Federal Minister of Natural Resources Jonathan Wilkinson, in Regina, on June 28. Photo by Brian Zinchuk

Minister of Natural Resources comes to Regina to speak about “just transition”

REGINA – We’re still going to use oil and gas, but we’re not going to burn it. That is, except for power generation, coupled with carbon capture. We need to adapt to a net-zero economy by 2050, otherwise global investment will pass us by, in addition to the climate peril. We have to double the electrical grid, or more. People against everything need to get out of the way and let us build things. And we can’t just hope for the best.

Those were the key themes that federal Minister of Natural Resources Jonathan Wilkinson spoke about to the Saskatchewan Chamber of Commerce on June 28. The theme of his speech was the “just transition” that the federal government is seeking to impose on the energy industry, and indeed, Canada as a whole.

Wilkinson spoke as one of the few members of the federal Liberal cabinet who spent much of his life in Saskatchewan, growing up in Saskatoon, and later working in the Roy Romanow NDP government. (He was also the leader of the NDP youth wing for a time.) But he also spoke as someone who as ran or worked with several businesses in gas purification, water treatment, and biomass.

 

With no equivocation in his words or voice, Wilkinson spoke of Canada attaining net zero by 2050, meaning net zero greenhouse gas emissions within 26.5 years. He said we must “seize the extraordinary economic opportunities that can be enabled through a shift towards a lower carbon future. And certainly, to avoid the destructive impacts that we see all around us that relate to climate change.”

“Increasingly, global financial markets are pushing in that direction, with investment decisions being focused on those assets that are actually relevant in a low carbon future and away from those that are not.

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“Businesses must learn to adapt to changes that are occurring in their business environment. If they don’t, they don’t typically survive very long. It is what their shareholders expect. It is certainly what their employees depend upon.

“Governments are no different. In order to effectively serve their citizens, we must be capable of responding to changing circumstances and to taking decisive action. The economic future of Canadians depends on their governments; provincial, territorial, federal, municipal making the right decisions to make sure Canada will thrive in a lower carbon world. The good news is Canada is extremely well positioned to take advantage of these opportunities. I would tell you that if you were somebody who got to choose where you were going to live, based on the economic prospects in the context of this lower carbon future, you would undoubtedly choose Canada. And you would probably secondly choose Australia, for almost exactly the same reasons.”

That includes many in-demand critical minerals, a well-educated and highly trained workforce.

Federal Minister of Natural Resources Jonathan Wilkinson, in Regina, on June 28. Photo by Brian Zinchuk

 

Two paths, and the first accepts climate change

Wilkinson said, “There are essentially two paths that we could take. The first accepts the scientific reality of climate change, and understands that it’s something we can and that we must address. It also accepts the fact that the world is moving increasingly in this direction. The second path shrugs off the damage that climate change is already causing; the dramatic floods that we see in towns and cities, the dramatic fires in our forests that we are seeing across the country, in almost every province and territory right now. Dried up rivers, melting glaciers; it pretends the climate concern is a fad that effectively will fade and that we don’t really need to do anything to ensure that our economy is healthy for the long term.

“I think of the first path as having a real plan for the future. And the second as essentially hoping for the best. The focus of any relevant plan for the future has to be on an economy that works for all Canadians, in every province and territory in this country. And very much including those who work in conventional energy, and those who, quite naturally, have some questions about a global shift in energy demand could mean.”

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Four key elements

Wilkinson identified four key elements to the federal government’s plans. “The first is to identify and seize those economic opportunities that are going to be enabled through a shift towards a lower carbon future. From critical minerals to hydrogen, from carbon capture to electric vehicles, from renewables to biofuels, and small modular reactors. The Government of Canada has been working for the past seven years on strategies, investments, improving regulations to help make Canada the clean energy and technology supplier of choice in a low carbon world.”

He spoke of regional approaches, and “regional energy and resource tables, which is really a mechanism through which we work to align resourcing, targeting, planning, regulatory and permitting processes with provincial governments and with Indigenous partners.” Saskatchewan, however, has rejected these tables, one of the few provinces to do so, he pointed out.

Panther Drilling Rig 4, near Benson. Photo by Brian Zinchuk

 

Oil and gas still needed…

For a speech focused on “just transition,” Wilkinson only spoke briefly about oil and gas. He said, “A second key element of a plan for the future is to have a thoughtful approach when it comes to Canada’s oil and gas resources. In virtually all forecasts worldwide demand for oil will begin to decline within 10 years, and it will continue to decline as zero emission vehicles and other low carbon technologies are deployed in greater numbers. As you will know very well, oil is primarily a transportation fuel. And as we see more deployment of zero emission vehicles, it is simply the logic that we will start to see a decline. So this transition will take place away from the combustion of fossil fuels. It will take place, but it will take place over decades, not tomorrow, not the week after.

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“I would also say that there are many who think that somehow when you reach net-zero future in 2050, that that somehow we will not need oil or gas beyond that time. And that’s simply again, logically incorrect. In the International Energy Agency’s 1.5 degrees scenario, the world will still use about a quarter of the oil that it uses today in 2050. And in their, what they call their announced measure scenario, (the) figure is about 57% of what it is today.”

