GLOBE-Net, July 17, 2012  - Two highly topical energy-related issues have engaged Canadian environmental interests of late and are shaping governmental policies at both the national and provincial level. These are the role of natural gas as a transition fuel to a lower-carbon future, and building the infrastructure needed to move Alberta heavy oil to the West Coast for export to Asian markets. 

Passions run high on both issues, as well they should. These are critically important matters that have major long-term implications for our economy and for our environmental well-being. 

But passion should not impede reasoned examination of all aspects of the many issues involved. To this end, it is worth noting two recent and well-reasoned reports on both topics published in GLOBE-Net. 

The first is a new study by Cornell Professor Lawrence M. Cathles, published in the most recent edition of the peer-reviewed journal Geochemistry, Geophysics, and Geosystem and discussed in the GLOBE-Net article "Natural Gas Is a Much-Needed Tool in the Battle to Slow Global Warming" 

Professor Cathles argues that no matter the timeframe considered, substituting natural gas for all coal and some oil consumption provides about 40 percent of the global warming benefit that a complete switch to low-carbon sources would deliver. He notes that natural gas is a natural transition fuel that could represent the biggest climate stabilization wedge available. 

Cathles' paper does not examine all the environmental issues associated with the recent rise in natural gas supply, nor does he dismiss these as irrelevant.  His very clearly stated focus is on reducing greenhouse gas emissions in a timely fashion using lower carbon natural gas to replace coal and some oil utilization. 

The second report released by the Fraser Institute argues that expanding pipeline capacity to allow Canadian oil exports to Asia will pour billions of dollars into government coffers, create thousands of jobs, and bring substantial benefits to First Nations and pensioners. (See GLOBE-Net article "Building infrastructure to ship oil to Asia needed now says Fraser Institute.") 

Gerry Angevine, Fraser Institute senior economist and co-author of Ensuring Canadian Access to Oil Markets in the Asia-Pacific Region, writes "The Alberta oil sands present Canadians with a unique nation-building opportunity. As both a country and as individuals, we already have a substantial investment in the oil sands and we can take greater advantage of this resource if we can reduce our reliance on the United States and open new markets for Canadian oil in the Asia-Pacific." 

The report decries outdated regulatory processes and procedures, and unwieldy environmental review processes and calls for action to expedite the environmentally-responsible development of the oil sands. 

But the recommendations do not dismiss or minimize environmental or First Nations issues and concerns. In fact, the report calls for streamlining regulatory review processes to enable joint federal-provincial environmental review processes for projects that require approvals from both levels of government. 

It calls for discussions between project proponents and First Nations well before applications are filed with the National Energy Board, a Joint Review Panel, or other government agencies, and involving federal and provincial government, as well as First Nations organizations in discussions with industry representatives to identify and approve in advance transportation corridors to be used for infrastructure development. 

It also calls for requiring First Nations' environmental concerns to be addressed under and in accordance with the Canadian Environmental Assessment Act and suggests legislation and regulations be put in place to provide for mandatory settlement mechanisms to resolve compensation-issue disputes with First Nations groups if and as required. 

Nor does the report dismiss or diminish the risks associated with pipeline oil spills and leaks. It calls for risk assessments in relation to "high consequence areas" as part of their integrated management plans; ensuring frequent and thorough environmental protection monitoring of pipelines; reducing the risk of pipelines being operated at greater than approved pressures; informing affected stakeholders more quickly when a pipeline leak does occur; and requiring proactive risk management policies to lower the frequency and severity of oil tanker spills. 

The Reality Check Cuts Both Ways.

Although the Fraser Institute report was written well before the release of the U.S. National Transportation Safety Board review of the rupture of the Enbridge pipeline in Michigan that polluted an ecologically sensitive wetland near the Kalamazoo River, the damning indictments of the Safety Board report have not been lost on the oil industry players. The message is simple: 'The public and government regulators will not tolerate incompetence. Public safety and environmental protection outweigh economic considerations in all respects'. 

Notwithstanding whatever arguments may be made about the expansion of the oil sands it is clear that all options for the movement oil sands oil to market must be explored and fully assessed for both economic and environmental risk. Decisions must be made based on solid fact and judgment as well as in the interests of all stakeholders.   

With respect to the use of natural gas as a transition fuel, research by GLOBE Advisors as part of the West Coast Clean Economy study suggests that exploiting natural gas as a stable one hundred-year supply of a cleaner energy source will reverberate throughout the economy. 

Our findings concur with those of Professor Cathles that natural gas use has great potential as a reliable energy source that can complement other renewable power sources and can be rolled out in the immediate term with great benefit to both the environment and the economy.  

Natural gas technologies and liquefied natural gas as a fuel alternative for powering industry and cleaner forms of transportation are also ripe with potential for job creation and investment promotion. This is particularly the case with respect to ferry fleets, large urban vehicle fleets, and long-haul intercity trucking. 

The GLOBE Foundation has always advocated the environment and the economy are two sides of the same coin. They cannot be separated and this fact bears heavily and equally on both governments as protectors of the public interest and business in the development of new markets and new resources. 

Critics might rightly point to the elephant that remains in the room, namely the impact that expanding the oil sands to service Asian markets will have on accelerating climate change. 

There are no easy answers to this one, and no one should minimize the importance of responsible environmental management of this critical energy resource. In the long run, reducing our dependence upon fossil fuels to drive our economy will hinge on the availability of viable alternate sources of energy. Both governments and business have a role to play here, particularly with respect to reinvesting some of the anticipated oil and gas export revenues into more diversified, cleaner and renewable energy options. 

There are no shortcuts to the low carbon future. That's the reality we must face together. 

John D. Wiebe

President and CEO