When the International Energy Agency convened a ministerial meeting of its member countries this week to plot a response to the energy crisis caused by Russia’s invasion of Ukraine, Canada’s man at the table was pleasantly surprised by how “bullish and aggressive” his European counterparts were on two related fronts.
The first, Natural Resources Minister Jonathan Wilkinson said in an interview after the meeting, was eliminating dependence on Russian oil and gas as expeditiously as possible, which the group unanimously resolved to do.
The second was accelerating the energy transition away from fossil fuels entirely, which he now thinks will happen in Europe “a lot quicker than many had been assuming.” That’s because of a suddenly growing recognition that shifting to non-emitting fuel sources is necessary both to fight climate change – already more of a priority in Europe than elsewhere – and to reduce reliance on the bad or unreliable actors responsible for much of the world’s oil-and-gas supply.
They’re twin goals Mr. Wilkinson believes Canada has a chance to support – though how exactly is fuzzy, at the moment, and a source of dispute in this country between boosters and skeptics of the domestic fossil-fuel sector.
What Europe is interested in, he said, is energy security. That means, in the long term, generating their own energy with renewable sources such as wind and solar power. And it means making stable arrangements “with secure, trusted partners like Canada that can supply energy that they can’t produce domestically and that will fit in the context overall of where they’re heading from a climate perspective.”
What he didn’t say, though it was clear from the conversation, is that Canada will need to become more strategic about where it has the greatest chance to help.
To some, including Alberta Premier Jason Kenney and leading members of the federal Conservatives, the obvious answer is for Canada to build infrastructure to get more of its oil and gas reserves to foreign markets.
The equally obvious obstacle is that, as evidenced by decades of painful experience, major pipelines or export facilities take a very long time to build here. The Trans Mountain pipeline, which has suffered cost overruns and delays, will be completed late next year at the earliest. The LNG Canada terminal being constructed on the west coast, to ship liquefied natural gas to Asia, won’t be ready before 2025. Plans for other natural gas export facilities – including in Atlantic Canada, for European access – have mostly gone nowhere.
So any major new Canadian plans to dramatically increase fossil-fuel export capacity would have to be contingent on the assumption that, contrary to the message at the IEA meeting, there will be increased demand many years from now.
Mr. Wilkinson signalled that’s not a bet his government is looking to make. “Europe intends to be far down the path [of transitioning to non-emitting energy] by the time you could think reasonably of taking a pipeline across this country,” he said. And, referencing this week’s UN report on climate change’s devastating effects, he expressed little enthusiasm for pushing long-term oil-and-gas reliance, even if Europe might be inclined toward it far into the future.
Nor is there much Ottawa could do immediately to get more oil and gas to Europe, or other markets that may feel a global energy crunch, using what little excess export capacity currently exists. As Mr. Wilkinson noted, Canada has fewer government levers to manage supply than most other fossil fuel-producing countries – no emergency reserve of the sort that the United States and others have announced they are tapping into to pump about 60 million oil barrels into the global market.
Where Mr. Wilkinson seems to see more potential to work with the Europeans – and more consistency with Canada’s own climate commitments – is in developing and scaling up alternative fuel sources.
In theory, that makes sense. In practice, there is much work to be done.
Hydrogen fuel was the primary example Mr. Wilkinson raised. It has already been central to European plans to decarbonize industry, but the continent is unlikely to produce enough of it to meet its needs. A year ago, Canada signed an agreement with Germany to work on a transatlantic hydrogen partnership.
But hydrogen is an increasingly competitive market, and Canada has been slower than elsewhere to develop strategies backed by public dollars. Plus, the effort here to date has primarily been around blue hydrogen, which involves producing the element from fossil fuels and using carbon-capture technology to minimize emissions. Countries such as Germany want green hydrogen, produced from renewables, which Canada hasn’t focused much on yet despite big potential.
Increased European interest in nuclear power – depending upon how that’s affected by safety concerns around Russia’s takeover of Ukraine’s largest nuclear facility – offers another potential avenue, given Canada’s history as a leader in that area.
Here, too, recent progress has been slow. While Mr. Wilkinson noted that Canada has been developing a new generation of small modular reactors, it’s not yet clear when there might be enough domestic use of them to prove the concept to trade partners.
Foreign demand for hydrogen, nuclear and other non-emitting energy sources may suddenly ramp up in a way that could not have been anticipated before the onset of war. And, given the Ukraine conflict’s extreme volatility, it will take a while to gauge how the market has shifted long-term.
For now, there are other ways Ottawa can show a degree of leadership. Its decision this week to make Canada the first country to ban imports of Russian oil was mostly symbolic, because we currently buy only a small amount of refined oil products from there and no crude at all. But the move may have helped encourage allies to do likewise. (On Friday, the United States was reportedly considering a similar ban.)
Later this month, Mr. Wilkinson will have an opportunity to trade ideas face to face with his foreign colleagues, during an IEA meeting scheduled to take place in Paris.
But if the tone of that gathering is similar to this week’s, it will increase the need for Canada to match and help meet the Europeans’ growing sense of urgency around weaning themselves off both Russia and planet-warming fossil fuels.
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