On June 20^th, CBC News featured a story on what they called Canada’s exported emissions. The gist of the story is captured nicely in the first sentence of their story – “While Canada claims to be a climate leader, the oil and gas we export to other countries have the potential to produce more emissions in a year than every sector in Canada combined, an independent analysis reveals.” My BS radar immediately went into high gear, and I set out to evaluate the question of whether we’re a bunch of hypocritical capitalists here in Canada.

My first question was “what is the source of this “independent analysis”? The answer is that the study was produced by the Pembina Institute. And who, you ask, are they?

The Pembina Institute was formed in 1981 in Alberta in response to “a sour gas accident which killed two people and polluted the air for weeks” (Wikipedia). It has grown and changed with time and they now refer to themselves as “an oil sands industry watchdog”. If you listen carefully, you can hear just a trace of hostility to the oil and gas industry in that description. They have five offices across Canada, and some 55 staff members. I took a look at their 2023 audited financial statement. They had total revenue of $8.3M, of which $6.1M came from grants. So, at a quick glance, about three quarters of their funding comes from the public purse. 

Starting in 2017 the institute has received more than 40 grants from the federal government alone totalling close to 12 million dollars. They have also been commissioned by provincial and territorial governments to write reports on environmental issues and help develop government policies on climate action.

There’s nothing wrong with all that. But it’s just worth noting that this “independent analysis” is in reality the product of a Federal Government proxy organization whose raison d’etre seems to be to help develop and then sell climate action policy.

The report takes a cheap shot at our national image – “We can point to our own climate policies and say we’re doing a really good job in this regard, but if we’re exporting our emissions to other jurisdictions … then that clean-cut image for Canada comes under some scrutiny.” It does acknowledge that Canada is by no means alone in exporting fossil fuels. Given the Institute’s heavy dependence on governments, especially the Federal government, I’m a bit surprised that they feel free to take cheap shots, but perhaps JT is OK with it as a way to build more climate change urgency. 

Statista.com, a data marketing web-site tells us that global energy consumption is approximately 667 exajoules (that’s 667 and a whole lot of zeros). Canada’s share of that is 13.95 exajoules, or about 2%. The Pembina Institute article suggests that we “export” about 32% more emissions than we create at home, and so our exported oil and gas might account for about 2.75% of global emissions. 

         Canada’s energy mix is about 20% non-emitting, compared to about 25% non-emitting in the global mix. That little tweak doesn’t significantly affect the result given above – it’s still under 3%. 

Well, you might say, 3% reduction is important. But what would happen if Canada were to stop exporting oil and gas? Would global energy consumption and concomitant greenhouse gas emissions drop by 3%? Don’t be silly. Energy consumption is a function of two variables – population and per capita energy consumption. Global population is increasing.  And, as under-developed countries try to get more industrialized to increase standards of living for their citizens, their demand for energy increases. Cutting off Canadian exported supply will result only in markets seeking another supplier to meet their steadily increasing needs.

What is the impact of Canada exporting oil? We export to the US from our western provinces, and import from the states in the east. We are by far the biggest supplier of oil and gas to the US, and we are one of their top export destinations. In fact, 98% of our crude oil exports and > 90% of our gas exports go to the United States.

The United States are net exporters of oil. In 2023, the US net exports were about 1.6 million barrels per day (mbpd). The net import from Canada was 3.6 mbpd, meaning that the Americans are burning 2 mbpd of our oil, and marketing 1.6 mbpd. And their biggest customer, surprise surprise, is China, which received 977mbpd, or 60% of the US export market.

The interesting thing about China is that they are by far the world’s largest consumer of coal – they account for 56% of all the coal used in the world. The United States has seen a reduction in coal consumption since 2014, but still use about 6% of the global total consumption. So those two countries combined are burning 62% of the coal used each year.

The nasty thing about coal is that it produces more greenhouse gas than almost every other fuel. Measured in Kg Co2 per million BTU, the average for all types of coal is 96. Heating oil and gasoline are in the low 70’s, and natural gas is about 53. So, the net effect of Canada exporting oil and gas is that we’re reducing the consumption of coal and lowering the global greenhouse gas emissions.

Ah, but if we stopped exporting wouldn’t that impact the price of oil, and force consuming countries to reduce demand? In theory, I suppose, that would happen. But we have about 6% of global production, and we use close to half of that ourselves, so our 3% production is unlikely to have a major impact on the world price for oil. Remember too, that the OPEC countries are collaborating to set production targets and thus manipulating price. So, the bottom line is that we don’t exert a hell of a lot of influence on global oil price and consumption demand.

         And that brings us to the critical questions. What was the point of the Pembina Institute article? And what point am I trying to make?

I have commented before that Canada needs to engage in a much more intelligent and informed debate about climate change than Pierre Polievre’s stupid “axe the tax” mantra. Sadly, the Pembina Institute, operating with taxpayer money, has contributed nothing of value with this article. It’s a factoid – we export more oil than we consume. Great. I’m proud of them for digging up the data. Everything else in their article is spin doctoring. It is bad communication and bad science, in my ever so humble opinion.

And shame on the CBC for giving that report front line news space. The story played on CBC for a single day, and then died, which is a good thing. I claim little credit for seeing that item and going “So what?” Somebody at CBC should have been bright enough to ask the same questions. It was bad journalism to become a megaphone for the Pembina Institute.

The world has a serious climate change problem. Population growth and industrialization will dictate increasing energy demand. In the face of increasing energy demand, there are just two things we can do to cut back emissions. First, we need to increase global reliance on non-emitting technologies – hydroelectricity, nuclear, wind, solar, geothermal. We might urge a Canadian policy of assisting in the development of those sources here and abroad.  That would be a good focus for international support and development funds, wouldn’t it? 

The second approach is to displace high emitting energy sources with lower emitting ones – like burning oil or gas instead of coal. There is no point in abandoning the second approach until the first one has become dominant. 

And we won’t have to worry about agitating to make Canada stop exporting fossil fuels – when the world supply of non-emitting energy sources is big enough, supply and demand will kill our oil sands business. Hard times for our oil industry are foreseeable – we don’t have to leap forward to embrace it at a time when it doesn’t really help the global climate change issue. It’s coming anyway.