Boycotts of Canadian energy will leave the planet worse off — good work, activists!
Special to Financial Post Cody Battershill
Wouldn’t it make more sense from a sustainability perspective to ensure a responsible supplier like Canada stays in the game?
The latest decision by a large Geneva-based financial company — this time Zurich Insurance Group — to shift away from Canadian oilsands investments is obviously bad for Alberta and the oilsands but it’s also bad for the global environment. Although the Canadian energy industry leads the world in innovation, some activists and their followers never acknowledge the enormous investment and resulting gains the sector continues to make in sustainability.
Zurich recently threatened to drop Canadian oilsands producers, pipeline companies and crude-by-rail facilities if within two years they didn’t show their investment plans are consistent with global efforts to reduce the impact of climate change. But the effect of its withdrawal will be to penalize high-performing environmental innovators like Canada and reward unsavoury suppliers like Saudi Arabia and Venezuela — with no net global environmental benefit and maybe even a loss.
After all, global demand for oil continues to grow, and that demand is sure to be met by the global supply pool, whether or not Canada is part of it. Wouldn’t it make more sense from a sustainability perspective to ensure a responsible supplier like Canada stays in the game?
Greenhouse gas emissions (GHG) per barrel of oil produced in our oilsands are within the range of many other crude oils produced worldwide. More importantly, our innovation trend-line should be the envy of the world. The federal government estimates that in 2014, GHG emissions per barrel of oilsands production were 31 per cent lower than 1990 levels, while a 2018 report by the research firm IHS Markit projected the intensity of oilsands emissions would improve even more — by an additional 16 to 23 per cent by 2030. Steam-assisted gravity drainage, which may account for 75 per cent of oilsands growth to 2030, will be a big factor in reducing GHG intensity.
But don’t expect any credit from activists. Why? Because that’s the “Greenpeace business model.” Activists see no benefit in giving companies credit for research and development in innovation and new tech — unless they have been targeted in an activists’ campaign. In that case, three things will likely happen: activists target a resource industry corporate customer. The company eventually caves to the activists’ demands to save its brand’s reputation. The activists declare victory, give the company credit for responding to pressure, and fundraise on the strength of their new victory.
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