Oilsands companies have been taking us for fools, Catherine McKenna writes

This article was written by Catherine McKenna and was published in the Toronto Star on December 7, 2024.

CATHERINE MCKENNA IS A FORMER FEDERAL MINISTER OF ENVIRONMENT AND CLIMATE CHANGE AND INFRASTRUCTURE. SHE IS CEO OF CLIMATE AND NATURE SOLUTIONS AND CHAIR OF THE UNITED NATIONS EXPERT GROUP ON NETZERO.

“ It became increasingly obvious to me that the oilsands sector, along with their cheerleaders in the Alberta government and the federal Conservative party, have no intention of making the fundamental changes required to align with the global shift toward a lowcarbon economy

In May 2016, I was leading intense negotiations between the federal government and the provinces and territories to secure Canada’s first national climate plan. Suddenly, the news was everywhere: wildfires were raging out of control in Alberta, and headed straight for Fort McMurray — the heart of Canada’s oilsands production. The news was devastating: flames jumping rivers, homes and businesses incinerated, and more than 80,000 residents forced to evacuate. Firefighters and other emergency responders did everything they could but were soon outmatched. Fort McMurray would be engulfed — at once causing immense hardship and also showing Canadians the visceral and unpredictable danger of our dependency on fossil fuels.

In that moment, it felt like an unlikely consensus had emerged. The federal government, most provinces and even oilsands companies had seemingly come to understand that Canada had for too long been a laggard on climate and that for both environmental and economic reasons we needed to make meaningful promises on reducing our greenhouse gas emissions and to actually meet them.

In 2015, at COP 21 in Paris, I could already see the world changing as Rachel Notley’s government put forward Alberta’s first credible climate plan. Standing with environmentalists and First Nations leaders, as well as oilsands companies, premier Notley announced a provincial cap on oilsands emissions, a tax on carbon, a phase out of coalfired power and a methanereduction strategy. She was clear that these measures were key to Alberta’s doing its part to tackle climate change while creating the incentive for the oilsands to innovate and be more competitive globally.

Amazingly, the chairman of Canadian Natural Resources Limited, Murray Edwards, spoke enthusiastically on behalf of the oilsands industry at the press conference: “(w)e applaud Premier Notley for giving us … the position of leadership on climate policy.”

Over the next four years, I worked very hard to collaborate with the oilsands sector. I really believed that the environment and the economy could go handinhand and include a vibrant oil and gas sector. I was convinced that we could reduce emissions from the oilsands as part of an ambitious climate plan, finally showing to the world that Canada was committed to meeting our targets and doing our part to tackle the climate crisis.

It turns out the consensus was a mirage. Or, more accurately, a sham. Maybe it shouldn’t have surprised me that our industry partners were working against us from the inside. After all, oil is their business, their bottom line. It was only after I left politics that I came to understand the truth: The oilsands sector and the politicians they sponsor aren’t just greenwashing a product. They are working to brainwash Canadians into buying a version of reality that no longer exists. One where oil will forever be the hero of the Canadian economy rather than an impediment to Canada’s future prosperity in a low carbon, climatesafe world.

Perhaps this sham was never clearer to me than on a Saturday morning in the fall of 2022. I was doing what I always do on weekends, reading the newspaper and enjoying a cup of coffee. But what I saw that morning nearly made me spit out my drink: a fullpage advertisement from the Pathways Alliance, a coalition of the country’s six largest oilsands producers.

The ad boldly claimed that these companies were making “clear strides to netzero” and would “help our country achieve a sustainable future.” Soon, I started seeing a version of this ad everywhere: on my Air Canada flight, on bus shelters, on YouTube, and even during the Super Bowl. Whenever I Googled “net zero,” the Pathways Alliance popped up.

Let’s be clear about the facts. Unlike other sectors in Canada that are reducing their emissions as part of a national effort to decarbonize our economy and become more competitive, emissions from oil and gas are only increasing. This is a massive problem. Oil and gas is by far Canada’s most polluting sector, at 30 per cent of our overall emissions while making up only 1/20th of our GDP. Emissions from the oilsands specifically rose by a whopping 142 per cent since 2005. There is no chance that Canada can live up to our international obligations under the Paris Agreement — the world’s best chance of avoiding catastrophic climate change — without the oilsands finally delivering significant emissions reductions like everyone else.

