The Obama administration has recently announced a new path forward on cutting greenhouse gas emissions. For starters, the new plan is intended to reduce coal-based emissions by 30% by the year 2030. This could throw a wrench in Canadian Prime Minister Stephen Harpers’ grand vision of energy as an international (especially American) powerhouse energy supplier.
The United States government is strongly encouraging Canada to jump aboard the climate change train, but climate change and environmental issues appear to only be a priority for our government if they somehow inhibit Canadian energy production, be it oil and gas or electricity. That being said, the Harper government has long been an advocate of aligning with the United States on carbon cuts, putting Canada in a bit of a sticky situation.
The United States has been Canada’s main trading partner in not only electricity but other forms of energy as well. This relationship is key to Canada’s economy, and with the United States potentially reaching a state of ‘energy independence,’ Canada must continue to make energy products that present a formidable outside energy source. Canadian energy needs to be as competitive as possible with U.S. domestic energy supplies.
So the answer is simple right? Show our loyalty to our neighbours by aligning with them on the coal initiative—and the coal initiative only. Examining this new bit of climate-change policy alone, one can easily arrive at the conclusion that it is specifically targeting coal emissions and nothing else. What Harper will want to ignore is that this is only one of many potential new emissions-reduction policies that could come into place in the U.S.
Other greenhouse gas emissions reduction policies could significantly affect exports of heavy crude to the U.S. and further delay pending pipeline projects such as TransCanada Corp.’s Keystone XL. Greenhouse gas emissions from Alberta’s oil sands are among the highest in crude oil production, and Alberta alone accounts for about one third of Canada’s total greenhouse gas emissions. Going back to the coal issue, Alberta is also Canada’s largest consumer of coal-based electricity.
However the Canadian coal story is not all bad. Canada not only uses significantly less coal-based electricity than the U.S., but some provinces have taken further steps to decrease the use of coal-based electricity generation and move towards renewable sources. Ontario is one such example, recently phasing out coal as a source for electricity generation.
In terms of overall emissions, adopting the coal policy in Canada would not have as great an impact as in the U.S. because coal is not as widely used here as it is south of the border: As a comparison, coal accounts for roughly 40% of U.S. electricity whereas it accounts for only 10% of Canadian electricity. Canada is also rich in alternative electricity sources, so it may be realistic for us to get out of this coal jam.
Nevertheless, if the U.S. climate-change train continues to chug on (and that’s a big if), Canada will need to reduce greenhouse gas emissions, particularly from the oil sands, which will sooner or later become (and arguably are already) a policy target. Looking at this situation, making our energy products cleaner and economically attractive to the United States could in a sense, be killing two birds with one stone.
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