Liberals table 'Just Transition' legislation in House
Episode Stats
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Summary
The Western Standard's energy editor, Sean Pulser, joins me to discuss the Canadian government's new plan to transition to a net zero energy economy, and why it's bad for Alberta's oil and gas workers.
Transcript
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Hello, Western Standard viewers. I'm Nigel Hannaford for the Western Standard.
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I have with me this morning, Sean Pulser, the Western Standard's energy reporter, energy editor.
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I think I'm a little bit of both. You're wearing both hats.
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All I know is that Sean Pulser's articles are trending at the moment
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because they deal with a very important subject that came down yesterday,
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and that is the federal announcement of the Canadian Sustainable Jobs Strategy,
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which sounds about as interesting as a long drink of warm water,
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but it actually is of vital importance in this province and, indeed, to the rest of the country
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because, really, it's just that old just transition,
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the removal of good, well-paying energy jobs from the economy
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and substituting with, well, I guess the famous phrase was truckers and janitors.
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Not that we have anything against truckers and we certainly need janitors,
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What is the Canadian Sustainable Jobs Act supposed to do,
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Well, it's supposedly to transition people away from, I guess,
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They want to say polluting, but I don't think that that's really the case.
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Well, the carbon dioxide that comes from the birds and bees definitely isn't,
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but, you know, there's probably a case to be made
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that the stuff that comes off the top of the smoke stack could be considered polluting.
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It's the other crowd they're worried about, perhaps.
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If I put you in a room with pure carbon dioxide,
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Well, it's about transitioning to net zero jobs,
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which in itself doesn't sound like a bad thing,
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but I guess the point is you're taking away from one pile
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when Alberta is ramping up on things like hydrogen from natural gas
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which is up about 10 million barrels a day since the pandemic.
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Oil demand is going to hit over 100 million barrels a day this year
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because you had an insightful article yesterday about some of the estimates.
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But as I understand it, the Canadian Sustainable Jobs Act,
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This is just the first part of it that was issued yesterday
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and it has to do with what, forming an advisory council?
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Basically an advisory council that reports to the government
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on the policies of, I guess, in some kind of totality
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on how it's going to affect workers, presumably in oil and gas,
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because they are assuming that world oil demand
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is going to fall by about 75% by 2050 to 24 million barrels a day.
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And that was the number that really caught my eye.
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And I had to go back and do some double checking.
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Well, forming an advisory committee doesn't sound too bad.
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Danielle Smith, the premier, came out very strongly against this
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and basically said, look, this is provincial jurisdiction
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that you're interfering with and we're not going to let you do it.
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Because it ties in with this idea of emissions caps,
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decarbonizing the power grid by 2035 instead of 2050,
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The whole range, the whole gamut, fuel emission standards,
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all these things that are supposedly going to tie into this reduced demand number
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of 25 million barrels a day, which the whole policy in its totality
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It's called their net zero scenario, which is basically the unicorn
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If everybody had, this is what everybody in the world would have to do
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if we are going to hit net zero as a planet by 2050.
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So that means immediate cessation of investment in any new oil and gas
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They have a policy scenario, which is what would happen if all the countries
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did what they said they were going to do, that they've committed to
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And that number is not 25 million barrels a day.
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It's probably closer to about 75 to 80, maybe even 90.
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So we're talking instead of 75% reduction in oil demand,
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So really, the writers of this legislation have just grabbed the number
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that looked best to them, fitted their narrative best, and gone with that.
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But it doesn't really mean that there's any strength to it.
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Is this, what did you say, rainbows and unicorns?
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So if we are going to achieve net zero by 2050 and assuming that everybody else in the world
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is going to do this at the same time simultaneously, and assuming that somehow Canada really makes
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a meaningful difference in the whole totality of the emissions picture, you know, given that we are only 1%
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of global emissions, then that is the number that they would use.
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Now, in the U.S., they have the Energy Information Agency.
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So it gets a little confusing because you have the IEA and you have the EIA.
