New report shows jobs and royalties declining with emissions rise
JUNE 1, 2021
VANCOUVER – A stark change in direction is needed if Canada is to meet its emissions-reduction targets, says a new report by veteran earth scientist David Hughes.
Going into the G7 Summit later this month, Canada and the US are the only G7 countries that have not reduced emissions since signing the 2016 Paris Accord. In fact, Canada has shown the greatest emissions increase during this time.
The oil and gas sector alone will cause Canada to exceed its Paris Agreement target of a 40 per cent reduction by 2030, set by Prime Minister Trudeau at President Biden’s recent climate summit, and the “net zero” by 2050 target in Bill C-12. This new report uses the Canada Energy Regulator (CER) oil and gas production forecasts and the Canadian government’s submission to the UN on 2019 emissions, to project emissions from the sector to 2050. Even in the CER’s “Evolving Scenario”, which assumes that governments will continue to introduce new policies over time to address emissions reduction targets.
“We can only achieve our emissions targets if oil and gas production is significantly reduced from the CER’s projected levels,” Hughes says. “Pursuing policies that encourage production growth, such as the $12.6 billion TMX pipeline expansion project and LNG exports, will ensure that Canada will not meet its emissions reduction commitments.”
Last month the International Energy Agency also said investments in new oil and gas developments must stop immediately if the world is to meet its goal of net-zero emissions and limit the worst impacts of climate change. It called for a total transformation of the energy systems that underpin economies around the world.
The report, Canada’s Energy Sector: Status, evolution, revenue, employment, production forecasts, emissions and implications for emissions reduction, highlights that although oil and gas production is at record highs, the return in the form of jobs and government revenue have dramatically fallen. It was co-published by the Canadian Centre for Policy Alternatives, with the Corporate Mapping Project, The Parkland Institute, Stand.earth, West Coast Environmental Law and 350.org.
“Oil and gas sector employment is down 53,000 workers from its peak in 2014 even though production is at record highs,” says Hughes. “Because of technological advances, the sector needs fewer workers than before, so those jobs are unlikely to return to previous levels.”
He also notes that the sector is contributing much less to government revenues than it once did.
“Oil and gas royalty revenue is down overall by 45 per cent since 2000 in Canada and by 61 per cent in Alberta, even with production at record levels,” Hughes adds.
CER’s evolving scenario production forecast makes it clear that additional pipeline infrastructure is not needed because existing export capacity is sufficient, Hughes says, explaining that the need to reduce production to meet emission reduction targets will result in even more excess capacity on existing pipelines.
“When announced expansions of existing export pipelines are included, Canada already has enough pipeline capacity to transport the amount of oil the CER is projecting for export through 2050 without TMX or the Line 3 expansion,” he says.
Hughes also raises serious questions about the efficacy of carbon capture and storage (CCS) at the scale required, and purchasing carbon offsets, two approaches the federal government increasingly points to as solutions to address the climate crisis.
Hughes notes that oil and gas provided 77 per cent of end use energy demand in Canada in 2019, and are likely to be needed at some level for the foreseeable future. Reducing exports, which accounted for 55 per cent of oil production and 18 per cent of gas production in 2019 will be needed, along with aggressive policies to reduce domestic consumption.
“It’s increasingly clear that our government needs to step up and put forward a credible plan that addresses both the needs of workers and communities, who are already being left behind, while also addressing the need to reduce emissions,” concludes Marc Lee, a CCPA senior economist and member of the Corporate Mapping Project. “Rather than focusing on extracting and exporting as much fossil fuels as possible, we need to be talking about what the future of jobs and revenue looks like in Canada while winding down the sector.”
“It is increasingly clear that growth of the oil and gas sector in Canada makes our economy more vulnerable, doesn’t produce more jobs, increases toxic liability and stands in the way of our country meeting our climate targets. We simply can’t keep increasing the production of products that the world is moving away from that increase pollution and make it more difficult for us to build a cleaner and safer economy. We need a plan now to wind down oil and gas production and emissions that leaves no one behind.” said Tzeporah Berman, International Program Director Stand.earth.