B4| REPORTONBUSINESS OTHEGLOBEANDMAIL | SATURDAY,FEBRUARY22,2020
OPINION&ANALYSIS
DILBERTO
n the question of whether
to approve Teck Resources
Ltd.’s Frontier mine, there
may be no good answer – one that
won’t either cause outrage in Al-
berta or infuriate environmental-
ists – available to Prime Minister
Justin Trudeau’s cabinet.
But this is one instance in
which even a bad answer would
be better than no answer at all.
Less than a week from the Feb.
28 deadline for a federal decision
on the massive proposed oil
sands project, punting the ruling
down the road remains a possibil-
ity. Environment Minister Jonath-
an Wilkinson has repeatedly said
that the law under which the pro-
posal is being assessed allows for
a deadline extension, and his of-
fice confirmed late Friday that re-
mains on the table.
There are ways Mr. Trudeau’s
Liberals could justify postpone-
ment. They could suggest they’re
waiting to see whether Jason Ken-
ney’s Albertagovernment com-
mits to legislating emission caps
or targets, or whether the prov-
ince works through tensions with
First Nations chiefs who object to
the project. The latter could tie in-
to a case for avoiding a controver-
sial ruling just as the country is
trying to get through the crisis in-
volving hereditary chiefs’ opposi-
tion to construction of a natural-
gas pipeline in British Columbia.
While those factors can’t be
written off entirely, it would be
hard to see them as anything but
cover for the Liberals’ inability to
work through internal discord on
what to do about Teck. They are
divided on whether they would
rather be accused of hypocrisy on
climate change or jeopardizing
national unity.
Nothing that happens in the
months ahead will prevent one or
the other of those reactions,
whenever the decision comes
down.
What postponing would do,
based on how this issue has
played out so far, is cause the deci-
sion – about a project that may
not happen regardless because of
financing challenges – to keep
taking on outsized stakes. And it
would continue to hijack the na-
tional discourse around how to
reconcile environmental and eco-
nomic imperatives in transition-
ing toward a low-carbon future.
It’s remarkable how quickly
the Teck decision, which has
loomed since a federal-provincialpanel’s qualified approval recom-
mendation last July, has already
become inescapable. As recently
as November, even some people
in leadership roles around Alber-
ta’s energy industry would re-
spond blankly to mentions of it.
Leaders of environmental groups
talked about rolling out cam-
paigns against it heading into
2020, but few gave the impression
it topped their agenda.That it has since become the
most controversial decision fac-
ing Mr. Trudeau’s cabinet is a test-
ament to both sides’ ability to ral-
ly the like-minded. That applies
especially to Mr. Kenney, who rec-
ognized an opportunity to pre-
sent the federalgovernment as
the only thing standing between
Alberta and renewed prosperity.
Placing Teck at the centre of his
messaging, acting as though it’s a
guaranteed source of thousands
of jobs, he has signalled to both
oil-supportive and climate-con-
cerned Canadians that it’s a defin-
itive test of Ottawa’s allegiances.It’s fair game for him to advo-
cate on behalf of Alberta’s indus-
trial interests, particularly be-
cause there are relevant matters
of precedent in play. Albertans
can reasonably worry that if Mr.
Trudeau’s government rejects
Teck on climate-change grounds,
it would be hard-pressed to later
approve other large oil-sands pro-
jects. Conversely, if the Liberals
green-light a 24,000-hectare mine
intended to produce up to
260,000 barrels of oil daily, envi-
ronmentalists could reasonably
question what thegovernment
would say no to.
But the decision, while rele-
vant, does not stand to make or
break the future of Alberta’s oil
sector. If economic circumstances
prove favourable enough that a
green-lit Teck were able to secure
financing to proceed, that would
presumably mean robust invest-
ment in lots of other projects – in-
cluding a slew of smaller ones al-
ready approved. If those aren’t go-
ing forward, Teck is likely a moot
point.
It’s also not going to make or
break Canada’s long-term contri-
bution to the global climate-
change fight, or even where the
oil sands fit into that. Depending
on provincial or federal math, oil
extraction in Alberta currently
accounts for between about 68
and 87 megatonnes of carbon
emissions annually. The Frontier
mine would likely add a signifi-
cant but not game-changing fourmegatonnes to that annual total –
and, again, only if economics
were such that extraction could
be expected to continually rise
elsewhere in Alberta.
Meanwhile, every day that it
drags on, the Teck debate dis-
tracts from othergovernmental
choices that could have greater
bearing on future economic com-
petitiveness and sustainability,
when Mr. Trudeau’s Liberals don’t
have much time to waste.
It’s hard to overstate how
many complex, ambitious poli-
cies Mr. Trudeau’s Liberals have
committed to setting in place be-
fore their minority government’s
uncertain end date – from a new
Clean Fuel Standard, to other
measures to lower emissions
from vehicles and buildings, to
supports for clean technology de-
velopment, to legislating emis-
sions-reductions targets and ac-
countability mechanisms – to
make Canada a leader in the cli-
mate fight.
Mr. Wilkinson is supposed to
be spearheading a good chunk of
that behind the scenes and bring-
ing Canadians along with it.
He’s also Mr. Trudeau’s point
person on the Frontier mine. So
for as long as it’s unresolved,
that’s where he’ll be spending
much of his time and energy.
