bioenergy Park in Germany on July 4, 2016. Photos by Audrea Lim

Can the approval of a pipeline project, whether it’s Donald Trump approving Keystone XL, or the pipelines that were approved here in Canada (Kinder Morgan and Enbridge), does it harm development or the emergence of renewables, when the government decides to approve a project like that?

AA: I think if we go with the logic of economics, it will harm the pipelines in the longer term, because when you invest in a pipeline, it’s a 30 year investment — amortization takes place over decades. What we had been discussing in the decarbonization report, which we prepared in the G20 framework, is the fact that we’re seeing the prospect for more and more stranded assets in coal power generation, but also in fixed infrastructure like pipelines. So any decision maker who’s making a decision today on fossil fuel infrastructure which is going to be amortized over two or three decades, needs to think very carefully about whether that’s going to end up as a stranded asset.

Do you think this is why pipeline companies are calling out for financing and haven’t been able to make final investment decisions on major projects? Is this the market speaking about the risks or the prospects for success?

AA: Absolutely. We’re seeing more and more big investors, institutional capital becoming very risk averse on fossil fuel infrastructure. So I think that in terms of private capital that will come into this, it’s becoming more constrained space for fossil fuel infrastructure. The question the government needs to ask itself is if you are using taxpayer resources to subsidize fossil fuel infrastructure for the future, is that a wise investment given the fact that this may end up as a stranded asset?

Can you talk about how the Trump administration’s new policies might affect the emergence of renewables?

AA: What we’ve seen so far is that the renewables market in the U.S. was very vibrant last year. That was driven by the fact that the tax credits for renewables were extended for five years by the previous administration. So that’s the main impetus. You’re finding that renewables are cost-competitive in the grid in several states, including major Republican-dominated states. Somebody was telling me recently that they were listening to (Trump administration Energy Secretary) Rick Perry talking about energy and he kept talking about what great things they had done with wind energy in Texas. So I think that the U.S. at the base is very rational in economic terms, when they make investments. So I think that given the cost equation we’re seeing for renewables today, the business case for renewables is still strong in the U.S. I think the current administration is led by someone who is very much oriented toward business. And if the business case is strong, I see no reason why it shouldn’t continue to be strong in the U.S.

What’s your message at this conference?

AA: The first message is, being in Vancouver, which has taken such a leadership role under Mayor (Gregory) Robertson on the clean energy transition is that urban and regional actors are becoming more and more important in determining the direction of the energy transition. So when cities like Vancouver or much bigger cities than Vancouver, start to incentivize investments in clean energy, start to demand the procurement of renewable energy in their operations, start to create regulated frameworks for mobility that becomes cleaner for electric transportation, for energy efficiency in buildings, that starts to send messages to the market. And I think those are delivering messages to the market, that, once they accumulate, become real drivers of investment and the direction of the energy transition… And we need to support foresighted cities like Vancouver who are taking these measures which are still at the leading edge of what’s happening.

And Canada is not that different from others. Although Canada has not been so active in the international space in the last years, the fact is the issues that you are dealing with are very similar to issues that many other countries are dealing with. But I sense enthusiasm and energy for sustainability in Canada which is very encouraging. So I’m very happy to be here for that reason.

Are you meeting with anyone from the federal government in Canada during this trip?

AA: No. We’re still waiting for Canada to join the agency. I’ve met Jim Carr a few times. I’ve had wonderful conversations with him. I think he’s an important leader in this space. He gave me some encouraging signals. I’m hoping that he’ll come through on those.

See article here…….

 

 


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Auditor general questions Canada’s plan to phase out fossil fuel subsidies

Michael Ferguson wins battle against Liberal government to obtain information crucial to his reviews

By Kathleen Harris, CBC News Posted: May 16, 2017 

'We found that Finance Canada still had not defined what an inefficient fossil fuel subsidy was, nor could the department tell us how many inefficient fossil fuel subsidies there could be,' said Auditor General Michael Ferguson, who tabled his annual spring report Tuesday.

‘We found that Finance Canada still had not defined what an inefficient fossil fuel subsidy was, nor could the department tell us how many inefficient fossil fuel subsidies there could be,’ said Auditor General Michael Ferguson, who tabled his annual spring report Tuesday. (Sean Kilpatrick/Canadian Press)

(Note: CBC does not endorse and is not responsible for the content of external links.)

Canada’s federal spending watchdog has won a battle with the Liberal government to gain access to information he deemed critical to evaluating whether the country is on course to phase out fossil fuel subsidies.

