With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1477631
SEPTEMBER/OCTOBER 2022 BCBUSINESS 41 UN PHOTO/MARK GARTEN commercial successes resulting from CICE intervention. But Pierce says that Shell is "hoping the investment will generate sig- nificant value in profitable businesses." That, by itself, would create a benefit for an energy company operating in B.C. Perhaps more to the point, however, Shell is looking for good ideas. "We recog- nize that we don't have all the insights," Pierce admits when it comes to navigating the path to net-zero. In addition to the 2050 target, Shell is also committed to reduc- ing its production-generated emissions by 50 percent before 2030. And, thanks to a court case brought by a consortium of environmental groups in the Netherlands, Royal Dutch Shell is facing a legal order from the Hague District Court that it must reduce its own emissions—and those of its consumers—by 45 percent, also by 2030. In pursuit of that difficult and—barring success on appeal, legally enforceable—goal, Pierce says, "We have peaked oil." And yes, you read that correctly: one of the biggest oil companies in the world is now "enabling the natural decline of these assets," shift- ing primarily to natural gas. The least worst This brings us to the very British Columbian narrative that the optimal strategy for tran- sitioning away from the climate changing effects of fossil fuels is to invest in a less car- bon-intensive fossil fuel. That was certainly the consensus at the December 2021 Metro Vancouver Board of Trade Energy Forum, called "Finding Net Zero and Growing Our Economy, Together." There, five of the nine presenters were from the natural gas industry, and moderator and Bennett Jones LLP partner Sharon Singh got no argument when she declared, "I don't think there is anyone here who thinks that LNG is a bar- rier to net zero." If that log ic seems t wist y, Greg D'Avignon, president and CEO of the Busi- ness Council of British Columbia, is eager to straighten things out, although he admits, "it's complicated." In a global energy mar- ket, D'Avignon says it's crucial that we con- sider the net effect of our energy resources. First, China is on track to quadruple its installed energy generation capacity in the next 30 years—reaching 392 gigawatts by 2050. (For scale, B.C.'s new Site C hydro- electric dam will generate 1 gigawatt.) So, D'Avignon says, whatever burden natural gas adds to B.C.'s emission budget, it's still better to help China switch its new power sources from dirty coal to cleaner natural gas. And given that B.C.'s natural gas pro- ducers are reporting the lowest carbon intensity in the world, he says, it would be better still to be using B.C. natural gas. "We also need money to pay for our own energy transition," D'Avignon says, adding that natural gas—liquified and exported—could be an important source of that revenue. This, however, is an increasingly contro- versial view. The most recent report of the IPCC, released in April, said the slow transi- tion away from fossil fuels is leading us to a global overshoot of the Paris target to keep global average temperature increase under 1.5 degrees Celsius. U.N. secretary-general António Guterres took it a step further, say- ing that the world's governments and cor- porations are "adding fuel to the flames" by falling so short on their climate commit- ments. Guterres said: "Climate activists are sometimes portrayed as dangerous radi- cals. But the truly dangerous radicals are the countries that are increasing produc- tion of fossil fuels. Investing in new fossil fuel infrastructure is moral and economic madness." As if on cue, the Canadian government stepped up two days later to approve Bay du Nord, a deep-sea oil project off the New- foundland coast that is expected to pro- duce 40 Mt of CO2 over its 20- to 30-year life expectancy. It's not clear whether Bay du Nord inflates the previous federal esti- mate that oil and gas production in Canada would increase by 21 percent by 2030—a rate of expansion second only to the United States. Neither is it known how this project will impact Canada's national emissions performance as measured against the 2015 Paris commitments, which is already the worst among all nations in the G7. "Were on a very dangerous path," says Ian Bruce, deputy executive director of the David Suzuki Foundation. "We've already felt the brunt of extreme weather in B.C. in the last year: the flooding that did so much damage in the valley and the heat dome that killed hundreds of British Columbians. We've seen how this may go." Addressing D'Avignon's argument that B.C. gas is low carbon-density and therefore worth trad- ing into a global market, Bruce points to two scientific reports (one by the Suzuki Foundation in partnership with St. Francis Xavier University and the other by two Car- leton University professors) that show B.C.'s fracked gas to be more than twice as car- bon intensive as currently recorded. Rather than offsetting the carbon load from other sources, Bruce says, B.C. is just adding fuel to the problem… …and may soon be adding more: Shell announced in April that it is considering building a second phase of B.C. LNG, dou- bling the capacity of the liquified natural gas facility under construction in Kitimat. Beyond exceeding the carbon budget, the Canadian Climate Institute's Dale Beu- gin says there's another risk from all this fossil fuel enthusiasm: stranded assets. In a second 2021 report, called Sink or Swim, the CCI points out that "capital markets have awakened, and climate change is increas- ingly a factor in investment decisions. Inter- national investors with over US$43 trillion in assets under management have commit- ted to supporting net-zero emissions goals." (Of course, depending on your posi- tion, this decline in investor enthusiasm might not be a "problem." Another report released in March showed that Canadian banks had increased their fossil fuel financ- ing by 70 per cent in 2021 and that all five big banks— RBC, Scotiabank, TD, BMO, and CIBC—were among the top 20 fossil fuel financiers in the world.) Still, Beugin says, Sink or Swim confirms that "wind, solar, and electric vehicle bat- tery technology costs have fallen by 60 to 90 percent over the past decade," present- "The truly dangerous radicals are the countries that are increasing production of fossil fuels." –António Guterres, U.N. secretary-general