Energy and Natural Resources - Op Eds

When Canada’s federal government makes its call on Teck’s Frontier oil sands project, it will show whether it actually subscribes to the economics of carbon pricing – or whether it intends to reduce greenhouse gases by central planning and government fiat.

The federal cabinet has until the end of February to decide on whether to approve or prohibit the Frontier oil sands mining project. An assessment by a joint review panel has found that the project would likely cause significant adverse environmental effects but recommended that it would be in the public interest. Still, the project faces opponents who argue that approving Frontier goes against the federal government’s commitments to reducing greenhouse-gas emissions.

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Old or spent oil and gas wells have accrued across Alberta in the thousands. The environmental risk in the province is high and rising, and the financial liabilities are, too: Analysis by the C.D. Howe Institute in 2017 showed that the public cost could be in the billions of dollars if companies designated as “financially fragile” by the Alberta Energy Regulator (AER) simply abandoned their wells for taxpayers to clean up – an extreme scenario that is not beyond contemplation.

So amid reports about budget cuts, layoffs and alleged mismanagement on the part of the AER’s former CEO, the regulator has faced increasing pressure to change its one-size-fits-all rules, which use the valuations of operators…

Starting Dec. 16, the Alberta Court of Appeal will hear arguments regarding the constitutionality of the federal Greenhouse Gas Pollution Pricing Act – the so-called carbon-pricing “backstop," under which Ottawa would impose a price on greenhouse gas emissions in any province where it deemed provincial measures are not sufficiently stringent. The Alberta government’s challenge to the federal backstop is just the latest in a months-long string of appeals-court processes by governments in Ontario and Saskatchewan, where the legislation was upheld; those appeals are now headed to the Supreme Court, which will begin its hearings in March.

So the legal arguments being deployed feel, at this point, quite well-trod. However, the federal…

Even if it’s a good punchline for late-night comedians, there is nothing inconsistent about building pipelines while reducing greenhouse gas emissions. Stranding Canadian oil by blocking pipelines is damaging to both the energy industry and the Canadian economy as a whole. Moreover, it is an ineffective way to reduce our carbon emissions—a price on carbon is the most economically efficient policy tool we have.

By internalizing greenhouse gas externalities in economy-wide decisions, carbon pricing ensures that everyone considers their incremental impact on the global climate. It allocates emission reductions to the activities with the so-called lowest cost of abatement. If oil can be economically produced while facing a carbon…

The big winner in the recent federal election was clearly climate change. The streets were clogged with marchers, and the parking lots were full of the SUVs, vans and pickup trucks that delivered many of the protesters. Therein lies the challenge of taking action on climate change. Canadians are demanding action, but ask most people what they are doing for climate change, and a frequent response is “recycling?” Ask what they are willing to pay, and the answer from most is “less than $100.” Ask what they think of our energy sector, and the majority say they support a low-carbon economy, the TMX pipeline and responsible energy development.

Canadians want action and, although they aren’t clear what precisely that means, they are…