Europe needs more clean energy, not Canadian oil, critics say

OTTAWA—The federal government is exploring whether Canadian fossil fuel companies can boost production and exports to help Europe cut off Russian oil and gas after the invasion of Ukraine.

Discussions so far have included the country’s top oil-and-gas lobby group and a major pipeline company, and occur as the war in Europe opens a new front in Canada’s already-fraught politics of climate change, with fossil fuel boosters lamenting a lack of domestic pipelines and environmentalists arguing the situation shows the need to supercharge the drive to clean energy.

That’s because, even as the West tries to inflict economic damage through sanctions on Russian President Vladimir Putin’s regime, Canada’s allies in Europe are stuck buying billions of dollars in Russian oil and gas. Leaders of the G7 and European Union have stressed the need to get off Russian energy, but have also acknowledged it will take time — five years, according to the EU’s current plan — to replace it with other sources.

In a statement to the Star, Enbridge, a major Calgary-based pipeline company, confirmed they have been in talks with the federal government about “how the industry can help relieve the current energy crisis.”

Tim McMillan, president of the Canadian Association of Petroleum Producers, also told the Star that federal officials are keen to know if oil and gas companies can crank up production to help European countries get off Russian energy.

“The officials were, I felt, earnestly trying to understand how much capacity we could bring on, and how we could supply Europe in the short and medium term,” McMillan said.

Natural Resources Minister Jonathan Wilkinson and Environment Minister Stephen Guilbeault were not available to speak with the Star in recent days, according to their respective offices. However, in an emailed response to questions from the Star, a spokesperson for Wilkinson confirmed the government is having “active discussions” with the fossil fuel industry.

Last week, for instance, Wilkinson delivered a speech to oil industry players in Texas and referred to how Canada can help replace Russian energy in Europe.

“We are expecting more information on the potential for short-term capacity increases soon,” said Keean Nembhard, Wilkinson’s press secretary, in a statement to the Star.

“Any emissions associated with oil and gas exports would have to respect Canada’s emissions reduction targets and associated regulations,” Nembhard added.

The potential increase is being considered just as the Liberal government prepares to release its first legally-mandated road map to slash greenhouse gas emissions that cause climate change by at least 40 per cent over the next eight years. That plan includes an as-yet undefined cap on emissions from Canada’s oil and gas sector, the single-biggest contributor to the country’s greenhouse gas pollution, according to the most recent data.

Guilbeault, meanwhile, has cast doubt on whether Canada can meaningfully help Europe with fossil fuel exports. While declining an interview with the Star, his office pointed to the minister’s comments last week to The Canadian Press. Guilbeault said at the time Canada could only realistically provide less than a tenth of the oil Europe is currently buying every day from Russia, and that major projects to boost export capacity — including the Trans Mountain expansion and the liquified natural gas export terminal in Kitimat, BC — are at least two years away from completion.

He argued Canada is better placed to help Europe reduce their reliance on oil in general, rather than replace Russian with Canadian fossil fuels.

In 2019, the European Union reported that more than 40 per cent of its natural gas imports, and 27 per cent of its crude oil imports, came from Russia. That represents more than 2 million barrels per day.

At the moment, Canadian oil producers could likely muster about 200,000 extra barrels per day “fairly quickly,” according to McMillan, the head of the petroleum producers’ association. But for him, the real impediment to shipping more fossil fuels abroad is a lack of transportation infrastructure in Canada. He pointed to how an LNG project was recently canceled in Quebec, and how plans for a 4,500-km Energy East oil pipeline from Alberta to New Brunswick were shelved in 2017.

“Had we built these facilities, we’d be in a great position to displace Russian gas and to give Europe an option,” McMillan said.

It’s also not clear how much extra oil and gas existing pipelines could carry. Major pipeline company TC Energy did not say whether its systems have additional capacity when asked by the Star, while Enbridge said by email that its systems are “at or near capacity,” though it is exploring ways to increase exports to the US and Europe, including through facilities on the American Gulf Coast.

Keith Stewart, senior energy strategist with Greenpeace Canada, said he doesn’t like the sound of stuffing more fossil fuels into existing pipelines.

“The minute you increase pressure on these things, the more likely they are to burst,” Stewart said.

He argued the “fastest and cheapest solutions” to get Europe off Russian oil is to speed up the transition away from oil and gas. One way to do that would be for Canada to boost manufacturing of heat pumps that run on electricity to replace natural gas furnaces across Europe, he said.

“The real solution here is what the German president calls the ‘dash to renewables,’ because no one’s going to block your access to the wind and sun,” he said.

For Michael Bernstein, executive director of the policy organization, Clean Prosperity, the war in Ukraine and the debate around Russian energy will influence Canada’s climate politics in the weeks to come. He predicted the government will likely try to help boost oil and gas exports in the short term, while arguing that policies like a promised tax credit for technology to capture emissions from fossil fuel extraction will help reduce overall greenhouse gas pollution as the country works to hit its climate targets.

“I suspect the situation makes it easier for the government to argue why it’s worth them taking a balanced approach, in terms of carrots and sticks,” Bernstein said.

“I’m not expecting a major shift in posture.”

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