There’s a sustainable way forward for Canada’s energy sector, and it has nothing to do with Kinder Morgan’s Trans Mountain pipeline expansion, argues Jeffrey Sachs, director of the United Nations Sustainable Development Solutions Network (SDSN), in a Globe and Mail op ed late last week.
“The truth is that Alberta oil sands have absolutely no place in a climate-safe world,” Sachs states. “Investing in them is almost sure to be investing in a future bankruptcy.” And through the lens of the Paris agreement, “the story is really quite simple if you are not facing an election soon.”
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Prime Minister Justin Trudeau and Alberta Premier Rachel Notley have both strongly backed the Paris deal, with its call to keep average global warming well below 2.0°C. “To achieve that requires the world to decarbonize the [global] energy system by mid-century,” Sachs writes. Multiple  analyses  in recent years have shown that the Paris goals mean keeping the majority of known fossil fuel resources in the ground.
And now, a new SDSN study  “shows the sustainable way forward for Canada’s energy industry,” Sachs writes. “Rather than building more oil and gas pipelines to carry Alberta’s high-cost and highly polluting oil sands to world markets, Canada should be building long-distance transmission lines to carry zero-carbon electricity to U.S. markets. In that way, Canada would honour its commitment to the Paris climate agreement and avoid losing billions of dollars on foolish, dead-end projects.”
The impacts of climate change and the terms of the Paris deal mean the world will move swiftly away from fossil fuels, Sachs notes. “And herein lies the rub for Canada. The world already has vastly more proven reserves of oil and gas than it can safely burn, and a glut of reserves at far lower production costs than Alberta’s oil sands.” With the world “awash in US$30-per-barrel oil  as world demand is cut back in the future,” he adds, “there is no way that Alberta’s oil will maintain a profitable niche in a world that is ending its dependence on oil.”
The SDSN study, conducted in partnership with Hydro-Québec and energy modellers at Evolved Energy Research, landed on Canada’s hydroelectric resources and the potential for energy storage behind hydro dams as the best strategy to decarbonize electricity in the U.S. northeast.
“Herein lies the real future for both Canada and the United States in energy competitiveness,” Sachs writes. “Rather than building pipelines that will soon be shut, Canadians and Americans should be building a smart grid to carry renewable energy between the two countries. Canada’s renewable energy is vast right across the country. Alberta, fortunately, has vast wind and hydroelectric power potential to enable the province to continue to be a major exporter of energy, only this time with zero-carbon energy that is sustainable for the long haul.”
[Alberta also has a better solar regime than Germany, which has been rumoured to be doing some interesting work on solar. – Ed.]
The other impulse, he notes, is to just let pipeline megaprojects proceed, then fail: “Okay, build the pipelines,” Canada’s clean energy allies could say. “Then we will bankrupt you.”
But “admirers and friends of Canada should speak honestly to friends,” Sachs concludes. And that message is: “Don’t waste your hard-earned money on the Trans Mountain and Keystone XL pipelines. Spend your money on sustainable projects tapping Canada’s abundant, zero-carbon energy.”