Canada’s about-face on climate

Introduction

Montreal — When world leaders met on Sept. 22 at the United Nations headquarters in New York for a critical summit on climate change, one head of state of a major oil-producing country notably declined to speak and generally appeared to be missing in action.

While the United States’ Barack Obama, China’s Hu Jintao, and Japan’s Yukio Hatoyama seized the stage, Canada’s Prime Minister Stephen Harper made only a brief stop and was soon back home, at a media event in suburban Ontario. There, in the town of Oakville, he declared that his corporate tax cuts had successfully lured back from the U.S. the headquarters of the giant Tim Hortons donut franchise. For the moment anyway, global warming could wait. It was time to bite into a double-glazed.

For Canadians, Harper’s lack of interest in the U.N. summit was unremarkable. His policies are firmly rooted in the deep conservative politics of Alberta, the oil-rich western province that is home to many of Canada’s most ardent climate change deniers, some of whom are Harper’s closest allies. These include Harper adviser and University of Calgary political scientist Barry Cooper as well as the Calgary-based denier organization The Friends of Science. Canadians recall a 2002 fundraising letter in which Harper launched an attack on “the job-killing, economy-destroying Kyoto Accord,” referring to the 1997 treaty that tried to put controls on carbon emissions. He called the treaty “essentially a socialist scheme to suck money out of wealth-producing nations.” And along with his cabinet members, he has made reference to “so-called greenhouse gases” and the “hypothesis” of climate change.

Since Harper became prime minister in 2006, his message has consistently been that action on global warming cannot stand in the way of Canada’s economic growth, that the terms of the Kyoto agreement are economically irresponsible, and that Canada could act in concert with the United States. He has maintained that position despite a recent report, sponsored by one of Canada’s largest banks, which concluded that meeting Canada’s Kyoto commitments would not significantly harm the economy.

Shaped by oil-rich Alberta, Harper’s position represents a stunning about-face in Canada’s policy on climate change. It is a shift environmentalists and other critics attribute to the legions of lobbyists who represent the big industrial greenhouse gas emitters that for years have struggled to weaken Canadian climate change legislation.

Before Harper’s Conservative Party won a minority government in 2006, Canada had been at the forefront of multi-national negotiations toward a renewal of the Kyoto Protocol beginning after 2012. A team of more than 100 Canadian government bureaucrats organized the successful negotiations in Montreal in 2005 that opened the road to Copenhagen, where delegates from around the world will gather to work out a new treaty. According to former Environment Minister Stéphane Dion as well as a senior environment department official, the former Liberal government had planned to set aside $250 million to help organize future climate change negotiations to maintain the momentum created by Montreal and leading up to Copenhagen. “The idea was to keep this marvelous team of people engaged,” said a senior Canadian official. “And the idea was to be in the driving seat for getting to the new agreement.”

At the same time, the previous Liberal government was putting in place new legislation designed to meet Canada’s commitments under Kyoto by 2012. Then came the 2006 election. Whacked by a corruption scandal, the Liberals lost to the Conservative Party which brought a more skeptical eye to the entire climate change file. “The Conservatives came and just canceled all that,” said the official. Harper “scattered the 100 employees of the climate change secretariat and erased their database. All that historical knowledge is gone.” The new prime minister slashed the environment budget by 10 percent, erased the government’s climate change website (later replaced by a stripped down version) and announced that Canada would not be able to fulfill its Kyoto Protocol commitments. Harper’s government then presented legislation — called “Turning the Corner” — that would greatly reduced the country’s emission-reduction obligations.

The opposition parties have proposed legislation forcing the government to make much deeper cuts of 25 per cent below 1990 levels by 2020 — eight times what the government had proposed — and they are threatening to defeat the Harper plan, which could force an election.

Ottawa’s 1,570 Climate Lobbyists

The battle over climate change in Canada largely pits environmental groups against a powerful coalition of energy companies, along with academic climate-change skeptics and deniers who support the Harper Conservatives. The lobbyists hired by these groups are among the largest special interest groups on Parliament Hill, an ICIJ analysis of the Canadian lobby registry shows. They lobby not only to shape legislation in an industry’s favor, but also to ensure that those industries benefit from the billions of dollars in government grants being issued for clean energy and emissions-reduction projects. The analysis found that 1,570 climate change lobbyists have pounded the halls of Parliament since 1996. Their client list has steadily increased since that year from just 13 to 109.

Oil and gas producers comprise the largest industry lobbying group from January through August 2009, based on the number of clients who paid for lobbyists. But other major producers of fossil fuels, such as mining firms and coal companies, have also lobbied on climate change legislation. Combined, all these groups have employed about 465 lobbyists since 1996.

