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What will new fuel standards do to gas prices? The Baloney Meter weighs in

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OTTAWA — “Your secret fuel tax will undoubtedly increase the cost of gasoline by at least another four cents a litre, a fact you continue to hide.”  — Conservative Leader Andrew Scheer in a letter to Prime Minister Justin Trudeau

Conservative Leader Andrew Scheer looked this week to play off the sensitivity Canadians have to changes in gas prices, warning of an increase “by at least another four cents a litre” because of planned standards to make fuels cleaner.

The implication in his letter to Prime Minister Justin Trudeau is that overall costs for consumers would go up as a result of the standard, which is a few years from coming into force and separate from the carbon tax.

Do Scheer’s extra cents make sense, or is the price being pumped up?

The Canadian Press Baloney Meter is a dispassionate examination of political statements culminating in a ranking of accuracy on a scale of “no baloney” to “full of baloney” (complete methodology below).

Spoiler alert: This one earns a rating of “some baloney.” Here’s why.

The facts

The Liberals launched consultations in late 2016 about developing a clean-fuel standard that would set limits on carbon emissions from the burning of fossil fuels, a measure known as carbon intensity. Among the options to meet the standard for producers is to include more ethanol or biofuels in gas at the pumps.

Gas prices are a combination of the cost of crude oil, refining and transportation, government taxes, and retailer mark-up. Mixing ethanol is an additional cost because of separate purchase, transport and infrastructure requirements, such as holding tanks at pumps.

A cost-benefit analysis released by Environment Canada in February acknowledged the costs of implementing the standard to reduce carbon intensity “would likely be passed” on to consumers, but didn’t estimate how much those might be.

In April, the Canadian Chamber of Commerce estimated an increase of 1.5 cents per litre by 2025, which the report noted was a conservative estimate.

Like the earlier federal report, the organization acknowledged clearer calculations would come once the final regulatory text is released.

Simon Jefferies, a spokesman for Scheer, said the Conservatives spoke with stakeholder organizations and policy experts to come up with the estimate, and relied on a study by Navius Research Inc. done for Clean Energy Canada, a think-tank at Simon Fraser University.

That study for Clean Energy Canada estimated an increase of five cents per litre by 2030.

The experts

Dan Woynillowicz from Clean Energy Canada said modelling in the study cited by the Conservatives took into account the effects that policies like increasing fuel-efficiency standards in vehicles would have on household budgets. The overall result? Consumers come out ahead because of savings elsewhere.

To look at the per-litre cost in isolation, he said, is “a false way to look at it.”

“While they (consumers) might face higher per-litre costs for gasoline, they will be driving a much more fuel-efficient vehicle, and so the benefits of that outweigh those additional costs in terms of what they’re left with at the end of the month,” Woynillowicz said.

It’s the other side of the balance sheet that Mark Jaccard points to.

“If a politician focuses only on the increase in the price of gasoline and does not point out that this lowers the price of zero-emission alternatives that we must be quickly switching to — like Norway, Sweden, California, Brazil, China — (that politician) should score at the maximum on the baloney meter,” said Jaccard, a professor of resource and environmental management at Simon Fraser, in an email.

British Columbia provides an example. Dan McTeague, a former MP turned gas-price analyst at GasPriceWisdom.com, estimates the province’s fuel standard increased prices by between eight and 15 cents per litre.

“That doesn’t necessarily mean you can transpose that, but … I thought the four cents that Scheer provided was low,” McTeague said.

Woynillowicz said federal regulations wouldn’t prescribe how fuel providers must comply, allowing them to come up with most cost-effective way, including through a credit-trading market, similar to a cap-and-trade system, which would reduce consumer costs for renewable energy sources.

If companies decide to buy credits, then the price effect would likely be around four cents per litre, McTeague said. If companies opt for more ethanol in their gas blends, then the price per litre will likely be higher, he said. But much relies on the regulations themselves, McTeague said, meaning “the devil is in the details.”

The verdict

There’s general agreement that gas prices would rise with clean-fuel standards. Less clear is by how much. Scheer’s statement also doesn’t take into account the net effect on consumers who could see prices drop in other energy-consumption areas. Missing important details needed for a fuller understanding of the issue leads to a finding of “some baloney.”

