“Crude futures hovered around $47 a barrel Friday on data from the International Energy Agency estimating that global oil usage for this year would rise by about 80,000 barrels daily ….” — Associated Press, February 11, 2005 (five days prior to February 16, implementation date of the Kyoto Protocol).
After more than a decade of international climate treaty negotiations, the Kyoto Protocol goes into effect today. But while February 16 is being hailed as a turning point by certain environmentalists, in the petroleum world the derricks churn on with utter indifference.
Kyoto will oblige developed countries (minus the non-participating U.S. and Australia) to achieve an overall 5.2 per cent (six per cent for Canada) reduction in greenhouse gas (GHG) emissions over the period of 2008-12, a modest first step prior to a second phase in which emissions will be more drastically cut. A great variety of ways have been suggested for reaching these targets — with one notable exception: no one ever breathes a word about cutting petroleum production. Or coal production. Or natural gas production. Those charged with implementing Kyoto pretend to be incapable of making the connection between fossil fuel extraction and its eventual consumption.
The Canadian experience makes this painfully evident. In the 2003 budget, shortly after the government ratified Kyoto, $1 billion was allocated to Kyoto initiatives. Meanwhile, larger sums — approximately $1.5 billion annually according to the Pembina Institute — are routinely injected into the oil and gas industry in the form of federal tax breaks and subsidies.
Last fall, Environment Minister StÃ©phane Dion kicked off his term with a speech before the Calgary Chamber of Commerce (September 10, 2004) which focussed, in part, on Kyoto. Dion’s cocktail of solutions featured special emphasis on “carbon dioxide sequestration,” a technology in which carbon dioxide is disposed of by pressure-pumping it down old oil wells or into coal seams.
The part he didn’t mention was that while, yes, some CO2 gets disposed of, the primary goal of this process is to generate further extraction of oil (or methane in the case of a coal seam) in quantities well beyond the limits of more conventional pumping methods. Perhaps StÃ©phane Dion regards this as simply irrelevant. After all, in the very same speech in which he championed Kyoto, he announced how “Alberta could soon be the second-largest oil-exporting jurisdiction on Earth, behind Saudi Arabia. This is a tremendous blessing for Canada…. ”
Is it any surprise, in this miasma of denial, that Canada’s efforts at Kyoto compliance have been completely fruitless? From 1990-1997, the period from the Kyoto baseline date to the beginning of Canada’s first Kyoto initiative funding, Canada’s GHG emissions went from 609 to 682 megatonnes, a increase of 73 megatonnes. Since then, Canada allocated $3.7 billion for Kyoto initiatives, and six years later (by 2003), Canada’s emissions had increased by another 71 megatonnes.
In other words, Kyoto funding has thus far served to produce no perceptible effect on the continuing rise in GHG emissions. It has, however, served to justify some very generous subsidies to corporate research and development initiatives — subsidies which, in the coming years, are likely to grow.
The ushering in of the Kyoto Protocol now presents expanded opportunities for corporations involved in overseas development. Whereas Canada is supposed to decrease its GHG emissions to six per cent below 1990 levels by 2008-2012, developing countries are exempt from obligation, and thanks to provisions for “emission credits trading,” “clean development mechanisms” (CDMs), and “carbon sinks,” there are plenty of loopholes which invite wheeling and dealing.
Prime Minister Paul Martin and other developed country leaders have made it clear in recent weeks that CDMs, in which developed nations receive credits for financing “environmentally-friendly” development projects in developing countries, are destined to be the loophole of choice. Finland and the Netherlands have already registered projects (in Honduras and Brazil respectively), and Japan, Canada and Italy have pending submissions. Most of these projects will take the form of hydroelectric dam construction or the recovery and combustion of landfill gas.
The big problem with these projects is that there is no real link to overall reductions in GHG emissions. If the power from a hydroelectric dam is used to feed a factory producing automobiles, in the final analysis the result is more GHG emissions, not less. Were there a real drive to build economies on large scale alternative energy, this all might make sense, but even our environment minister tells us that this will not happen. “The world will need oil and gas more than ever, with the rise of new energy-hungry mega economies,” StÃ©phane Dion said in his speech last September. He went on to suggest that Canada could help by supplying those fossil fuels.
It has always been evident that to slow global warming, the best way would be to go to the root of the problem and to put the brakes on fossil fuel extraction. It has always been equally evident that at a global level the power does not exist to do this. The compromise solution is to regulate consumption and to hope that reduced extraction will follow. Whether this solution has any hope of working depends largely on whether it is implemented in good faith by the participating parties.
Looking back on Canada’s Kyoto record so far, the prospects are bleak.