Industry pressure on politicians is unrelenting, according to Stéphane Dion, who was the environment minister in the former Liberal government from 2004 to 2006. “It’s almost daily,” he says. “They say, ‘What can we do? There is no technology possible [for emission cuts]. Can you exempt us? Please.’ This kind of pressure [is] always, everywhere.”

Despite 20 years of international climate change negotiations, during which Canada signed the Kyoto Protocol (1998) and ratified it (2002), the nation has yet to take any measurable action to curb greenhouse gas emissions, scientists say. It still has no regulatory framework in place, and it has failed to meet its Kyoto commitment. The Kyoto agreement requires Canada to reduce its emissions by six percent of 1990 levels by 2012. But by 2007, the country’s emissions had risen 26 percent to 747 million metric tons. By contrast, Europe has met its commitments and has imposed emission regulations on industry for years.

The Alberta Issue

Canada’s emissions problem is not nationwide. It is essentially generated by one province — Alberta — and by one culprit: tar sands. This massive deposit of tar-like, oil-laden sand, lying under an area larger than the state of Florida, represents the world’s second largest oil reserve. The potential contribution of the sands to global warming is enormous — depending on the type and efficiency of the extraction process, as well as other variables such as forest destruction and emissions from tailings ponds.

All told, removing the tar-like bitumen from the sands, along with its upgrading and refining into synthetic oil, emits more greenhouse gases than conventional oil. The exact number, however, varies and often seems to depend on who is fronting the study with government and the oil industry downplaying emissions. A 2009 study by the Alberta Energy Research Institute — an Alberta government organization — puts the figure at anywhere from zero to 45 percent greater than conventional oil. But scientists on the advisory committee of that study have not supported its conclusions, claiming bias because it is heavily weighted towards a comparison with production of conventional dirty fuels. Other studies, such as a Pembina report of 2005, claim the greenhouse gas emissions from tar sands are about three times more than conventional oil. Whatever the precise number, the fact remains that tar sands annually pump about 36 million metric tons of greenhouse gases into the atmosphere, or about five percent of Canada’s total emissions. And these emissions are expected to triple if current expansion plans are realized.

Over the last decade, tax breaks and new technologies have opened the tar sands to extensive exploitation. Projects worth more than $100 billion have spread like fire throughout the northern Athabasca region, destroying vast swaths of Alberta’s boreal forest — one of the world’s great carbon sinks — as they tear away the land to get at the rich, black substance below. Proof of their value belches through the refinery and upgrader stacks that crowd the open pit mines of northern Alberta and flows through an expanding pipeline network that leads south to the United States, supplying almost five percent of America’s crude oil needs, where the oil is further refined.

Although it is home to just 10 percent of Canada’s 33 million people, Alberta is responsible for about 70 percent of the country’s oil production. With its refineries, gas flaring, coal-fired power plants, and tar sands processing, the province spews out one-third of Canada’s greenhouse gases. That figure is expected to rise as high as 50 percent by 2025 as emissions from mining, oil and gas extraction, and refining increase substantially. One tailings pond — the so-called Mildred Lake pond — produces the equivalent in methane of half a million head of cattle per day. Indeed, from 2004 to 2007 alone Alberta’s emissions from fossil fuel extraction increased 57 percent “largely due to increased activity in the Alberta oil sands,” says Canada’s 2009 National Inventory Report on greenhouse gases. Since 1990, emissions from Alberta’s mining oil sands plus oil and gas extraction increased more than 600 percent. And only 3.6 percent of the oil sands region has been tapped.

The greenhouse gas emissions from just one tar sands company — Suncor Energy Inc. — rival those of some industrialized countries. From 1990 to 2007, Suncor’s emissions rose from 4.8 million tons to 11.5 million tons. Its 2007 emissions alone were the equivalent of 28 percent of the emissions from all the cars in Canada and exceeded the entire greenhouse gas output of the nation’s cement industry, itself among the largest emitters. In its 2008 Climate Change Report, Suncor predicted that by 2012, its emissions will more than double to 25 million tons. That would equal about half the emissions produced by Sweden or Switzerland. Said one federal environmental official, who did not want to be named: “No government in Canada has ever gotten in the way of the oil industry. … You can reduce emissions in one area of the economy, but they will just be wiped out by the addition of a tar sands project.”

Canada’s constitution makes energy primarily the responsibility of the provinces, and that power is one that Albertans jealously guard. With the Conservative Party powerbase firmly planted in Alberta, where it controls 27 of 28 federal ridings (electoral constituencies), Canada’s biggest oil producer so far has controlled the climate change agenda on the national level. Helping to make sure that it does is a vast number of in-house and consulting lobbyists, all working for energy companies and fighting to assure that climate change legislation does not hamper the growth of the tar sands industry.

