The EconomistJuly 27th 2019 Special reportCanada 92 where we turn we’ve been blocked in and
turned down,” says Mr Kenney. He says
many feel the “prairie alienation” that has
long been a feature of locals’ attitudes to
elites back east. According to a poll in Feb-
ruary, half of Albertans see separation from
Canada as a possibility.
Mr Trudeau’s backing of the Trans
Mountain expansion is unlikely to change
their minds. He “killed” two other pipeline
projects, Northern Gateway (across British
Columbia) and Energy East (which would
have gone through Quebec), Mr Kenney
notes, and “surrendered” to Mr Obama’s
veto of a third, Keystone xl.
Just as irksome are two environmental
bills backed by the federal government—
one overhauling the process for approving
big infrastructure projects, the other a ban
on coastal tanker traffic—which look to
many Albertans like part of the broader
conspiracy to keep the province’s oil sands
poorly connected.
Locals insist that the stigma borne by
their oil is unwarranted. The view that it is
more damaging to the atmosphere to ex-
tract is becoming outdated, says Peter Tert-
zakian, director of arcEnergy Research In-
stitute in Calgary. The price slump, transport bottlenecks and
pressure from activists have forced oil firms to cut costs and emis-
sions. “When you have the lowest commodity prices in the world
you get clever very fast,” he says.
Where you been so long?
Cenovus, a Calgary-based oil producer, has reduced the green-
house-gas intensity of its production by a third, says its chief exec-
utive, Alex Pourbaix. It now matches the American refined aver-
age, and at some sites it is lower. Besides, extraction accounts for
only a small fraction of emissions associated with each barrel of
oil; 70-80% occur when the customer burns it. Albertans wonder
why oil from countries with less regard than Canada for human
rights and environmental good conduct attracts less opprobrium.
“The effort is focused on Canada because we have the reputation as
the world’s boy scouts,” says Mr Pourbaix ruefully.
By scrapping the carbon tax brought in by his predecessor, Mr
Kenney has made it harder to claim that Albertans are environ-
mental boy scouts. He has hitched Alberta
to a national campaign against Mr Tru-
deau’s climate policy, waged in the name of
“affordability”. Ontario’s government has
told petrol stations to put stickers on their
pumps reading, “The federal carbon tax
will cost you.”
The government’s scheme was de-
signed to resist such attacks. Provinces
with their own carbon-pricing schemes
can keep them. British Columbia, which
began taxing emissions in 2008, and Que-
bec, which has a cap-and-trade system,
have done so. The national scheme is only
imposed on provinces that reject carbon
pricing or whose schemes fall short of fed-
eral standards. It sets a price floor of C$20 a
tonne this year, rising to C$50 by 2022. All
the money goes back to the province whereit is raised; 90% of that goes to taxpayers. In Ontario, a family of
four will get back C$307 this year. “It’s a small-cconservative ap-
proach,” says Catherine McKenna, the environment minister.
The carbon-pricing scheme plus other measures, such as “the
toughest methane regulations for oil and gas in the world”, will en-
sure that Canada meets its emission-reduction targets, Ms McKen-
na insists. Others say that will require more action. To achieve the
target mainly through the carbon tax, the price would need to be
C$125-175 by 2030, believes Chris Ragan of the Ecofiscal Commis-
sion, a think-tank. “When people say, ‘We can’t have a carbon price
that high,’ I say, ‘Why can’t we have income taxes that low?’ ”
The decision to expand Trans Mountain could provoke more
protests at Burnaby. Alone it will not solve Alberta’s problem. An-
other pipeline is needed to free producers from factoring the cost
of rail transport into prices, says Trevor Tombe of the University of
Calgary. The likeliest option is one called Line 3 to Minnesota,
which exists but needs replacement. Opposition to that comes
mainly from America. Alberta will seethe, but it is unlikely to se-
cede. “Canada exists to try to address some
of these challenges,” says Mr Tombe.
Although Mr Trudeau has lost recent
battles, he could yet win the war. Canada is
warming twice as fast as the rest of the
world. Voters are starting to notice. The
country is already getting rainier, and thus
more vulnerable to flooding. Mr Kenney
cancelled an event at a petrol station on
May 30th to tout the repeal of the carbon
tax because wildfires were raging near Ed-
monton, Alberta’s capital.
Nearly 80% of Canadians think pollu-
tion pricing should be among the tools
their government employs to fight climate
change, according to a recent poll by Aba-
cus Data. In the election, it may be that cli-
mate alarm will count for more than affor-
dability anxiety. 7Put that in your pipelineSource: “Global carbon intensity of crude
oil production”, by Masnadi et al.,
Policy Forum, 2018 *Volume-weighted averageGreenhouse-gas intensity of crude-oil production,
transportation and refining*, selected countries
2015, grams of CO2 equivalent per megajoule0 5 10 15 20 25 30IraqVenezuelaRussiaCanada
IranUnited StatesSaudi ArabiaConfidence interval5th percentile 95thOil on canvas