Canada Subsidizes the Fossil Fuel Industry by $2.7 Billion Every Year. Where Does That Money Go?

Canada’s fossil fuel industries are the recipients of $2.7 billion US ($3.6 billion CDN)  in handouts each year, despite a promise from all G20 nations, including Canada, to eliminate subsidies in 2009.

About $1.6 billion US of those subsidies came from the federal government with the rest distributed by the provinces, according to a new report from Oil Change International.

The report finds G20 countries spend about $452 billion US each year to prop up their oil, gas and coal industries.

The Liberals promised to “fulfill Canada’s G20 commitment to phase out subsidies for the fossil fuel industry,” in their election platform. The party singled out the Canadian Exploration Expenses tax deduction as too generous to industry, saying the tax break should only kick in if companies are completely unsuccessful in their resource exploration.

The saving will be redirected to investments in new and clean technologies,” the party platform says.

But the Canadian Exploration Expenses tax deduction isn’t the only place where companies can take advantage of a generous subsidy system.

So were else is the money coming from and going to?

Is it the Beginning of the End for the Alberta Oilsands?

A new report from Oil Change International challenges industry’s common assumption that the continued production of oilsands crude is inevitable.

The report, Lockdown: The End of Growth in the Tar Sands, argues industry projections — to expand oilsands production from a current 2.1 million barrels per day to as much as 5.8 million barrels per day by 2035 — rely on high prices, public licence and a growing pipeline infrastructure, all of which are endangered in a carbon-constrained world.

As the report’s authors find, growing opposition to oil production — especially in the oilsands, which is among the most carbon intensive oil in the world — has significantly altered public perception of pipelines, a change amplified by the cross-continental battles against the Enbridge Northern Gateway, Kinder Morgan Trans Mountain, TransCanada Energy East and TransCanada Keystone XL pipelines.

According to the report’s authors, production growth in the oilsands hinges on the construction of these contentious pipelines because the existing pipeline system is currently at 89 per cent capacity.

Alberta’s Climate Consultations: The Good, The Bad and The Downright Crazy

Much of the country is understandably pre-occupied with Monday’s federal election. But while we have all been watching the national drama unfold, something monumental happened in Alberta.

In a nutshell: big coal is pushing for renewable energy and big oil is re-iterating its push for a carbon tax.

Close to 500 individuals (including at least one alien — more on that to come), companies and NGOs submitted proposals to Alberta’s Climate Change Advisory Panel (chaired by University of Alberta economics prof Andrew Leach) about the kind of policies they think the new government should introduce to address spiking greenhouse gas emissions.

The significance of this for Alberta’s climate politics cannot be overstated. After years of stalling or stifling meaningful conversations, the province has now pulled off one of the country’s most important and interesting climate consultation processes.

The submissions, now accessible online, largely consist of the classic combo of recommendations from the usual suspects: phasing out coal-fired power plants, incentivizing renewable energy sources and introducing a proper carbon tax.

But there were also some fairly surprising sources of support for such recommendations.

River Supplying Water To Alberta Oil Sands Operations At Risk From Drought

A new study casts doubt on the long-term ability of the Athabasca River to supply the water Alberta’s oil sands industry relies on.

Water is allocated to oil sands operations based on river flow data collected since the 1950s, but that doesn’t necessarily represent an accurate assessment of the Athabasca River’s flow variability over the longer term, according to a report published this week in the Proceedings of the National Academy of Sciences.

Andrew Nikiforuk’s Latest on the Fracking Craze should be Required Reading for MLAs

This is a guest post by Ben Parfitt, resource policy analyst with the Canadian Centre for Policy Alternatives. It orginially appeared on

Well, I won’t back down
No, I won’t back down
You can stand me up at the gates of hell
But I won’t back down

— Jeff Lynne, Tom Petty

In the mid 1960s, the world’s two superpowers hit on a novel idea to try to coax more oil and natural gas from the ground. In what they hoped would prompt the release of “endless fountains of fossil fuels,” first the Union of Soviet Socialist Republics and then the United States of America detonated nuclear bombs belowground.

The hoped-for geysers of fuel never materialized. Instead, nearby oil and gas wells became contaminated with radioactive gases that in some cases later broke to the surface and swept over the homes of unsuspecting residents. Groundwater was polluted. And giant subterranean craters filled with cancer-inducing gases that no public power utility in its right mind would touch.

Half of Albertans Think Oilsands are Large Enough, Majority Want Stronger Climate Policies, According to New Poll

A poll of more than 1,800 Albertans conducted by EKOS Research Associates shows more than half the population wants the province to take stronger climate action by introducing policies that limit carbon emissions.