Releasing a series of spring audits Tuesday, Auditor General Michael Ferguson expressed frustration that he wasn’t able to gain key documents, including budget analyses, from Finance Canada to determine what progress has been made to meet Canada’s 2009 G20 commitment.

He aired his grievance in a special message to members of the House of Commons detailing his fight.

“Our right to freely access information is fundamental to our work, and a cornerstone that protects our independence,” Ferguson wrote.

During a news conference after tabling his report, Ferguson called any situation where the government is hampering the ability of his office to do its work “extremely concerning.”

He noted that while battles over the disclosure of information go back several decades, this current tug-of-war unfolded over the last 18 months since the Liberals took office.

In a sudden about-face just minutes after that news conference concluded, Finance Minister Bill Morneau announced the government would change the rules and provide requested information of a similar nature in future.

“I believe it will help the auditor general to do his work, and will show that Finance took a broad approach in defining the scope of potential fossil fuel subsidies by identifying and rigorously analyzing all tax expenditures that support fossil fuel exploration or production,” he said.

The Auditor General’s office confirmed to CBC News that the information relevant for this report will not be supplied as the audits have already been completed.

“The same request could be captured in the scope of a future audit, however at this point, no such audit is planned,” read the reply to a query from Ferguson’s office.

But Ontario NDP MP David Christopherson called the government’s resistance a “major red flag.”

‘No plan’

“The department seems to have no plan with regard to this commitment, which is a problem for a government that has made big commitments to climate change,” Christopherson said. “The Liberals’ refusal to provide information to the auditor general strikes at the very heart of accountability and makes a farce out of the Liberals’ promise of openness and transparency.”

Conservative finance critic Gérard Deltell accused the government of hypocrisy for presenting itself as an open government, then hiding critical information.

“Sometimes it’s not good for the government, but it’s good for the Canadian people,” he told CBC. “We must keep in mind that we’re here for the Canadian public, not for political purposes.”

Ferguson’s audit found that while Canada has recognized that inefficient subsidies for fossil fuels undercut efforts to reduce greenhouse gases, the government has not yet implemented its plan to end subsidies by 2025.

Finance Minister Bill Morneau

Finance Minister Bill Morneau announced today the government would turn over records related to phasing out fossil fuel subsidies to the Auditor General of Canada. His department had previously refused to provide the information. (CBC)

Finance Canada and Environment and Climate Change Canada have not defined what that commitment means in the Canadian context, or demonstrated whether tax reforms are actually working, his audit concludes.

“We found that Finance Canada still had not defined what an inefficient fossil fuel subsidy was, nor could the department tell us how many inefficient fossil fuel subsidies there could be,” Ferguson said.

“We asked Finance Canada to provide us with its analyses of the social, economic and environmental aspects of these subsidies. The department did not give us that information.”

Central Liberal promise

Green Party Leader Elizabeth May said she was “shocked” the government attempted to seal access to information related to a “central” Liberal promise on the climate change file. She said federal subsidies still amount to about $1 billion, which could be better spent on health care and infrastructure.

A statement from Environmental Defence said Canadians should be “alarmed” that the federal government tried to withhold important information from the auditor, which leaves the public in the dark about the degree to which the government is subsidizing oil and gas companies.

The organization said other G20 countries are being more transparent about subsidies.

“The U.S. and China have even opened their books to each other,” the statement read. “The secrecy of Canada’s Finance Department is extremely concerning, and undermines our democracy.”

Ferguson’s audits drilled down on a number of programs, gauging the government’s efforts to reduce the risks of fraud and corruption and measuring mental health supports for Mounties. He said a “clear theme” that emerged is that the government is not putting its plans into action.

“Government departments must make sure that they implement their programs in the way that they were designed and communicated to Canadians,” he said. “Programs will not produce their intended results if departments do not put into practice what they said they were going to deliver.”

Fix for better results

While issues raised in the audits are “concerning,” Ferguson said they can be fixed to achieve better results.