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So the Energy Information Agency is the U.S. government's energy advisory, whereas the IEA is based in Paris.
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Now, what the EIA is saying in their base case is that oil demand is going to go up to about 105 million barrels a day,
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Yeah, well, it's a little, so we've gone from about 90 million during the pandemic back up above 100
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for the first time, and so I think we're about 102, and then so in the next couple years,
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they're forcing it to go up to about 105, and then pretty much flatline around 100.
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The Canadian government chooses to think that everybody is going to do what the Canadian government
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thinks is best, and the oil demand will plummet to 25% of what it is today.
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And they're basing this legislation on that assumption.
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They are, and there's absolutely no chance that the world is going to hit net zero by 2050
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because India and China, which account for a combined total of about 40% of the world's total emissions profile,
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I think it's 2060 in India's case and 2070 in China's.
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So how are the Indians, and this very much relates to the assumptions behind this legislation,
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how do the Indians and the Chinese generate electricity?
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Well, I mean, China has added probably the most renewable sources of any other country in the world,
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but the fact is that they are still adding a coal-fired power plant a week.
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So the solution worldwide would seem to be switch from coal.
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If the solution in Canada is to switch from coal generation to gas generation of electricity,
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then wouldn't that be a worthwhile thing to do worldwide?
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They have the coal-fired stations that need replacement.
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I noticed that the federal government, when it suits them, says,
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oh, well, it's all one atmosphere, so we have a right as the federal government
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to intrude into your provincial jurisdiction and set the rules for you,
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something that Premier Smith is challenging, of course, but, I mean, that's the federal point of view.
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But when it becomes worldwide, then suddenly the one atmosphere argument doesn't apply anymore.
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Well, we have enough natural gas in Canada that if we did export it to all these countries,
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we could offset our whole entire emissions profile just by exporting LNG to China.
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The problem is that we don't have the infrastructure.
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And we have a very onerous regulatory regime that precludes these things from getting built.
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Now, you say, Sean, that we don't have these things, but we were on the track of building them.
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The Northern Gateway was a pipeline to the coast.
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There were, at one point, multiple, like almost an embarrassingly unlikely large number of applications
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to build LNG plants on the coast of British Columbia.
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Well, Nigel, I know that you're reaching retirement age.
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So the question I have to ask you is would you put your pension into the hands of the Canadian government
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And so really what the issue is, is investor confidence.
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So the people who have these hundreds of millions and billions of dollars in New York and London
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and Switzerland around the world, when it comes to looking at Canada as a place to be investing those dollars,
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generating reasonable rates of return in your lifetime, hopefully, so that you can enjoy your retirement.
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So basically that's the other piece of it, is the investment puzzle.
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And Canada is becoming known around the world as a place where you cannot get things done.
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Yesterday, the Federal Minister, Jonathan Wilkinson, made the announcement,
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This is the first step in 10 actions that we're going to take.
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And immediately, Premier Smith came out with a counter statement.
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Well, you know, the Alberta advantage is predicated on infrastructure, access to resources, supplies.
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She has a very ambitious plan to build out hydrogen infrastructure for just as one example, which is it's going to require more natural gas, not less.
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The same thing with reaching some of these clean energy goals, because there's this attitude in Ottawa that somehow they're going to be able to do it with the NDP and the trade unions,
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when in fact all the expertise is siloed here in Calgary.
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I mean, we are producing the oil and gas, so if anybody's going to figure out how to do it with lower emissions, it's going to be here.
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Do you put her statement yesterday in terms of her Sovereignty Act, where she basically said, look, if you try to legislate in our area of jurisdiction, we're going to say no?
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I think it's coming to that, and I think she's been very cautious right now about using it as a big stick, but it is definitely going to be the line in the sand.
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This is going to be like, once you cross this line, then that's it.
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We are going to have absolutely no choice but to ignore it.
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You're doing a great job on the energy file, and I think you're going to be the busiest man in the office here for months to come.
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These guys are on the front lines helping to draft smart and intelligent firearms regulations and legislation in Canada,
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