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Is the Canadian Prime Minister Out of Options on Keystone?

Stephen Harper Canada and Keystone

It was big news earlier this month when CBC News revealed that Canadian Prime Minister Stephen Harper had written to President Barack Obama in late August, proposing “joint action to reduce greenhouse gas emissions in the oil and gas sector” if that’s what it takes to win approval of the Keystone XL pipeline.

But it’s hard to imagine what the Harper can offer to meet Obama’s bottom-line condition for the project. “The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward,” he said in a speech at Georgetown University in late June, where he unveiled his climate action plan. “It’s relevant.”

This is Stephen Harper’s problem.

All the reputable science sets an immutable 2050 deadline for an 80% reduction in industrialized nations’ greenhouse gas (GHG) emissions.

No low-carbon energy scenario has ever reconciled a dramatic drop in emissions with a dramatic increase in fossil fuel production.

Yet Stephen Harper leads a government whose economic agenda is singularly devoted to extracting and exporting as much tar sands oil as possible, as quickly as possible.

So if Obama stands by his position that “our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution,” Harper has only a few options. And none of them supports the energy policy he has pursued since he took office in 2006.

Option #1: Downplay Keystone’s GHG Impact

Keystone proponents have tried hard to make the case that the pipeline won’t lead to a significant net increase in greenhouse gas emissions. It hasn’t worked. That’s why Harper is scrambling for a Plan B.

Early this year, Oil Change International and the Natural Resources Defense Council argued that millions of tonnes of GHG emissions had been left out of the State Department’s analysis of the Keystone project: 27.6 million tonnes of direct emissions per year based on figures from the U.S. Environmental Protection Agency, plus another 16.6 million tonnes from associated petroleum coke production.

The State Department’s lead argument was that Canada would just move its supply by other means if the Keystone project failed. But briefing notes prepared last March for Canadian Natural Resources Minister Joe Oliver showed that the government saw Keystone as an important tool for expanding tar sands production.

“In order for crude oil production to grow, the North American pipeline network must be expanded through initiatives such as the Keystone XL Pipeline project,” stated the briefing note, obtained by the Calgary-based Pembina Institute through an access to information request.

That means Keystone will have its own definable GHG impact, even as communities mobilize (with quite some impact and a good deal of creativity) to stop Northern Gateway, Line 9, Energy East, and a host of other pipeline plans on the drawing boards.

Option #2: Put a Price on Carbon

A carbon price is widely seen as a way to connect the dots between the price of fossil fuels and the mounting societal costs of fossil fuel production. The U.S. government made its own contribution to that conversation when it updated its calculation of the social cost of carbon earlier this year.

After seeing that technical update published on the White House website, Harper could offer to adopt the U.S. calculation, or put forward his own version. But if the calculation were nothing more than a thought exercise, it would only acknowledge the impact of increased GHG emissions—it wouldn’t do anything to mitigate emissions from the Keystone project.

And if Canada agreed to apply a carbon price to tar sands oil, it would make the product less competitive against renewable energy resources that are already plummeting in price. In March, Canada’s Trottier Energy Futures Project pointed to dramatic reductions in solar and wind production costs. Since then, Deutsche Bank reported that rooftop solar would reach grid parity in several countries in 2014.

Solar panels produce electricity, not fuels. But a low-carbon energy strategy based on cost-competitive renewables would include deliberate efforts to electrify end uses that have been traditionally supplied by fossil fuels, including personal transportation, low-temperature heat, and some industrial applications.

Renewable energy won’t replace millions of barrels of fossil fuel production overnight. But a widening price disparity would not bode well for oil and gas.

Option #3: Promise to Capture the Carbon

Carbon capture and storage (CCS) technology was patented in the 1930s, and it’s the great, green hope of Canada’s oil and gas sector. If only the industry could build enough CCS plants, quickly and cost-effectively enough to scrub its raw product and store the carbon dioxide underground, fossil fuels could lay claim to a bright, low-carbon future.

Or so the story goes. Setting aside concerns about the reliability of the storage system, the sheer scope and cost of the pipelines that would be needed to transport the CO2, and the GHGs emitted when the oil is actually burned at the other end of the pipeline, it’s unlikely that CCS will deploy in time to solve Harper’s problem.

The International Energy Agency estimates that the world would need 120 operational CCS plants by 2020 to stay on track for a 2°C limit on global warming, according to the 2012 Status Report of the Global CCS Institute, and 1,500 by 2035, according to the BBC. But the CCS Institute noted that:

Such an outcome looks very unlikely, as only 51 of the 59 remaining projects captured in the Global CCS Institute’s annual project survey plan to be operational by 2020, and inevitably some of these will not proceed.