The irony of this ad campaign was not lost on me. After leaving politics, I was asked by the United Nations secretarygeneral to chair an international expert group to combat greenwashing — companies promoting false solutions to the climate crisis that distract from and delay action. As the secretarygeneral stated, “We cannot afford slow movers, fake movers or any form of greenwashing.” Our report, Integrity Matters, presented at COP 27 in Egypt, established clear global standards for netzero pledges and drew a red line around greenwashing.

And yet, here I was, staring at the Pathways Alliance’s blatant greenwashing campaign.

You would have thought that when the oilsands industry made historic profits over the past few years they would have reinvested that windfall in clean energy solutions. After all, their product is not only carbonintensive, but also expensive to produce. You’d think they’d have seen the need to clean up their act to compete in a lowcarbon future. But you would be wrong. Sure, oilsands companies invested a small fraction of their money in clean technology — enough to say they had — but mostly they chose business as usual, returning the vast majority of their historic profits to shareholders largely outside of Canada, rewarding their CEOs with bonuses of $10 million or more, and ramping up production while increasing their emissions.

Worse still, they continue to demand that governments cough up even more taxpayerfunded subsidies to “clean up” their pollution.

Oilsands companies are taking us for fools.

Only now, and much too late, are they starting to be held to account for their greenwashing. Greenpeace and other environmental groups have called out the Pathways Alliance to the Competition Bureau, which is investigating their misleading claims.

This June, the federal government passed new antigreenwashing rules, which resulted in the Pathways Alliance and oilsands companies preemptively removing their climate claims from their websites and social media. It seems they couldn’t handle the new truth in advertising rules.

I understand how persuasive these companies can be. As environment minister, I bought into the idea that tighter regulations and technological advances like carbon capture and storage (CCS) would allow us to continue developing the oilsands while being serious about climate action. I also believed that working with Alberta to help diversify their economy would require compromise.

Yes, I found the government’s decision to buy the Trans Mountain pipeline a bitter pill to swallow. But I rationalized it by telling myself that it was in the national interest and was the price of bringing Albertans onside with Canada’s climate plan.

Over time I started to have serious doubts, about both the pipeline and our conciliatory approach to the oilsands sector more broadly. They started when I learned that Conser

vative politicians and oilsands companies were spreading rumours that we bought the pipeline in order to kill it. Give me a break. (Today I wish we hadn’t bought it at all. As I watched the $4.5billion purchase price balloon to the $34 billion spent to date, as I came to realize that not only will taxpayer dollars probably never be recouped, but also that Canadians will likely be left with a very expensive stranded asset, I came to regret not pushing back harder.)

It’s also come to light recently that the epic fight led by the Conservatives to kill carbon pricing that I found myself embroiled in, especially online, was supported and significantly underwritten by oil and gas companies. The campaign to discredit carbon pricing by falsely claiming it raised the cost of living — when, in fact, it benefits most Canadians — was amplified by ragefarming outlets, bots and social media algorithms.

It became increasingly obvious to me that the oilsands sector, along with their cheerleaders in the Alberta government and the federal Conservative party, have no intention of making the fundamental changes required to align with the global shift toward a lowcarbon economy.

Unlike Progressive Conservatives like Brian Mulroney, and even recent Conservative leader Erin O’Toole, who understood the need for an economically sound strategy to protect the environment for future generations, today’s Conservative politicians are at war with the very idea of meaningful climate action. Their opposition isn’t scientific or even economic: it is pure ideology.

It was only after I finished my time in government and was able to step back that I could see the balance we were trying to strike couldn’t hold. As painful — and criticized — as the compromises we struck were, I was convinced that in a diverse federation such as ours it was crucial to keep everyone in the tent. But compromise has to go both ways. And you can’t find productive compromise with ideologues hellbent on trying to preserve the status quo while the world moves on.

The sham of cooperation has delivered great fortune to the oilsands and come at a great cost to the rest of us.

The urgency of the climate crisis has never been clearer and at the same time the world is undergoing a rapid transition to clean energy.

