Resource Works Margareta Dovgal on B.C. Climate Policies, and Their Implications

From EnergyNow.ca

By Margareta Dovgal

In the midst of a memorable polar cold snap in January, British Columbia faced a stark reality that should serve as a valuable lesson for climate activists and policymakers alike. As Stewart Muir, the founder of our organization, aptly pointed out at the time, “When it’s cold like now, BC gets two thirds of its energy for heating, etc., from natural gas. Promises to ditch the fuel by 2030, 2035, 2050, are political theatre to be taken with a large scoop of road salt.”

The deep freeze eventually thawed, but it left behind a lingering question about the feasibility of ambitious climate policies in a province heavily reliant on natural gas for its energy needs. The provincial government responded with a proposal to ban conventional gas equipment in new residential, commercial, and institutional buildings by 2030. This move would not only prohibit the sale and installation of gas water heaters but also impose restrictions on new gas furnaces and boilers, permitting them only as part of a hybrid dual-fuel system that integrates electric or gas heat pumps with conventional gas combustion appliances.

While the government embarked on consultations with natural gas contractors, First Nations, and other stakeholders, the public sentiment was reflected in a Castanet news service poll in the Okanagan region. The poll asked, “Should BC ban the use of conventional natural gas for home heating as of 2030?” The results were strikingly clear:

No: 12,460 (91%)
Yes: 725 (5.3%)
Unsure: 501 (3.7%)

However, the proposal to shift away from natural gas raised concerns about BC’s electricity infrastructure. During the cold snap, the province had to import 15% of its electricity, and when Alberta faced even colder temperatures, BC had to step in and send power across the border. Contractors like Al Russell of Prince George questioned the province’s ability to meet increased electricity demands, especially with the limitations of existing infrastructure.

Russell pointed out the need for significant upgrades to the electricity grid, including more and larger transmission lines and transformers. The pressing question remained: “Where are we getting this power from and how are we getting it there? When does this expansion start, and how much will it cost?”

These concerns are not unique to BC. A recent report from the Public Policy Forum emphasized that to achieve its goal of net-zero emissions by 2050, Canada must invest heavily in expanding its electricity generation capacity. This ambitious undertaking comes with a potentially significant cost, with the report envisioning a landscape filled with new dams, turbines, nuclear plants, and solar panels.

Even though BC’s BC Hydro once maintained that no additional power generation was needed, the province now anticipates a shift from a surplus to a deficit of power by 2030, even with the Site C power dam set to be operational by 2025. Consequently, BC Hydro plans to seek new clean and renewable energy sources through a competitive process, inviting power providers to contribute to the province’s energy needs.

Premier David Eby has also announced a significant update to Hydro’s 10-year capital plan, earmarking nearly $36 billion for community and regional infrastructure projects by 2034. However, building new transmission lines in the past has proven to be a lengthy process, taking anywhere from eight to ten years. Eby himself acknowledged that such delays were unacceptable.

Chair of the Energy Futures Initiative, Barry Penner, highlighted the findings of the North American Electric Reliability Corporation, which forecasted increased energy risks for BC in 2026 due to rising demand and the retirement of natural-gas-fired generation.

All these developments transpire as BC advances its CleanBC policy and program. Yet, the BC Business Council voiced concerns about the economic implications, stating that the provincial government’s policies could potentially shrink BC’s economy by $28 billion by 2030, setting prosperity back more than a decade.

The cold snap served as a reminder that the impact of these policies goes beyond mere comfort or convenience. In northern climates like BC’s, extreme cold can pose significant hazards to human health, wellness, and survivability. It also underscores the importance of stable and secure infrastructure, especially with the risk of water pipes bursting during freezing temperatures.

As BC strives to replace some natural gas services with electricity, affordability becomes a pressing concern. There are three key aspects to consider:

Capital and Operating Costs: Transitioning to electricity comes with increased costs compared to running natural gas systems.
Heat Pump Installation: Installing heat pumps adds to the financial burden.
Housing and Rent Costs: The ripple effect of increased costs may result in higher housing and rent expenses, exacerbating affordability challenges in the region.

An editorial from The Orca labeled BC’s natural gas plan as ‘all hot air,’ expressing concerns about making new homes more expensive to build and live in, especially during a housing crisis.

The climate policies in BC carry significant implications, not only for the affordability of living in the province but also for its economic growth and stability. These policies have the potential to impact the types of jobs available, their associated wages, and the province’s global competitiveness.