Most analysts expect CCS to enter widespread use in 2030 or later. By then, at present growth rates, the world will have blown through the 565-gigatonne emissions limit to which we have to adhere through 2050, to have a four in five chance of averting runaway climate change.

Canadian oil and gas companies have also been looking at a variety of exotic processes to separate carbon dioxide during the tar sands extraction process. But those technologies haven’t even begun the leap from lab test to field pilot that will determine how they perform in a rugged, mid-northern environment. They may some day be viable, even essential, but they’d be a frail platform for a presidential decision to approve the Keystone permit.

Option #4: Make North America an Energy Productivity Supergiant

If Harper really wanted to align with the national interest that Obama laid out in his Georgetown speech, he would put forward an ambitious, North America-wide effort to take advantage of the energy savings that are just beyond our reach.

It would be smart policy. Even visionary policy. It would build Canada’s cleantech industries and help both countries catch up in the global race for clean, green energy.

But Harper won’t do it. That’s because a massive shift to energy efficiency and productivity would fundamentally undermine much of what the Prime Minister has tried to achieve for the better part of a decade.

Energy analysts have known for 30 years or more that the cheapest unit of fuel or electricity is the unit you never have to produce, and the Ontario Clean Air Alliance’s analysis for one Canadian province holds true across North America. “Ontario has huge energy efficiency potential—we use 50% more energy per person than our neighbours in New York State,” the Alliance said in a recent bulletin. “That means the best way to lower bills and greenhouse gas emissions (GHG) is to go all out on improving efficiency.”

Harper could even break new ground, catapulting to a leading role in clean energy leadership, by pointing out that most of those savings take place outside the energy system.

“The improvement in Canada’s energy commodity productivity is the single largest contributor to the country’s energy security over the last 40 years,” wrote veteran energy modeler Ralph Torrie in a post for the Trottier Project. “It saves us more fuel and electricity today than the combined total of all the new sources of oil, gas, coal, nuclear, hydro, solar, wind, and biomass energy we’ve developed over the last four decades.”

The good news is that a coherent strategy to tap into these upstream energy savings could be the surest way for Canada to gain credibility with the U.S. president. The bad news, for Harper, is that it would make Keystone an even tougher sell. It would cut into demand for tar sands oil. And even more fundamentally, by solidifying the efficiency gains that are the cornerstone of any low-carbon energy strategy, it would pull North America toward an energy future in which fossil fuels gradually become redundant.

What Do You Do When There’s Nothing to Do?

And yet, the Prime Minister’s Office did write to the White House to open a dialogue on greenhouse gas reductions. If it really turns out that there’s nothing substantive for Harper to do, his only remaining option will be to spin an emissions plan that still has a place for Keystone. Low-carbon researchers and anti-pipeline activists will certainly be paying attention. But the White House, too, had best be watchful for a plan that is destined to collapse within minutes, once it begins to circulate in the online communities that played such a major role in both of Obama’s elections.

Photo Credit: Stephen Harper and Keystone XL/shutterstock

Mitchell Beer's picture

Thank Mitchell for the Post!

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Steve K9's picture
Steve K9 on Sep 11, 2013 3:14 pm GMT

I may be misquoting a bit, but James Hansen: ‘If the Tar Sands are developed, it’s over’.

Michael Jones's picture
Michael Jones on Sep 13, 2013 2:42 am GMT

I dont see us doing it…too little too late and a lot more folks coming to the table to feast. The time and numbers are too great to cut back. But maybe a miracle will happen….you never know. Humans are clever and lucky…so far…hope the luck doesn’t run out anytime too soon!

Roger Faulkner's picture
Roger Faulkner on Sep 13, 2013 11:01 pm GMT

There is another big initiative that makes great sense, and would have a greater positive impact than Keystone’s negative impact: jointly get serious about a North American supergrid. Such a supergrid, by extending up into Canada would make it possible to balance wind and solar with dispatchable hydro from Northern Canada (this is how Denmark is able touse 30% wind energy: because the balance it with dispatchable hydro, largely from Norway).

Mitchell Beer's picture
Mitchell Beer on Sep 16, 2013 1:06 am GMT

That’s a great point, Roger, thanks. As I’m sure you know, the U.S. National Renewable Energy Laboratory broke new ground in this area with its 2012 Renewable Electricity Futures Study ( One of the main takeaways from the NREL website: “Renewable electricity generation from technologies that are commercially available today, in combination with a more flexible electric system, is more than adequate to supply 80% of total U.S. electricity generation in 2050 while meeting electricity demand on an hourly basis in every region of the country.”

You’re absolutely right that there are huge opportunities here for Canada, as well. Which is great news for anyone looking to reduce their greenhouse gas emissions, not so good for a government intent on increasing the country’s tar sands production and exports!

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