Global CO2 emissions are set to hit a record high this year, with the bulk of the emissions from the burning of fossil fuels. The UN’s Emissions Gap Report shows that if we continue on our current path, global temperatures will rise by more than 3 C or more by the end of the century, leading to catastrophic consequences.

This is a particular disaster for Canada, which is warming at nearly twice the global average. We are on track for temperature increases of 5 to 6 C — an unthinkable outcome. Imagine endless summers of boreal fires threatening communities and filling our air with smoke, torrential rainfalls that wash away buildings and cars, punishing heatwaves that kill our most vulnerable, huge chunks of our coastline falling into the sea, an icefree Arctic.

We’ve already seen the devastating impacts of climate change: extreme drought in Alberta, catastrophic wildfires in British Columbia, historic flooding in Eastern Canada and deadly heat waves. In 2023 alone, Canada experienced more than $3 billion in insured losses due to extreme weather events. These are not anomalies — they are the new normal. And they are happening because of our continued reliance on fossil fuels.

The good news is that the world is undergoing a massive trilliondollar clean energy revolution that is quickly reducing our reliance on fossil fuels. The International Energy Agency projects that global oil demand will peak by 2030 largely due to the exponential growth in electric vehicles, as well as the growth in renewable energy and government policies.

China, the world’s largest emitter, has likely already peaked its emissions and is leading the world in renewable energy investment. In fact, China is building the equivalent of a large solar farm every day, and half of all electric vehicles sold globally are now produced there. Meanwhile, the United States, through the Inflation Reduction Act, is investing billions into clean energy solutions, leaving Canada lagging far behind.

The shift to a global “age of electricity,” as the executive director of the International Energy Agency, Fatih Birol, calls it, is a huge opportunity for Canada with our vast natural resources in hydro, solar and wind. Canada also has an opportunity to leverage our manufacturing and technological expertise to meet the demand for clean, efficient technologies. Our vast reserves of critical minerals are essential to new electric vehicles, batteries and renewable energy infrastructure. And then there are the jobs: Clean Energy Canada estimates that by 2030, the clean energy transition could create up to 400,000 new jobs, far surpassing existing positions in the oil and gas sector.

But the energy transition also presents a huge risk to Canada’s economy if we don’t change. With an oversupply of oil driving prices down, the first barrels to go will be those that are the most costly to produce and the most polluting — the oilsands fall into that category. Oilsands defenders tell us that the proposed federal cap on oil and gas will bring nothing but economic ruin. But the opposite is true. Without taking serious action now to decarbonize and invest in the clean transition, it is likely that Canadians will be saddled with billions in stranded oilsands assets, a hugely expensive cleanup operation, lost jobs and devastated communities.

Of course, the Alberta government, federal Conservative politicians and big business lobbyists are already taking the second Trump presidency as proof that, yet again, this isn’t the right time to reduce emissions in the oil and gas sector. That is the exact wrong lesson to take. The fact that Trump is committed to doubling down on fossil fuels in the face of an accelerating climate crisis is all the more reason for Canada to work urgently with likeminded countries committed to climate action. Plus, the world has changed since the first Trump presidency: the global economic landscape has shifted drastically. It’s worth remembering that when Trump was elected the first time, he promised to revive coal in the U.S. But he couldn’t fight the economics of clean energy and his plan went nowhere. Canada’s longterm prosperity hinges on moving away from fossil fuels and shifting to clean energy, regardless of who occupies the White House.

There’s no getting around it: Canada is going to have to change. The market will insist on it. The question is whether we get dragged into the future saddled with stranded assets and unfunded liabilities or whether we lead, working together to make the transition as painless — and lucrative — as possible.

The oilsands sector has been lying to us for years. They are not getting cleaner. They are not part of the solution. As I tell my kids all the time, life is about choices. Canada can choose to be on the right side of history. We can act with the urgency the climate crisis requires and the economic case makes clear. Or, we can double down on the oilsands, abandon the Paris Agreement, ignore the economic opportunities of clean energy and leave our children a deadly and unsustainable future.

Without taking serious action now to decarbonize and invest in the clean transition, it is likely that Canadians will be saddled with billions in stranded oilsands assets, a hugely expensive cleanup operation, lost jobs and devastated communities