Canada is trying to perform a high wire act between maintaining its reputation as one of the world’s most climate-conscious superpowers on one side, and its position as one of the world’s largest and most powerful producers of fossil fuels on the other side. Canada has set some of the most ambitious decarbonization targets of any country on Earth. But it is also the fourth-largest oil producing nation, and actively expanding the industry’s reach and production.
Indeed, the Canadian oil industry is having a banner year. The Albertan oil sands have recently kicked their levels of output into overdrive, “making the country one of the top non-OPEC+ contributors to growing global supply this year, alongside the United States, Guyana, and Brazil,” Tsvetana Paraskova reported for Oilprice.com earlier this week. Indeed, Canada could even lead oil growth on a global scale this year. "Barring any unforeseen circumstances, Canada could be the largest source of increased oil supply across the globe in 2024," wrote TD Economics’ Marc Ercolao in a report released earlier this year.
This sudden uptick in production comes as a result of the Trans Mountain pipeline expansion project (TMX), which finally became commercially operational on May 1, after 12 years and 12 years and C$34 billion (USD$25 billion). Prior to the expansion, years of insufficient pipeline infrastructure had forced Albertan oil producers to sell their oil at a steep discount, resulting in revenue losses of tens of billions of dollars each year. With the addition of the pipeline, Alberta's oil producers can now send three times more oil to the Pacific coast, providing nearly 600,000 barrels per day (bpd) of additional market access, serving to revitalize the sector after years of struggle.
However, at the same time that the country is massively expanding its domestic oil production as well as its presence in global oil markets, Canada is also attempting to control its carbon footprint through increased carbon taxes and a proposed oil and gas emissions cap, introduced at the end of last year.
While the Canadian government attempts to simultaneously please the fossil fuel sector as well as environmentalists, it is simply angering both. Alberta Premier Danielle Smith has publicly slammed Prime Minister Justin Trudeau’s policies, saying: "Your carbon tax is crippling us, making everything more expensive. The cost of fuel, less food in the shopping cart, and extra fees on our utility bill," before adding, "Even your own Parliamentary Budget Officer confirms that this tax will devastate Canada's economy, costing billions and pushing families further into hardship.”
And those same taxes and caps that are earning the ire of the Canadian oil sands are also being scorned by climate activists. The decarbonization measures introduced by Trudeau are laughably insufficient to meet the nation’s decarbonization goals, which are looking increasingly unrealistic as the oil industry ramps up production levels. “Today Canada remains the only G-7 country with higher emissions than in 1990,” the Wall Street Journal recently reported. “Temperatures in the country’s north are rising three times faster than the rest of the world.” Indeed, Climate Action Tracker has rated Canada’s climate efforts as “highly insufficient” and has called into question the credibility of the country’s own climate targets.
The result of Canada’s inability to reconcile its ongoing reliance on and commitment to oil and gas with its own climate policies have yielded disastrous results for the country’s leaders. The country is increasingly receiving criticism for its focus on green-washed optics over real progress toward decarbonization at the same time that it alienates its own voter base in Albertan oil country.
“The approach has made climate policy one of the country’s most divisive issues, weakened Trudeau’s minority government and highlighted the pitfalls facing oil-rich countries around the world trying to meet climate goals,” the Wall Street Journal reports.
By Haley Zaremba for Oilprice.com
ADVERTISEMENT
More Top Reads From Oilprice.com:
- Houthis Showcase Drone Boat as Another Merchant Ship Falls Victim
- China’s Surging Commodity Exports Suggest Weak Domestic Demand
- UK Government Invests £2.5 Billion in Sustainable Steel Manufacturing
