Transition

More

Oil exports will help Canada's renewables industry, Carr says

The Canadian government sees no contradiction in supporting the development of its carbon-intensive oil sands while simultaneously touting its push towards a low-carbon power system, says James Carr, Canada’s minister of natural resources.

“You have to develop your conventional resources at the same time that you invest in the low-carbon economy, and it makes a lot of sense to take that wealth in the ground and use the revenues from it to help finance the transition,” Carr said Monday, taking questions at the Bloomberg New Energy Summit. “We think you have to do both at the same time.”

When Prime Minister Justin Trudeau and his Liberal Party took power in late 2015, many expected a sea change on Canada’s energy and climate policies compared to his Conservative predecessor Stephen Harper, a climate sceptic and oil industry ally. More recently, however, Trudeau has disappointed many environmentalists by approving several high-profile pipeline projects that seek to transport carbon-heavy oil from Alberta to markets in the US and Asia.

Trudeau made headlines around the world late last year by announcing a pan-Canadian carbon price, set to go into effect in 2018. Yet last month at an oil industry conference in Texas, Trudeau said: “No country would find 173 billion barrels of oil in the ground and just leave them there.”

Speaking Monday in New York City in front of many leaders of the US renewables industry, Carr, a member of Trudeau's cabinet and Liberal Party, attempted to address the inherent tensions in government’s energy positions – hitting optimistic notes on the shift to renewables while defending Canada’s massive oil export industry.

“As we make our way around the world talking to nation states … the agenda is the same,” he said. “Everybody knows the trajectory is clear – there’s a movement away from fossil fuels – but it’s going to take a long time.”

“My own sense is the pace of change is going to accelerate, but it’s not going to happen overnight,” he added.

The policy of the Trudeau government, then, is “to extract these [fossil fuel] resources more sustainably, move them more safely, while investing in the lower-carbon economy”.

“We have consensus across Canada that that’s the way to go. We don’t have unanimity. These projects are controversial. There are people who want to keep that stuff in the ground. There are people who don’t [want any] regulations.

“But then there are an awful lot of people in between, who say it should come out of the ground sustainably and be moved safely while we look very clearly at the future energy economy.”

Canada installed 702MW of new wind capacity in 2016, less than half of its 2015 additions, according to the Global Wind Energy Council. Still, its performance was good enough to make it the world’s ninth largest wind market.

Canadian hydro and wind see Massachusetts opportunity

Read more

While important new opportunities for renewables developers are opening up in the western provinces of Alberta and Saskatchewan, the near-term picture looks fairly grim in the historically core markets of Ontario and Quebec. One potential bright spot is the prospect of selling power into the US, where New England states like New York and Massachusetts have aggressive targets for renewables and emissions reduction.

“Canada is interested in further exports to the United States, including in New England,” Carr said. “We think we ought to be working together as governments to take the integrated energy environments we have now and build upon it.”

While the prospect of trans-border electricity trading seemed to dim with the election of “America First”-minded US President Donald Trump, Carr said that having met new US Energy Secretary Rick Perry twice – including two weeks ago – he sees ongoing reason for optimism.

“He said to me both times that he believes the North American energy market is highly integrated – and that that’s in the interest of all three nations,” Carr said. “So that’s a very good place to start.”

Latest