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Pandemic Response Should Mobilize Around Low-Carbon Solutions

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This post by The Energy Mix publisher Mitchell Beer appeared yesterday on Policy Options [1]. Reprinted in full with permission.

With the coronavirus pandemic devastating the global economy and pushing world oil prices over a cliff, the federal government has two potential options in dealing with the oil and gas industry. It can give in to the predictable lobbying from fossil fuel interests, or it can use the virtual shutdown of the economy for industry mobilization.

This week, Prime Minister Justin Trudeau passed a package of “extraordinary” measures, including $55 billion in business supports, aimed at keeping the Canadian economy afloat while the country largely shuts down to slow the spread of the virus. Right on cue, the prospect of a massive oil and gas bailout emerged as a widely touted, seemingly inevitable next step.

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Calls for a fossil bailout began circulating, with the Alberta government and 65 of that province’s CEOs pitching [3] Ottawa on a $15-billion industry relief plan, including share purchases for distressed oil and gas companies and a suspension of the federal carbon tax.

Wisely, federal officials signaled that Ottawa’s priority was to help out unemployed oil and gas workers, while directing funds to rehabilitate a backlog of abandoned oil wells that would otherwise take up to 2,800 years [4] to clean and cost $$260 billion [5] in Alberta alone.

“We know the oil and gas sector has been particularly affected, and specific help is needed,” said Carlene Variyan, communications director to Natural Resources Minister Seamus O’Regan. “We’re looking at all options—including helping maintain jobs in the industry by enabling workers to put their skills to use remediating the environmental liabilities associated with orphan wells.”

The government appears to know what to do. December’s Throne Speech, which has been eclipsed by the pandemic, set [6] a 2050 deadline for Canada to achieve net-zero emissions, supported by new initiatives on energy-efficient buildings, zero-emission vehicles, “clean, affordable power”, cleantech investment and climate adaptation.

Before the 2019 election, a two-member Advisory Council on Climate Action urged [7] federal action on a zero-emission vehicle mandate and deep energy retrofits. One of the council co-chairs, Steven Guilbeault, now sits at the cabinet table as Minister of Canadian Heritage.

None of this is to suggest that Ottawa can or should be distracted from its most immediate priority: “flattening the curve [8]” on the spread of the coronavirus.

But protecting the country and stabilizing the economy is not synonymous with shoring up a declining industry that has lost the confidence [9]of international investors, currently loses money [10] on every barrel of oil it produces, and accounts for a massive proportion [11]of the country’s greenhouse gas emissions.

That’s where Ottawa’s other option comes in. It begins with the industrial mobilization Trudeau has already announced, to deliver the rapid testing capacity, ventilators, masks and gowns the health system needs to confront the immediate crisis. But after that, there are other legitimate needs and important supply chains that can stabilize jobs in every region of the country, while setting the economy up for a quick rebound after the pandemic is under control.

Ottawa can begin tapping into those opportunities by:

In the age of coronavirus, social distancing has shut down most construction sites. But deep energy retrofits [15] require new skills for a small army of contractors and tradespeople and quickly ramping up e-training creates worthy, needed jobs for community colleges and construction teams. A period of social isolation is exactly the right time to double down on that work.

The farm mental health crisis is often about deep economic uncertainty made worse by climate-driven weather extremes. Investing now in agriculture extension services [17] and income supports for proven, sustainable, less carbon-intensive practices will make farms more resilient and food supplies more secure, help stabilize rural economies and protect Canadians whose lives were already at risk before COVID-19 arrived.

All these measures deliver cash infusions to help stabilize jobs and incomes during the pandemic. They all strengthen essential building blocks for a more stable [16], diversified, resilient economy which will be with us long after oil and gas enters its inevitable managed decline [18].

In the end, putting carbon solutions and community resilience at the heart of Canada’s pandemic response is about value for money. It’s a reliable path to investing in Canadians, especially the most vulnerable among us and not corporate bailouts. As much as any other moment in living memory, this pandemic demands solidarity. Ottawa has an opportunity to meet today’s urgent need, while taking a significant step towards the future economy it already wants to build.

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#1 Pingback By Pandemic Response Should Mobilize Around Low-Carbon Solutions – Enjeux énergies et environnement On March 27, 2020 @ 12:44 AM

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