Wilkinson continued, “Similarly, just last week, the Canadian Energy Regulator released a country-level report that showed that as the world accelerates climate action that will mean a decrease in global demand for oil and gas. As with the IEA report, the Canadian Energy Regulator report, which is an independent arm’s length agency, but I asked them for this report, outlines two scenarios; one in which Canada and the vast majority of developed world achieve net zero by 2050, but some large developing countries, read China and India achieved net-zero slightly later. This scenario is consistent with what has been announced as the pledges under the Paris Agreement, and with one of the scenarios that the IEA developed and foresees a 1.7 degree rise in global average temperature.

“The second scenario paints a future where Canada and the world collectively achieve Net Zero by 2050, capping global temperature rises at 1.5 degrees. In both scenarios, global demand for oil falls significantly, but obviously less significantly in the scenario where India and China achieved net-zero later. It is important to note that the degree to which global demand for oil falls is not within Canada’s control. In both of these scenario Canada, itself achieves net-zero in 2050.”

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… but not for combustion

Indeed, according to Wilkinson, in just a few decades, Canada will no longer be burning oil. He said, “Another important thing to notice is the change beyond 2050 and how oil will be used, we will no longer use significant amounts of oil in combustion applications. At the end of the day, it is the combustion of fossil fuels that releases carbon dioxide that causes climate change. Where we will use it beyond 2050 As in non-combustion applications like petrochemicals, asphalt, lubricants, solvents, carbon graphite, waxes and a range of other things. Similarly, for natural gas, and the findings are quite similar, there will be applications beyond 2050 in the production of ultra low carbon hydrogen, and there will be utilization of gas in the context of applications where you can effectively capture the carbon, like producing electricity from natural gas with carbon capture.

“It is important to emphasize during the next 30 years, as the volume of hydrocarbon use is reduced and as uses change, countries that focus on producing hydrocarbons with ultra low production emissions are going to be winners in terms of the saleability of their products in the global market. And those that don’t are going to inevitably lose market share. There is thus a critical choice for Canada, for Newfoundland and Labrador, for British Columbia, for Alberta, and yes, for Saskatchewan.

“In terms of taking aggressive action to reduce emissions from the production of oil and gas, it is crucial for any producing country and certainly any province that wishes to capitalize on these resources during the energy transition and into a post-2050 net-zero world.”

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Double the grid, or more

Wilkinson said, “The third element of our plan relates to building out more clean power. A lot more. That’s not just to ensure that you actually have an electricity system that doesn’t produce greenhouse gases. It is because that, in order to achieve the reductions in greenhouse gases in many other parts of the economy via transportation with the electrification of transportation or home heating, you need a lot more clean power.”

He said businesses will need SaskPower to decarbonize, as their products will be judged for the carbon content embedded within their creation, including the power used.

“We need to find ways to ensure that we are working with provinces and territories, yes, to decarbonize the existing energy grid, but to build far more in the way of capacity. And in fact, we will need to double, or more, the generating capacity that exists in every province by 2050,” Wilkinson said. “Building out a clean Canadian power grid at the pace and the scale that is necessary is an enormous undertaking. It is a nation building project as big as anything we have ever done in this country.”

RCMP officers assess how to remove two protesters chained to a tree stump at an anti-logging blockade in Caycuse, B.C. on Tuesday, May 18, 2021. The RCMP watchdog has launched a systemic investigation of the national police force’s British Columbia unit that deals with protests against logging and pipeline projects. THE CANADIAN PRESS/Jen Osborne

 

No more NIMBY

To that end, Wilkinson called out people who stand in the way of almost all new projects. “At this historic moment, the environmental movement, which has at times, found itself to be in opposition to some development, will need to become comfortable with an enhanced focus on building things. In the right way for sure, but building things.”

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Indigenous participation

The fourth element he listed was Indigenous engagement and active participation. Wilkinson said, “The Government of Canada has an obligation and is committed to advancing reconciliation across this country. This very much includes the natural resources space where Indigenous consultation and partnership must be very much at the heart of what we do. Indeed, a robust approach to enabling Indigenous economic participation and major resource projects is a key part of advancing economic reconciliation.”

To that end, he announced $7 million in four renewable energy projects in partnership with Pisim Energy, the Lac La Ronge Indian Band, Star Blanket Cree Nation and the northern settlement of Descharme Lake.

The next day he announced a $50 million contribution to Cowessess First Nation’s 17 per cent equity stake in a wind turbine project costing several hundred million dollars. A further $10 million is going to BioLesna Carbon Technologies for a new biomass refinery in Carrot River.

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Alternative path

Wilkinson said the alternative path was “hoping for the best.”

“In my mind, that path ignores the very clear evidence as to how climate change is undermining the health and safety of people and the planet. Such a head in the sand approach will lead to environmental devastation and economic stagnation as the world, including global investors, pass us by. Some in this country will tell you that one can fight climate change and create a healthy and prosperous economy for a low carbon future by simply relying on technology. I would say my colleague in the House of Commons, Mr. Poilievre, is fond of using the tagline “Technology, not taxes,” by which he means simply plan on or hope on technology to save us.

“But I will tell you that is not a plan. That is a blind hope.”

 

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Jonathan Wilkinson’s full Just Transition speech, verbatim

Natural gas power generation with carbon capture likely allowed post-2035, says federal natural resources minister

The “just transition” report is nothing short of the utter transformation of Canada