Methodology

The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:

No baloney — the statement is completely accurate

A little baloney — the statement is mostly accurate but more information is required

Some baloney — the statement is partly accurate but important details are missing

A lot of baloney — the statement is mostly inaccurate but contains elements of truth

Full of baloney — the statement is completely inaccurate

Jordan Press, The Canadian Press

Alberta

Are Americans to blame for all this animosity between environmentalists and supporters of Canada’s oil and gas industries?

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As Canada’s election campaign heats up, so does the debate over energy and the environment.   Instead of talking about how Canada can export both energy and environmental technology related to energy, federal leaders like Elizabeth May and Jagmeet Singh are promoting a growing chasm between energy and the environment.  Both would refuse to complete the Trans Mountain Pipeline expansion.  For his part, Prime Minister Trudeau is promising a substantial overhaul of energy production to make the nation a “net-zero” producer of Carbon Dioxide by the year 2050.   Meanwhile Jason Kenney and hundreds of thousands of Western Canadians are convinced oil and gas production, including Alberta’s Oil Sands are a great solution for both the world’s energy and environmental concerns.  But communicating this message to Canadians and people around the world has been an uphill battle.

In the midst of the growing anger and mistrust a new documentary has been produced about the work of Vivian Krause.  Krause spent years gathering evidence of a secret campaign funded by American groups to provoke exactly this type of battle in Canada.   The film is called “Over a Barrel” and the following description and trailer come from the website overabarreldoc.com.  The film is screening in Edmonton and Calgary in early October.

Over a Barrel is a short political documentary about the work of Vivian Krause, and evidence she discovered showing U.S foundations are funding activism against the Canadian oil and gas industry. The supposed goal of this “Tar Sands Campaign”, funded by the Rockefeller Brothers Fund and other U.S. charitable foundations, is to fight pipeline approvals in Canada and stop Canadian oil from reaching overseas markets. We focus on the negative consequences this has had on the Alberta economy, First Nations communities and the rising threat of western separatism.

UPCOMING SCREENINGS

October 5, 2019

Edmonton

Metro Cinema @ 3:30pm

October 7, 2019

Calgary

Globe Cinema @ 7:30pm

October 8, 2019

Calgary

Plaza Theatre @ 7:00PM

 

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Alberta

Homes by 3Leafs showcases the first single family, shipping container home built in Calgary.

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Homes by 3Leafs showcases the first single family, shipping container home built in Calgary. The Alberta based company is changing how homes are constructed by transforming recycled steel containers into high performance, energy efficient homes with net zero capabilities.

September 19, 2019, Calgary, AB ​Homes by 3Leafs gave media an exclusive inside look into the sleek, elegant modern two-storey home made from four recycled shipping containers. The home is nestled in the eco-friendly community, Echohaven, in northwest Calgary.

Som Sourachit, C.E.O. of Homes by 3Leafs describes this moment as pivotal. “Our high performance, energy efficient houses reduce waste in landfills by repurposing steel shipping containers into dream homes. The houses have net zero capabilities and are the new blueprint for how we should build while protecting our environment. “

It’s estimated there are millions of shipping containers piling up in landfills worldwide. The repurposed containers make the perfect envelope for a home, and reduce the heavy reliance on trees used for construction. The steel means shipping container homes are sturdier and will last for generations with fewer repairs than traditional stick builds over time.

The homeowner, Jaime Turner, added “This is a teaching moment for my young daughter. We wanted to build a legacy for her. This is our forever home and we know because it’s made of steel it will last for generations, and an added bonus is, we are being good to our environment!”

Homes by 3Leafs is proud to be leading the way in new home construction. Currently, 6 building projects are underway.

About Homes by 3Leafs

Homes by 3Leafs is a global company based in Edmonton and is comprised of a team of architects, construction experts, designers, and engineers with years of experience developing stunning homes. By using shipping containers to build, Homes by 3Leafs is committed to saving the environment. Thousands of containers pile up in landfills unused while forests can’t be cut down fast enough to support the robust construction industry. The company leads the way with cutting edge technology and new innovations to help the world build beautiful sustainable homes to last hundreds of years.

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october, 2019

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