The poll, commissioned by the Pembina Institute, also found 50 per cent of Albertans are in support of a broad price on carbon that would apply to both consumers and producers. Support for a price on carbon jumped by another 10 to 20 per cent if the money generated from the tax were to go towards carbon reducing technologies or projects.

Results also show a large portion of Albertans (66 per cent) want to diversify the province’s economy rather than up the competitiveness of the oil and gas industry (29 per cent). Forty-eight per cent of Albertans who took the poll said they feel the oilsands are large enough or should be downsized.

It’s encouraging to see such strong support among Albertans for action on climate change,” Simon Dyer, Alberta regional director for the Pembina Institute, said.

This poll shows that the public is open to many of the solutions being considered, such as an economy-wide price on carbon pollution, or phasing out coal power and replacing it with renewables.”

Celebrities and the Oilsands: Help or Hindrance?

By now, it’s an almost entirely predictable routine: a celebrity takes a tour of the Alberta oilsands for a day or two and quickly harnesses apocalyptic rhetoric in press conferences to detail the experience. Chagrined industry spokespeople lash out. News coverage dissipates after a few days. Rinse and repeat. Thus far, Neve Campbell, Leonardo DiCaprio, Darren Aronofsky, Desmond Tutu and James Cameron have partaken in the ritual.

Now, at long last, we can add Bill Nye to the already stacked roster, thanks to his recent two-day stint in the area for a climate change documentary he’s working on.

Producing all this oil that’s producing all this carbon dioxide, that’s not good from a global stand point,” the Science Guy said in an interview with the Aboriginal Peoples Television Network, which was tweeted by the likes of Bill McKibben and

Nye’s statement is very true. Alberta’s oilsands represent fossil fuel development on an unprecedented and highly visible scale. Canada won’t meet its 2020 emissions reduction targets as a result of the growing sector (by that year, the oilsands are expected to churn more carbon dioxide into the atmosphere annually than all the passenger transport in the country).

But do celebrity visits help push the dialogue out of gridlock?

Alarming Levels of Air Pollution Identified Across Alberta, Fossil Fuels the Culprit

alberta air quality, pollution, fossil fuels

The results of a new national air quality survey released Wednesday shows levels of fine particulate pollution and ozone exposure in Red Deer, Alta., exceed safe standards. And four of the province's six air zones, including the Upper and Lower Athabasca and North and South Saskatchewan, all home to major oil and gas projects, are fast approaching those limits, according to the province.

Shannon Phillips, Alberta Minister of Environment and Parks, said the results of the air quality assessment are “concerning.”

We can’t keep going down the same path and expecting a different result. Our government has a responsibility to protect the health of Albertans by ensuring air pollution from all sources is addressed. Without action, Alberta is on track to have the worst air quality in Canada in the coming years.”

The province announced it will immediately work to implement plans developed under the Canadian Air Zone Management Framework and is considering tougher regulations for the oil and gas industry as well as for vehicles. Increased air monitoring initiatives are also being considered.

Elizabeth May’s Call for an 'Energy Efficiency Army' Makes All the Sense for a Stagnating Alberta

Frankly, we need an army of carpenters, electricians and contractors going out to plug leaky buildings,” federal Green Party leader Elizabeth May said during the August 6 leaders debate. “Thirty per cent of carbon pollution comes from the energy we waste and the money we waste heating the outdoors in the winter and cooling it in the summer.”

The suggestion’s an awfully good one. Especially in Alberta.

For one, the thousands of contractors out of work due to the oil price slump could serve as potential soldiers in this so-called army.

There’s also enormous untapped energy-saving potential in Alberta: in fact, it’s the only province or state in North America that doesn’t sport a long-term energy efficiency program — that sure means something when 55 per cent of Calgary’s emissions can be attributed to electricity generation.

Alberta Electricity Provider TransAlta Found Guilty of Market Manipulation, Boosting Case for Decentralizing Generation

Earlier this week, TransAlta — the massive, publicly traded electricity generation company based in Calgary — was found culpable by the Alberta Utilities Commission (AUC) of repeatedly manipulating prices in 2010 and 2011 by intentionally shutting down power plants during peak demand to boost costs for consumers.

The Market Surveillance Administrator estimates the actions — which boosted costs by between 10 and 60 per cent depending on occurrence — made the company $16 million.

TransAlta has denied all claims and floated the idea of taking the case to the Alberta Court of Appeals.

Such a situation once again raises questions about the appropriateness of a deregulated electricity market, a feature Alberta has uniquely sported since 2001.


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