Brian Zinchuk is editor and owner of Pipeline Online
Saskatchewan Minister of Energy and Resources Bronwyn Eyre/Handout
There are a lot of ironies when it comes to talk of a ‘just transition’ away from oil and gas, according to Saskatchewan Minister of Energy and Resources Bronwyn Eyre.
The minister spoke to the Saskatchewan Industrial and Mining Suppliers Association (SIMSA) Energy Forum on Oct. 6, held virtually due to the ongoing COVID-19 pandemic.
Eyre said she wanted to speak “about some of the backstories, that provide some nuance and context around the broader daily themes that people are hearing out there.”
Noting “The oil price is skyrocketing,” she pointed out, “What isn’t talked about is still very great uncertainty in the oil and gas sector, not only on the part of workers who feel, of course, once biten, twice, or thrice, shy about rejoining the sector. But also companies, which have debts, and of course, slowed down production rates and put major capital allocations on hold after the perfect storm last year.”
She said, “That perfect storm, of course, culminated really when President Biden cancelled Keystone XL. Clearly, he isn’t doing a lot to around the the Enbridge Line 5, in terms of support.
“Line 5 is a crucial artery that stretches up from the Enbridge mainline which transports 70 per cent of Saskatchewan’s oil. And so, we absolutely support Canada’s invoking this week (of Oct. 4) of the 1977 Transit Pipeline Treaty, which then-Senator Biden supported that all those years ago. But really, that pipeline treaty. couldn’t be more explicit. And I’m convinced that that under it, (Michigan) Governor Whitmer cannot block oil being transported through her state on this approved pipeline, the one that ironically was in the process of being made more secure.
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“And of course, there are lots of ironies when you look behind the headlines in the energy and resources sector. It’s ironic, for example, that that Quebec is preparing to formally phase out the oil and gas production and effectively leave fossil fuel resources in the ground, when, in turn, it’s so dependent via Line 5 to Line 9 on Western Canadian oil to stay to stay warm this winter.”
She pointed to a poll that indicated that 71 per cent of Quebeckers say they prefer oil from Western Canada. Eyre said 50 per cent of the oil Quebec uses is from Western Canada, and 50 per cent of Quebeckers would actually like to exploit that province’s own oil resources. “While car sales have gone down in Quebec, sales of SUVs light trucks and pickups have increased, so perhaps there’s hope there, after all.”
Just transition
Eyre said, “The federal government’s ‘just transition,’ as it’s called, is obviously a great current concern to Saskatchewan. And here’s why: if you carry out a transition too quickly, too glibly, three-quarters of workers in the oil and gas sector, who are who are already facing a great uncertainty, could lose their jobs; 450,000 jobs lost by 2050 to be precise. That’s according to a recent TD report on green transition. The challenge for us, in government, is to get the message out, that here, in Saskatchewan, our innovation already makes us one of the most sustainable oil and gas producing regions in the world. That is a just transition.”
She pointed out that enhanced oil recovery wells actually emit 82 per cent fewer greenhouse gas emissions that conventional oil wells, according to TD Bank.
Carbon trunk line
In September, Eyre announced policy enhancements meant to encourage carbon capture, utilizaiton and storage, with hubs that would allow the gathering of CO2 from multiple sites, for utilization in enhanced oil recovery. Essentially a carbon trunk line, such a system could gather captured carbon from Bethune, Moose Jaw, Belle Plain, Regina, Boundary Dam Unit 6 and Shand Power Station, and use it in enhanced oil recovery. But the sticking point is the federal government’s reluctance to allow an investment tax credit, as Whitecap Resources CEO Grant Fagerheim put it.
“And so, the question, of course, is why is the federal government so dead set against CO2 enhanced oil recovery and its role in carbon capture utilization and storage? If they’re really serious about net-zero, (then) why is it so difficult to get that amazing number over there the 82 percent fewer emissions, when we’re talking about win wins for the economy and the environment, out in the media and elsewhere.
Eyre said leading environmentalists agree that countries cannot get to net-zero emission Paris Accord targets without enhanced oil recovery with carbon capture utilization and storage.
Hard, inflexible ideology-based targets
Fundamentally, the problem about just transition, and the hard, inflexible ideology-based targets that the federal government is putting out there is its non-universality, and the hypocrisy surrounding so much of the transition discussion, the minister said.
“We all know that that there’s a bit of a gas price issue going on in the UK and Europe and right here at home, listening to the headlines this morning.
“And now, an energy shortage is leading to blackouts in China, and this line from a story I read yesterday jumped out at me, quote, ‘Without power, taking a hot bath is impossible, eating a hot meal becomes a luxury. Are we really going to live like ancient human beings, reading our books by oil lamp?’
“That was from someone quoted in an area affected by power outages in China. And you know, I think that’s a good question.
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“As we know in the US this summer, President Biden asked OPEC to increase production so domestic consumers could get a break on gas prices. Again, no ironies there,” Eyre said.
“We have to be cautious, as governments. I am convinced there will come a time of some serious reckoning about government policies, federally. The carbon tax, and Clean Fuel Standard, come to mind,” she said, adding they are so damaging to consumers and businesses.
“There’s no question that just transition, on the scale that some are envisaging, and the speed, will have a disproportionate impact on consumers and taxpayers, and where that will lead is going to be the story and the headlines of the next few years.”
Countries like Saudi Arabia, Iran and Russia substantially subsidize energy fuel costs for their own people to ensure social peace, she noted.
Germany, which relies on wind for 30 per cent of its power generation, has been “unusually windless this year,” and as a result, only 10 per cent of its power has bene coming from wind. As a result, it’s had to resort to coal-fired power.
“China produces the largest share of global emissions of greenhouse gases. It’s, by far, the biggest producer of coal domestically, and the largest financer of coal fired plants abroad, with an enormous 40 gigawatts of coal plant. And yet, we, in Western Canada still remain something of the energy bogeyman,” she said. Eyrr noted that overall, emissions from the oil and gas sector have been relatively flat in recent years, as production increases have been offset by 36 per cebt reduction in per barrel emissions intensity since 2000.
“Shouldn’t that be relevant to any just transition?” she pondered.
Saskatchewan will be cautious, she said, with incentives for research and development and infrastructure following, not leading, private investment. Saskatchewan will build on its strengths. Helium, lithium and hydrogen development are part of “all the above,” but the province will not turn its back on its traditional sectors.
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