Can Canada’s Tar Sands Industry Be Profitable Without Government Subsidies?

Todd Paglia of Stand Earth says Canadians taxpayers increasingly foot the bill for Canada’s fossil fuels industry

Can Canada's Tar Sands Industry Be Profitable Without Government Subsidies?

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Story Transcript

DIMITRI LASCARIS: This is Dmitri Lascaris reporting for The Real News Network from Montreal, Canada.

Several days ago, following the commencement of the United Nations 24th Climate Change Conference, environmental organization Stand.earth and Environmental Defense issued a report criticizing the Canadian government’s climate change policies and the role that the fossil fuels industry has played in ensuring that Canada’s government takes weak action to address the climate crisis. Among other things, the report concluded that Canada’s greenhouse gas emissions reduction target is grossly inadequate to avoid a climate catastrophe.

Now with us to discuss the report is Todd Paglia, the executive director of Stand.earth. Todd is an attorney, and before joining Stand.earth he worked for Ralph Nader focusing on consumer protection issues. And he joins us today from Bellingham, Washington. Thank you for coming back onto The Real News, Todd.

TODD PAGLIA: Nice to be here.

DIMITRI LASCARIS: I would like to start with the emissions reduction target of the Trudeau government. It is a reduction of 30 percent by 2030 of Canada’s greenhouse gas emissions level in 2005. This is the same target that was adopted by the predecessor government of the Conservative Party and Stephen Harper; a target that Justin Trudeau himself criticized when he was in opposition. According to the report–and I’m quoting–Canada’s existing 2030 GHG reduction target under the Paris Agreement is highly insufficient. Could you quantify for us what that means? If the Trudeau government were acting in accordance with the advice of the scientific community, How much bigger would its emissions reduction target be?

TODD PAGLIA: Sure, Dimitri. And by woefully inadequate, their current goals are off by half. So they would actually need to double the emissions cuts, if you just look at the reality of the growth that not only is just happening organically, but that the Canadian government is promoting in the oil and gas sector. So actually, they would need to cut 60 percent by 2030. And if you then look at that math, and that’s to get to 1.5–and Canada played a very important role in advocating for a high ambition coalition to aim below 2 degrees Celsius. But if you look at those kind of cuts, and you look at the oil and gas sector continuing to grow, they may be very good on ambition, but bad at math. It doesn’t work.

DIMITRI LASCARIS: Now, I want to talk about a provincial government that’s very important in this equation in Canada, and that’s the NDP government of Rachel Notley in Alberta. Her government likes to portray itself as a climate leader, but this report paints a very different picture. In what ways is Alberta’s government failing to live up to its claims that it is responsible from the climate change perspective?

TODD PAGLIA: Well I don’t want to oversimplify this, Dimitri. It is it is not easy to be Rachel Notley, to be an NDP leader in Alberta. She overcame a very, very conservative government that had been in place for 42 years. So this is–the election was seen as a breath of fresh air. She’s adopted, or indicated that she wants to adopt, a lot of different policies that address climate change and other major problems. But the reality is just a lot harder.

So at this point you’re seeing the same thing we’re seeing with Trudeau, which is continued influence of big money industries like oil and gas watering down legislation, delaying legislation. You end up having a situation where it’s sort of different window dressing, but the same old thing. And I think that’s what we’re facing, both with Trudeau and with Notley. Lots of aspirational rhetoric. But the reality is just not adding up to anything like the real change that’s required given the threats of climate change.

DIMITRI LASCARIS: Now, one of the aspects of Canadian and provincial climate change policy that this report addresses is fossil fuel subsidies. What in fact has happened–and as the report notes and I’m sure you know, Todd, the Trudeau government in the election campaign in 2016 promised to eliminate fossil fuel subsidies. What, in fact, has happened since then both at the federal and provincial level to fossil fuel subsidies in Canada?

TODD PAGLIA: Yeah. So again, rhetoric meets reality. Fossil fuel subsidies have been extended in many cases by the Trudeau government and by the Notley government, to the extent that–you know, the numbers are bad enough, but the actions. So if you think about the subsidy that’s entailed in the Canadian government buying a pipeline when the investors thought it was a bad bet and pulled out, that’s where we’re at. So we’re looking at now the Canadian government subsidizing the oil and gas sector by buying formerly known as the Kinder Morgan pipeline, now known as the Trans Mountain pipeline, buying that pipeline and trying to develop it in order to further expand the tar sands. That’s something we’re talking like–pensions, other sources of funds going into a pipeline project at this point. That is subsidy of a sort that you don’t ordinarily see, and certainly you wouldn’t expect of a Trudeau government.

DIMITRI LASCARIS: Now, finally, let’s focus on the influence of the fossil fuel sector in Canada on government policy. The report states–again, I’m quoting–the oil and gas industry has put significant resources into publicly and privately advocating for weaker government policies on climate change and other environmental protection. Documents obtained through Access to Information Requests show that this strategy successfully delayed it and weaken policies on climate change from the previous federal government. Could you tell us about some of the industry’s most more successful and important efforts to ensure weaker protections on the climate change file?

TODD PAGLIA: Oh, absolutely. And this is the product of a lot of work by the oil and gas industry, to the extent that since April, meetings just on the environmental assessment law, they met with federal officials more than once per day since April. So an extraordinary lobbying effort. And they’ve been rewarded by that law being watered down and delayed. They’ve been rewarded by lobbying the Notley government in Alberta to not hold them liable for the enormous tailings ponds full of toxic waste; that they’ve been able to delay that implementation of new tighter restrictions on the tailing ponds. The emissions cap has now been delayed.

So it’s been a highly successful strategy for the oil and gas sector. And Canada so far continues to hitch its wagon to that single industry. And if you look at the kind of reductions that be required across the country to allow oil and gas sector to continue to expand, and to expand with subsidies and lax regulation, this is a this is a train wreck in slow motion, and there’s no clear indication that they’re going to be able to pull themselves out of this. So the advocacy for high ambition is great, but they’re aiming very low when it comes to policy.

DIMITRI LASCARIS: And I just want to alert our viewers to the fact that part of what you just talked about, Todd, we covered that recently and it talked about in this report that your organization, Environmental Defense, has issued. There was a revolution recently–a revelation, I should say–that the estimated cost for cleanup of the tar sands tailing ponds and obsolete oil wells is $260 billion, and the Alberta government has only collected $1.6 billion in security from the fossil fuels industry. So that is obviously one area, I imagine you would agree, where the fossil fuels industry has been extremely effective in terms of weakening government protection of the environment.

TODD PAGLIA: And that’s–and that’s a subsidy, right? So that’s an externality. That’s a cost of doing business that the sector now doesn’t have to deal with. And what Alberta is saying is you never have to deal with it. So you know, more and more, when you take a close look at this industry it looks a lot less like a business and more and more like some sort of nonprofit. I mean, there is no way this business works without massive subsidies, and without completely failing to meet the Paris agreement.

DIMITRI LASCARIS: Well, we’ve been speaking to Todd Paglia, the executive director of Stand.earth, an environmental organization based in the Northwest United States. Thank you very much for joining us again today, Todd.

TODD PAGLIA: Thanks, Dimitri.

DIMITRI LASCARIS: And this is Dimitri Lascaris reporting for The Real News.