Other highlights of the audits:

  • The RCMP is not providing adequate mental health supports for its members. After announcing a mental health strategy, the national police force did not implement key programs, make services a priority or commit the necessary resources to support them.
  • Some supply-managed goods are entering Canada without proper duties being paid. The audit estimated that in 2015, the Canada Border Services Agency should have assessed $168 million in customs duties on imports of quota-controlled goods that exceeded volume limits, including dairy products, chicken, turkey and eggs.
  • The government is not doing enough to limit risks of corruption involving border immigration officials.
  • Transport Canada is not “actively engaged” in addressing infrastructure needs at remote northern airports that impact efficiency and safety, including runway lighting and navigational aids.
  • Changes to the temporary foreign workers program have not done enough to ensure Canadians aren’t being squeezed out of jobs by international labourers, especially in the fish processing sector.
  • The government may be spending more to collect customs fees on parcels valued at less than $200 than it actually retrieves in revenues. Right now, the threshold for customs duties is set at $20 for parcels imported into Canada by mail or courier.

Corrections

  • This story has been updated to make it clear the auditor general’s report looked at the government’s plan to phase out fossil fuel subsidies. An earlier version dropped the word “subsidies” from the headline and lead.
    May 16, 2017 11:55 AM ET


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Seven oil multinationals that are pulling out of Canada’s tar sand

Environmental Defence by Patrick DeRochie  March 14, 2917

Last week brought big news that Royal Dutch Shell, one of the world’s largest multinational oil companies, would sell off its Canadian tar sands assets.

Shell’s withdrawal from the tar sands is the latest move in a growing trend in Canada’s oil industry: the world’s largest oil companies are retreating from the tar sands, as low oil prices, stronger policies to fight climate change, and the accelerating global shift to renewable energy make the tar sands uneconomical.

Rather than trumpeting the tar sands to global oil and gas executives, as Prime Minister Trudeau did last week, it’s time for Canada to plan for a managed decline of the industry and a just transition for workers and communities affected by the shift to a clean economy.

 

Here are seven examples in the last three months of multinational oil companies scaling back or eliminating their holdings in the tar sands:

  1. Statoil. In December 2016, Norway’s Statoil sold all of its tar sands assets at a loss and exited Western Canada altogether, due to low oil prices, domestic pressure from Norwegians, and an “energy market (that) has changed since (2007) quite considerably.”
  2. Koch Industries. Just days after Statoil left the tar sands, Koch Industries, owned by the infamous climate-denial-funding Koch brothers, ended plans to build its proposed Muskwa tar sands project west of Fort McMurray.
  3. Imperial Oil. In January 2017, Imperial Oil, the Canadian subsidiary of ExxonMobil, announced it would “write down” 2.8 billion barrels of its bitumen reserves in Alberta. This was the company acknowledging that the tar sands oil could not be economically produced under prevailing low energy prices.
  4. ConocoPhillips. In February 2017, American oil giant ConocoPhillips was forced to admit that 2 billion barrels of its previously “proven” tar sands reserves might have to stay in the ground. ConocoPhillips also suggested low global oil prices made the reserves uneconomical to produce.
  5. ExxonMobil. Also in Febraury 2017, the United States’ largest oil company, ExxonMobil, announced that it can no longer profitably develop up to 3.6 billion barrels of its tar sands reserves unless oil prices rise. That’s 3.6 billion barrels of oil that could be left in the ground.
  6. Marathon Oil. On the same day as Shell’s tar sands divestment, Houston-based Marathon Oil signed a deal to sell its Canadian tar sands operations in an effort to cut the highest-cost assets from its portfolio.
  7. Royal Dutch Shell. The Marathon divestment was drowned out by the bigger news of Shell selling off all of its tar sands assets for $7.25 billion. The oil giant’s CEO said that the tar sands “are no longer a strategic fit for Shell.”

Shell’s huge sell-off of its tar sands assets was complemented by a commitment to invest $1 billion per year in renewable energy by 2020. It was also accompanied by a warning from Shell’s CEO, Ben van Beurden, that public faith in the oil industry was “just disappearing”. He went on to say that government regulations could render oil and gas reserves “economically infeasible” to exploit. Meanwhile, the CEO of Statoil, which divested its tar sands assets in December 2016, said on the same day that “the low-carbon future will reshape the energy space.”

The world’s largest oil companies are finally starting to see the writing on the wall. The world is flooded with cheap oil that can’t be burned as we ramp up global climate action. The oil industry’s business model is becoming obsolete and the first casualties will be high-cost, high-carbon sources like tar sands oil that can’t compete in a world of low prices and declining demand.

It’s time for Canada to get serious about a managed decline of the tar sands and a just transition for workers and communities. The first thing we can do is stop building new fossil fuel infrastructure that is no longer needed. Tell the federal government to reject the risky Energy East pipeline.

 

See article here……..