Calgary-based energy companies are vowing to continue their greenhouse gas reduction plans with or without a meaningful international protocol, following the recent collapse of climate-change talks at The Hague.
But environmental groups are warning that this May’s resumption of negotiations will be the final chance to produce a workable deal to cut gas emissions and reduce global warming.
“At The Hague, countries went to the precipice, and looked over the edge,” says Robert Hornung, climate-change director for the Pembina Institute for Appropriate Development.
“Hopefully that will cause some sort of soul searching. There’s no doubt that if we lose it in Bonn in six months, I think we really are dead. I don’t think we’ll be able to try again.”
The United Nations’ climate summit brought together more than 7,000 participants, 182 governments, and 323 intergovernmental and non-government organizations to work out the details of the 1997 Kyoto Protocol, which calls for a five-per-cent average cut in developed nations’ 1990 levels of emissions by 2010.
While the Kyoto pact established targets and outlined mechanisms to reach them, industrialized countries will not ratify the protocol until all the practical details are negotiated.
One of the main disagreements centred on a U.S. plan to allow countries to count carbon dioxide soaked up by forests and agricultural lands, or “carbon sinks” against emissions reduction targets — a proposal roundly rejected by the 15-nation European Union.
While some environmental groups paint a bleak picture of the deep divisions between the EU and Canada and the United States, energy sector representatives say they’re prepared to forge ahead with their own programs — and that no deal is better than a bad deal.
“We are still trying to understand what happened and where it’s going,” admits Pierre Alvarez, president of the Canadian Association of Petroleum Producers, which speaks for the upstream producing sector of the petroleum industry.
“The key thing from our point of view from the very beginning is that there was a high risk of a bad deal coming out of this. We’re pleased to see that didn’t occur.”
Alvarez notes the Canadian energy industry has already made progress in improving emission levels through flaring reductions, adopting new energy-efficient technology and reducing oilsands carbon dioxide emissions.
But he also believes it’s time for other sectors to step up to the plate. “Eighty-five per cent of the emissions are from consumption,” he notes, including industrial, personal and government consumption.
“It would shift the onus to the right balance, where every single consumer . . . needs to do their proportional piece. Our view is there has been too much focus at the production end.”
The federal government has already announced it plans to spend up to $500 million to reduce greenhouse gas emissions by about 65 megatonnes per year by 2008, or one-third of Canada’s commitment under the Kyoto Protocol. Ottawa is hoping provincial and industry initiatives will help make up the 199 megatonne balance of the Kyoto-agreed target.
Between 1990 and 1998, Canada’s total greenhouse gas emissions rose by 13 per cent, including oil and gas production and electricity generation. According to a Pembina Institute study, Alberta’s share of emissions total 201 megatonnes of carbon dioxide or equivalent gases.
Alberta Environment Minister Halvar Jonson, who participated in The Hague negotiations, said last week that it was unfortunate a consensus was not reached.
“Our private sector has been very anxious to get these details in place so they can accelerate actions on climate change; they will need to wait a little longer for this clarity,” Jonson said in a statement.
He added Alberta has a keen interest in the international negotiations because greenhouse gases have historically increased along with economic growth.
International competition remains a significant factor in the future talks and Alvarez says CAPP members want any deal to include a level playing field.
“From an oil and gas perspective, we’ve always been concerned that our competitors for investment dollars and opportunities have not been subject to the same kind of restrictions potentially that the Canadian industry could,” he says. “That needs to be levelled out. We’re all competing for the same energy investment dollar. To have us disadvantaged kills incentive to continue to improve.”
Gord Lambert, corporate director for sustainable development at Suncor Energy Inc., believes a deal is still possible if enough political will can be mustered.
“My view is that if it takes more time to sort through those issues properly, that’s better than rushing an agreement,” said Lambert, who attended talks at The Hague. “In international negotiations, if you agree to a bad deal or if you make mistakes over the resolution of those issues, it’s very difficult to correct them later.”
The sentiment is similar over at Petro-Canada, which has cut its greenhouse gas emissions by four per cent despite a 39 per cent increase in production over the past decade. “It’s better not to have knee-jerk reactions where countries or industries could be disadvantaged, or the costs of controlling greenhouse gases could be much higher than it needs to be,” says Greta Raymond, senior director for environment, health, safety and security.
“It’s very much an evolutionary process.”
Suncor, which recently teamed up with Partnership for Climate Action, an international coalition to combat climate change, is “just going to march along” in its own efforts to cut emissions, noted Lambert.
“We don’t think the issue is going away,” he added. “The orientation is at this point very much a voluntary action. We need to work hard to demonstrate that voluntary approaches can work.”
Lambert said his personal impression at the talks was that progress has been made in understanding the deep complexities of the protocol and its implementation. “The homework has been done, now political decisions are needed to put it into a different realm.
“I also saw much greater engagement of the financial community — the chartered accountancy firms and brokerage companies starting to step forward to set up infrastructure to make the mechanisms and the agreements workable.”
Robert Hornung of the Pembina Institute agrees that it’s in the best interests of the energy industry to have a deal reached in six months rather than another decade of uncertainty and possibly an agreement that is impossible to sustain.
“Everybody has an incentive in trying to ensure we come out of the meeting in May with something,” he says. “There’s a tremendous amount of pressure on governments to come up with a deal. This is an issue that’s creeping up steadily in public understanding, and they are getting pressure from industry to provide some clarity.
“Frankly, it’s an issue that governments have invested a tremendous amount of resources and capital in to try and manage. They don’t have an incentive to toss that away right now.”
Both Lambert and Raymond say while the science of global warming is still being debated — and in some corners hotly denied — their companies plan to continuing moving forward with positive action.
“Certainly the next science assessment report is going to indicate the (scientific) findings are starting to firm up,” predicts Lambert. “We’re not counting on the science on this issue unravelling in the way that some might suggest. We tend to look at it more from a perspective of risk management . . . and when governments engage in this way, representing the public interest, then we need to align with that direction.”
Adds Raymond: “I think the important thing is that Petro-Canada and a lot of companies realize it’s an issue in the minds of the public and for governments. If people are concerned about it, we can waste a lot of time debating or we can take actions that are good for our companies anyway.
“This issue is going to take quite a long time to resolve. But in the meantime, there’s an awful lot we can be doing that makes economic sense.”