The decision that’s due is only
going to get more painful, and
more costly, the longer he and his
colleagues stall. It’s time to rip off
the Band-Aid.It’stimeforTrudeautodecideonTeck
There’snogood
decisionontheoilsands
project,butdelaying
willonlyhurtOttawa’s
climateagenda
ADAM
RADWANSKI
OPINION[Thedecisionis]also
notgoingtomakeor
breakCanada’s
long-termcontribution
totheglobalclimate
changefight,oreven
wheretheoilsandsfit
intothat.G
lencore, the world’s big-
gest commodities trader,
had a bad week partly be-
cause the Swiss company’s most
profitable business – coal – is no
longer getting a lot of love
among investors and energy
buyers. The grubby, planet-
warming fuel is far from dead
but, mercifully, the date for
“peak coal” may finally be within
reach.
Glencore is both a mining and
trading powerhouse. In Canada,
it owns the old Falconbridge
nickel miner and controls the
country’s biggest grain handler,
Viterra. It was coal, combined
with a predatory acquisitions
strategy, that propelled Glencore
to its fearsome heights. Today, it
is the top producer and exporter
of thermal coal (the coal burned
in electricity plants) and makes
fortunes from it. In 2019, almost
a third of Glencore’s EBITDA –
earnings before interest, taxes,
depreciation and amortization –
came from coal.
But the world is beginning to
conspire against coal. Carbon
taxes are rising and coal prices
are falling, largely because of the
glut of liquefied natural gas
(LNG), a competing fuel with a
lower carbon footprint. On Tues-
day, when it published last year’s
results, Glencore revealed a
goodwill impairment charge of
almost US$1-billion on its Col-
ombian coal operations. That
writeoff, combined with US$1.8-
billion in goodwill charges else-
where, left Glencore with a net
loss of US$400-million. The
shares fell; in the past year, the
company has lost a quarter of its
stock market value.
Some investors and analysts
think it’s time for Glencore and
other big mining houses to ditch
their coal assets by selling them
or spinning them off into sepa-
rate businesses. They should. If
they don’t, they risk being black-
listed by the ever-larger groups
of investors whose buying and
selling decisions are based on
environmental, social and gov-
ernance (ESG) concerns. Coal is
an automatic minus on any ESG
list.
Coal powered the industrial
revolution and continues to
power the industrial rise of Chi-
na, which is still building more
coal plants than it is mothball-
ing, ensuring an overall rise in
the global coal fleet. That’s the
bad news; the good news is that
the coal era is coming to an end.
As the price of renewable energy
and gas continues to fall, and as
pressure mounts on countries
that signed the 2015 Paris climate
agreement to cut carbon emis-
sions to prevent catastrophic
warming, coal use could peak in
the next couple of years.
Already, large parts of the
planet are abandoning coal. On-
tario operated five coal plants in
2003, the year it promised to
phase out coal-fired electricity
generation. They were all gone
by 2014. Portugal has vowed to
close its last two coal plants by
2023 and routinely generates all
its electricity from renewable
sources. More than 30 countries,
including Canada, Germany, Italy
and Mexico, have made plans to
close all their coal burners by
2030.
Britain, one of the biggest
economies in the world, has
done an amazing job of stripping
coal out of its energy mix. Last
summer, for the first time since
the 1880s, Britain went more
than two weeks without burning
any coal to keep the lights on. In
the past decade alone, the coun-
try has eliminated two-thirds of
the carbon dioxide emissions
from its electricity system, the
fastest pace among the big econ-
omies.
The International Energy
Agency says that “final invest-
ment decisions” for new coal
plants fell by three-quarters, to
23 gigawatts, between 2015 and- In 2018, possibly for the
first time, more coal burners
were shut down globally than
were approved for construction,
which typically takes four years.
But China is still adding coal-
plant capacity; its rate of new
construction more than offsets
the retirement of capacity in the
rest of the world – a flagrant re-
buff to the United Nations’ plea
that no new coal plants be built
anywhere after 2020. China has
reduced the pace of new coal-
plant openings substantially in
recent years, although the figure
is still distressingly high.
China has committed to a low-
carbon future, if only to reduce
the choking pollution that black-
ens its cities’ air, and has signed
the Paris agreement. Its coal con-
sumption may peak in the next
few years.
Coal use in China doesn’t have
to fall before Glencore and its ri-
vals feel more coal pain. Well
aware that coal can darken its
share price as ESG investors
come on strong, Rio Tinto, one
of the world’s biggest miningcompanies, unloaded the last of
its coal operations in 2018.
Mighty BHP Billiton might do
the same. Glencore itself has
agreed to cap its own coal pro-
duction at 150 million tonnes a
year and it will reduce its Scope 3
emissions (which includes indi-
rect emissions, such as flights
taken by employees and emis-
sions from suppliers) by 30 per
cent by 2035.
Glencore and the other diver-
sified mining companies that are
still stuffed with coal might have
to go one step further and spin
off the black stuff. Coal is becom-
ing a pariah product. Funds ev-
erywhere are resisting any expo-
sure to coal, which is synony-
mous with global warming and
dirty air. All big industrial com-
panies play the greenwashing
game. Ditching coal would make
that game far more credible.Smartminingcompaniesshouldjointherevolutionagainstcoal
ERIC
REGULY
OPINIONThecoalterminalat
AbbotPointisseennear
theGreatBarrierReef
inQueensland,Australia,
inJuly,2017.Asthe
worldbeginstoturn
againstcoal,morethan
30countries,including
Canada,Germany,
ItalyandMexico,have
madeplanstoclose
alltheircoalplants
by2030.
DAVIDMAURICESMITH/
THENEWYORKTIMESROME