The net outcome of these policies could determine the fate of industries deeply rooted in BC’s history. If these industries can no longer thrive due to regulatory changes, it may have far-reaching consequences for the well-being of the province’s residents.

As BC navigates this complex landscape, there is an opportunity for the provincial government to engage with and consider the concerns of the public. With an election year on the horizon, the public should continue to ask questions, seek clarity, and actively participate in shaping the future of their province.

Margareta Dovgal on these issues, and more, on Vancouver’s Spice Radio: https://ow.ly/hxsB50QvfJ9

Margareta Dovgal is Managing Director of Resource Works. Based in Vancouver, she holds a Master of Public Administration in Energy, Technology and Climate Policy from University College London. Beyond her regular advocacy on natural resources, environment, and economic policy, Margareta also leads our annual Indigenous Partnerships Success Showcase. She can be found on Twitter and LinkedIn.

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Federal government’s GHG reduction plan will impose massive costs on Canadians

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Federal government’s GHG reduction plan will impose massive costs on Canadians

Published on July 26, 2024

Todayville

From the Fraser Institute

By Ross McKitrick

Many Canadians are unhappy about the carbon tax. Proponents argue it’s the cheapest way to reduce greenhouse gas (GHG) emissions, which is true, but the problem for the government is that even as the tax hits the upper limit of what people are willing to pay, emissions haven’t fallen nearly enough to meet the federal target of at least 40 per cent below 2005 levels by 2030. Indeed, since the temporary 2020 COVID-era drop, national GHG emissions have been rising, in part due to rapid population growth.

The carbon tax, however, is only part of the federal GHG plan. In a new study published by the Fraser Institute, I present a detailed discussion of the Trudeau government’s proposed Emission Reduction Plan (ERP), including its economic impacts and the likely GHG reduction effects. The bottom line is that the package as a whole is so harmful to the economy it’s unlikely to be implemented, and it still wouldn’t reach the GHG goal even if it were.

Simply put, the government has failed to provide a detailed economic assessment of its ERP, offering instead only a superficial and flawed rationale that overstates the benefits and waives away the costs. My study presents a comprehensive analysis of the proposed policy package and uses a peer-reviewed macroeconomic model to estimate its economic and environmental effects.

The Emissions Reduction Plan can be broken down into three components: the carbon tax, the Clean Fuels Regulation (CFR) and the regulatory measures. The latter category includes a long list including the electric vehicle mandate, carbon capture system tax credits, restrictions on fertilizer use in agriculture, methane reduction targets and an overall emissions cap in the oil and gas industry, new emission limits for the electricity sector, new building and motor vehicle energy efficiency mandates and many other such instruments. The regulatory measures tend to have high upfront costs and limited short-term effects so they carry relatively high marginal costs of emission reductions.

The cheapest part of the package is the carbon tax. I estimate it will get 2030 emissions down by about 18 per cent compared to where they otherwise would be, returning them approximately to 2020 levels. The CFR brings them down a further 6 per cent relative to their base case levels and the regulatory measures bring them down another 2.5 per cent, for a cumulative reduction of 26.5 per cent below the base case 2030 level, which is just under 60 per cent of the way to the government’s target.

However, the costs of the various components are not the same.

The carbon tax reduces emissions at an initial average cost of about $290 per tonne, falling to just under $230 per tonne by 2030. This is on par with the federal government’s estimate of the social costs of GHG emissions, which rise from about $250 to $290 per tonne over the present decade. While I argue that these social cost estimates are exaggerated, even if we take them at face value, they imply that while the carbon tax policy passes a cost-benefit test the rest of the ERP does not because the per-tonne abatement costs are much higher. The CFR roughly doubles the cost per tonne of GHG reductions; adding in the regulatory measures approximately triples them.

The economic impacts are easiest to understand by translating these costs into per-worker terms. I estimate that the annual cost per worker of the carbon-pricing system net of rebates, accounting for indirect effects such as higher consumer costs and lower real wages, works out to $1,302 as of 2030. Adding in the government’s Clean Fuels Regulations more than doubles that to $3,550 and adding in the other regulatory measures increases it further to $6,700.

The policy package also reduces total employment. The carbon tax results in an estimated 57,000 fewer jobs as of 2030, the Clean Fuels Regulation increases job losses to 94,000 and the regulatory measures increases losses to 164,000 jobs. Claims by the federal government that the ERP presents new opportunities for jobs and employment in Canada are unsupported by proper analysis.

