Big Oil in Alberta supports carbon tax, panel submissions show

Dene Moore
National Affairs Contributor
Daily Brew
Big Oil in Alberta supports carbon tax, panel submissions show

The transition to a lower carbon future is already underway, says the Canadian subsidiary of one of the world’s largest oil companies, which is urging Alberta’s new NDP government to put in place a credible climate change policy.

And that plan should include a price on carbon, Shell Canada tells the province’s climate change panel launched last summer to provide advice to the provincial government on everything from how to cut emissions and improve the province’s environmental reputation to how to grow the renewable sector.

“Society will struggle to achieve its climate goals without a meaningful carbon price and, longer term, without Carbon Capture and Storage,” the Canadian arm of Royal Dutch Shell writes in its submission to the panel – one of more than 450 submissions received from industry, environmental groups and the public by the end of last month.

A market-based carbon price should drive reductions in greenhouse gas emissions and encourage new technologies, it says.

Shell is not alone.

The Canadian Fuels Association, Cenovus and Suncor all endorsed carbon pricing as a means of reining in emissions.

While a carbon tax may seem anathema to Big Oil, the reality of climate change — and the possibility of the political will to curb it — are changing the face of the fossil fuel industry.

Earlier this year, Saudi Arabia’s oil minister made headlines by predicting an end to his nation’s oil exports as early as mid-century.

Ali Al-Naimi says Saudi Arabia — currently the world’s largest exporter of crude oil — is looking to develop solar power in its stead.

“In Saudi Arabia we recognize that eventually, one of these days, we’re not going to need fossil fuels,” he told a climate change panel in Paris.

Exxon, Shell and BP have become global players in biofuels; French oil giant Total has made major investments in solar; and Norway’s Statoil has created a new division focused on offshore wind power generation.

Among the recommendations from Apache Canada: a tax on high-fuel mileage vehicles, gas pump warnings on the impact of CO2 emissions from driving versus transit [“like cigarette label warnings”], and an increase in a CO2 levy that would be put into technology development.

Other companies traditionally reliant on the oil and gas industry have also started to diversify.

Calgary-based Enbridge says it’s now a “major and growing” renewable energy company, having invested more than $4 billion in wind, solar, geothermal and waste-heat power generation over the past 13 years.

“We’re one of Canada’s largest investors in solar and wind power production, and in the United States we’re a growing renewable energy player,” the company says in its most recent annual report.

And TransCanada Corp. has invested more than $5 billion in zero-emissions power production such as wind farms, hydro and solar, says spokesman Davis Sheremata.

“We respect the discussion concerning effective climate change policy that ensures responsible development of the energy resources that we need to fuel our everyday lives. We also recognize global demand for energy continues to rise at the same time as the world strives toward a less carbon intensive energy mix,” Sheremata tells Yahoo Canada News.

But the world is not about to see the end of fossil fuels just yet, he suggests.

“The fact is that the world needs lots of energy and we will need all sources, and while renewable options are growing, hydrocarbons will continue to be the most efficient means of powering global economic growth for the foreseeable future,” he says.

For Shell Canada, low-carbon production has become a matter of global competitiveness “in a world that needs more energy but less CO2.”

“Credibility is necessary for securing increased access to international markets for Alberta’s energy exports, which is a key lever in improving the success of Alberta’s oil and gas sector and growing its economy,” the company writes to the Alberta climate change panel.

Alberta Premier Rachel Notley welcomed the “very thoughtful conversation” the panel has prompted.

“There are real discussions going on and there seems to be a very clear understanding by leaders within industry that we have to make some real changes going forward,” she told reporters last week.