Mark Rudolph, a 20-year veteran lobbyist who represents Suncor Energy Inc. and Shell Canada Ltd., said that lobbying in the provincial capital of Alberta is virtually unnecessary since, he said, the government is entirely on the industry’s side. Alberta, in effect, represents the single most powerful lobby in Ottawa, according to Rudolph. “The [Alberta] government … takes somewhat of the same point of view as the denialist companies,” he said. “And they basically say to the feds – despite the fact that they are political brethren and the majority of the cabinet is from Alberta – ‘back off. This is our domain. Don’t bother us.’”

This leave-us-alone attitude was underscored last month when the CEO of one of Canada’s largest oil sands owner, the Canadian Oil Sands Trust, toured Canada with the message that oil sands companies should not have to decrease their greenhouse gas emissions. Marcel Coutu told reporters that the oil sands is a growth industry and nothing should be allow to get in its way. “What we have to do is prioritize what is most important to the economy and our quality of life,” he said. “At the end of the day I don’t think there is a single element of our economy that is more important than energy.”

Industry’s Easy Access

Federal lobbyist records show that corporate oil executives have frequent access to the highest officials in Ottawa. From July 2008 to August 2009, for instance, Richard George, president of Suncor Energy, listed 48 meetingsbetween senior government officials and Suncor executives. During that time Suncor officials met seven times with Environment Minister Jim Prentice. They also had one meeting with Harper and eight meetings with Gary Lunn and Lisa Raitt, who at the time were ministers of Natural Resources Canada, which plays a major role in the climate change issue.

Environmental groups, although they also have access to government officials, are rarely taken seriously and often dismissed as “leftists,” says Mark Lutes of the World Wildlife Fund Canada. Dale Marshall of the David Suzuki Foundation, a longstanding Canadian environmental organization, said that while the foundation’s members have had “reasonably good access” to Canada’s climate change negotiator during U.N. climate change talks, “the last time an environmental group met with Harper was when he was leader of the opposition.” Between July 2008 and August 2009, Suzuki Foundation representatives met 11 times with chief negotiator Michael Martin at UN meetings in Ghana and Poland. They also met three times with Environment Minister Jim Prentice. Marshall said that environmental groups usually get access only by joining a business group, such as a sustainable energy association. “I’m more concerned not about access but about influence,” he said. “The government’s position hasn’t shifted.”

Including Suncor’s own in-house lobbyists, there have been 56 lobbyists registered to lobby for Suncor since 1997. The tar sands company has 12 active in-house lobbyists that spend more than 20 percent of their time lobbying Ottawa, according to the federal lobby registry. In addition, Suncor retains six registered consulting lobbyists to represent its interests in Climate Change issues in Ottawa. Among those six, four have previously worked as senior policy advisors to the government.

One of those is Ken Boessenkool, a lobbyist with GCI Group Canada, a Toronto-based consultancy with longstanding ties to Harper’s Conservative Party. Boessenkool is considered one of Harper’s closest associates. He has served as a campaign adviser and a senior policy advisor to Harper when he was leader of the Opposition. Boessenkool lobbied for Suncor from May 15 to August 15 targeting government ministries such as Environment Canada and Natural Resources Canada, members of the House of Commons, the Prime Minister’s Office, and the Privy Council Office, according to the Canadian lobby registry. His main responsibility on behalf of the company was “climate change policy with respect to developing a carbon market in Canada as this affects the oil and gas operations of Suncor Energy Inc,” according to the registry.

Boessenkool declined to comment on his lobbying for Suncor. “I do not discuss my clients,” he said.

Common Ground?

Suncor lobbyist Rudolph worked as chief of staff to the federal minister of the environment from 1983 to 1984. He now represents Suncor on legislation regarding greenhouse gas emission regulations. He also represents theClean Air Renewable Energy Coalition, an organization he founded in 2000. The group is a coalition of big oil companies, such as Suncor, ConocoPhillips Canada, Enbridge Inc., and Shell Canada Limited, along with renewable energy companies and several NGOs, including the World Wildlife Fund Canada and Friends of the Earth. Rudolph said he founded the coalition to try to find common ground among the disparate interests of the climate change debate. He said some oil companies, including Suncor, have come to accept the science of climate change and have broken away from the traditional oil patch stance of “bitch, moan and whine” as represented by the Canadian Association of Petroleum Producers.

“They want to work with environmentalists to find a solution,” Rudolph noted. “They said, ‘Look, our corporate and environmental credibility is at stake. You don’t want these schmucks to speak for us. We’ll speak for ourselves.’ So there are those dynamics happening big time. In my opinion that is the new way of doing things.”