The regional impacts vary. While the energy-producing provinces (especially Alberta, Saskatchewan and New Brunswick) fare poorly, Ontario ends up bearing the largest relative costs. Ontario is a large energy user, and the CFR and other regulatory measures have strongly negative impacts on Ontario’s manufacturing base and consumer wellbeing.

Canada’s stagnant income and output levels are matters of serious policy concern. The Trudeau government has signalled it wants to fix this, but its climate plan will make the situation worse. Unfortunately, rather than seeking a proper mandate for the ERP by giving the public an honest account of the costs, the government has instead offered vague and unsupported claims that the decarbonization agenda will benefit the economy. This is untrue. And as the real costs become more and more apparent, I think it unlikely Canadians will tolerate the plan’s continued implementation.

Author:

Ross McKitrick

Professor of Economics, University of Guelph

Economy

Kamala Harris’ Energy Policy Catalog Is Full Of Whoppers

Published on July 25, 2024

Todayville

From the Daily Caller News Foundation

By DAVID BLACKMON

The catalog of Vice President Kamala Harris’s history on energy policy is as thin as the listing of her accomplishments as President Joe Biden’s “Border Czar,” which is to say it is bereft of anything of real substance.

But the queen of word salads and newly minted presumptive Democratic presidential nominee has publicly endorsed many of her party’s most radical and disastrous energy-related ideas while serving in various elected offices — both in her energy basket-case home state of California and in Washington, D.C.

What Harris’s statements add up to is a potential disaster for America’s future energy security.

“The vice president’s approach to energy has been sophomorically dilettantish, grasping not only at shiny things such as AOC’s Green New Deal but also at the straws Americans use to suck down the drinks they need when she starts talking like a Valley Girl,” Dan Kish, a senior research fellow at Institute for Energy Research, told me in an email this week. “To be honest, she’s no worse than many of her former Senate colleagues who have helped cheer on rising energy costs and the fleeing American jobs that accompany them. She doesn’t seem to understand the importance of reliable and affordable domestic energy, good skilled jobs or the national security implications of domestically produced energy, but maybe she will go back to school on the matter. No doubt on her electric school bus.”

During her first run for the Senate in 2016, Harris said she would love to expand her state’s economically ruinous cap-and-trade program to the national level. She also endorsed then-Gov. Jerry Brown’s harebrained scheme to ban plastic straws as a means of fighting climate change.

Tim Stewart, president of the U.S. Oil and Gas Association, told me proposals like that one would lead during a Harris presidency to the “Californication of the entire U.S. energy policy.” “Historically,” he added, “the transition of power from a president to a vice president is designed to signal continuity. This won’t be the case, because a Harris administration will be much worse.”

But how much worse could it be than the set of Biden policies that Harris has roundly endorsed over the last three and a half years? How much worse can it be than having laughed through a presidency that:

— Cancelled the $12 billion Keystone XL Pipeline on day one.

— Enacted what many estimate to be over $1 trillion in debt-funded, inflation-creating green energy subsidies.

— Refused to comply with laws requiring the holding of timely federal oil and gas lease sales.

— Instructed its agencies to slow-play permitting for all manner of oil and gas-related infrastructure.

— Tried to ban stoves and other gas appliances.

— Listed the Dunes Sagebrush Lizard as an endangered species despite its protection via a highly-successful conservation program.

— Invoked a “pause” on permitting of new LNG export infrastructure for the most specious reasons imaginable.

— Drained the Strategic Petroleum Reserve for purely political reasons.

As Biden’s successor for the nomination, Harris becomes the proud owner of all these policies, and more.

But Harris’ history shows it could indeed get worse. Much worse, in fact.

While mounting her own disastrous campaign for her party’s presidential nomination in 2020, Harris endorsed a complete ban on hydraulic fracturing, i.e., fracking. She later conformed that position to Biden’s own, slightly less insane view, but only after being picked as his running mate.

Consider also that while serving in the Senate in early 2019, Harris chose to sign up as a co-sponsor of the ultra-radical Green New Deal proposed by New York Rep. Alexandria Ocasio Cortez. It is not enough that the Biden regulators appeared to be using that nutty proposal and climate alarmism as the impetus to transform America’s entire economy and social structure: Harris favors enacting the whole thing.

As I have detailed here many times, every element of climate-alarm-based energy policies adopted by the Biden administration will inevitably lead the United State to become increasingly reliant on China for its energy needs, in the process decimating our country’s energy security. By her own words and actions, Harris has made it abundantly clear she wants to shift the process of getting there into a higher gear.

She is an energy disaster-in-waiting.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.