Suncor, however, maintains a foothold in both camps. It is still part of the hard-line Canadian Association of Petroleum Producers (CAPP), which has lobbied heavily to undermine climate change legislation, critics say. “CAPP is the classic bottom feeder satisfying the lowest common denominator-type messaging that comes out when it comes to oil sands, climate change, and what they are doing,” Rudolph said. His thoughts are echoed by the senior government source: “At the end of the day, you get more or less with CAPP the lowest common denominator. Lower, let’s be fair. But there is the unspoken link, where the oil executive can call [the prime minister] directly and say, ‘You don’t do this or else you will suffer.’ We’ll beat you in your riding type of thing.”

While CAPP employs Ottawa-based Global Public Affairs and its eight lobbyists, it also has registered 42 of its own employees as federal lobbyists. Of the total 51 active lobbyists registered by CAPP, 17 previously worked for the government. These include one who was a senior aide to Prime Minister Harper when he was leader of the opposition. Six others previously worked for the National Energy Board and three others worked for National Resources Canada.

The record shows that CAPP has enjoyed access to the highest officials in the Canadian federal bureaucracy. CAPP president David Collyer, a former director of the National Energy Board, for example, met 95 times between August 2008 and October 2009 with some of Canada’s top civil servants and politicians involved in the energy and climate change files. These included two meetings with Canada’s chief climate change negotiator Michael Martin, as well as meetings with the ministers for the environment and National Resources Canada, their deputies, and the nation’s top bureaucrat, Wayne Wouters, clerk of the Privy Council.

In an email, Martin said that his meetings with CAPP are among “several meetings” he and Environment Minister Jim Prentice have held with various stakeholders on climate change. “The main objective for all stakeholder meetings has been to provide an update on the U.N. climate change negotiations and to gain a great understanding of the views of stakeholders in advance of the Copenhagen conference,” he said.

Martin and members of his staff have also met three times with Shell Oil executives over the last year. Shell has also met seven times with Prentice, according to the lobby registry. Imperial Oil, a subsidiary of ExxonMobil, has had 11 meetings with Prentice and one with Harper. In addition, Global Public Affairs lobbyist Tim Kennedy, who from 2000 to 2002 worked for the Alliance Party, which later became the Conservative Party, met seven times from March 25 to October 7 with senior advisers to Harper to discuss environmental and energy issues on behalf of CAPP. Kennedy also lobbies for Shell and Imperial Oil.

As did most of the oil lobbyists, Kennedy did not respond to requests for an interview.

Suncor also acts through the International Institute for Sustainable Development, whose head office is in Winnipeg. The institute, which is not a lobbying organization, arranges meetings with Canada’s chief climate negotiator, government officials, and big oil to discuss climate change negotiations. The group’s climate change director, John Drexhage, is a former senior bureaucrat in the federal environment department and was part of Canada’s negotiating team under the Liberal government. He said he attends all climate change negotiations and reports on their progress to his clients, which include Spectra Energy Corp., Enbridge, and Suncor.

Drexhage adds that he also works with environmental groups, informing them about negotiations. He said he thinks companies like Shell and Suncor are more progressive than most other oil companies in their acceptance of climate change regulations. “Many of the others … have had a much more difficult time of it,” he said. “You had Gwyn Morgan, who was the CEO of [oil, gas, and tar sands company] Encana, characterize the discussions around cap and trade as ‘an encroaching cancer on the Canadian economy’ in a public letter he sent to the prime minister. There was, and there continues to be, frankly, a lot of opposition.”

Lobbying for Carbon Capture

Lining up for government grants to reduce their greenhouse gas emissions has become the latest job for lobbyists not only in Ottawa, but also in the provinces. The ICIJ database analysis indicates that from 2005 to August 2009, Canadian governments handed out at least $96 million in various subsidies, including clean energy projects, to oil and gas companies that lobby on climate change

In 2007, Canada’s major oil companies, along with some other energy related businesses, created the Integrated CO2 Network (ICO2N). It lobbies for “a proposed carbon capture and storage system for Canada.” With offices at Suncor headquarters in Calgary, it has six lobbyists, including three who had been senior policy advisors to Harper. The main aim of the network, which includes two major coal utilities, is to secure financing for carbon capture.

That lobbying recently paid off. In October, Harper joined Alberta Premier Ed Stelmach in announcing grants totaling $1.6 billion to finance two projects to capture and store carbon from two coal-fired power plants owned by two members of the ICO2N: Shell Energy and Transalta Corporation.

ICO2N’s website says carbon capture and storage could reduce Canada’s CO2 emissions by 20 million tons, or 2.6 percent. But the expected cost of such a nationwide push — about $16 billion — suggests how far Canada still has to go, say environmentalists. The effort would fail to capture the carbon equivalent of projected emissions from even one tar sands company like Suncor.

William Marsden is an investigative reporter with The Gazette in Montreal, Quebec. Data analysis on this story was performed by M.B. Pell, with the assistance of Aaron Mehta.