Three Chief Executives Tackle Climate Change
Canada’s Prime Minister Justin Trudeau, U.S. President Barack Obama, and Mexico’s President Enrique Peña Nieto joined forces in Ottawa this week expressly to demonstrate how North America has the “moral imperative to show strong leadership building on the Paris Agreement and promoting its early entry into force.” This meeting was to showcase their resolve to fight climate change.
Their policy creators had crafted and issued a 5,000-word statement outlining the leaders’ joint desires and an action plan when it comes to climate. Issued from the Canadian prime minister’s website, it is called “Leaders’ Statement on a North American Climate, Clean Energy and Environment Partnership.”
Much of the language describes “goal setting, cooperating, collaborating and sharing,” but some of their policy initiatives could have a direct effect on the oil and gas industry if the proposed policies find their way to Capitol Hill and become written into law, or if they otherwise become rules under the agencies of the executive branch of the government under which their enforcement could become reality, unless courts intervene as in the case of knocking down the frac-ban on federal lands.
The triumvirate said they would strive to achieve 50 percent clean power generation by 2025. That’s in nine years.
More direct to the industry, the leaders said, “Today, Mexico will join Canada and the United States in committing to reduce their methane emissions from the oil and gas sector – the world’s largest methane source – 40% to 45% by 2025 towards achieving the greenhouse gas targets in our nationally determined contributions.
“To achieve this goal, the three countries commit to develop and implement federal regulations to reduce emissions from existing and new sources in the oil and gas sector as soon as possible.”
Specific to reducing methane emissions in the oil and gas sector:
- “Reduce methane emissions from the oil and gas sector, the world’s largest industrial methane source, 40-45 percent by 2025 towards achieving the greenhouse gas targets in our nationally determined contributions, and explore additional opportunities for methane reductions. The three countries commit to develop and implement federal regulations for both existing and new sources as soon as possible to achieve the target. …
- Collaborate on the development of federal programs and policies, and exchange information, practices and experiences regarding reducing emissions in the oil and gas sector to improve outcomes.
- Encourage oil and gas firms to join international efforts such as the Climate and Clean Air Coalition’s Oil and Gas Methane Partnership and the Global Methane Initiative, and domestic ones.
- Share information and tools to support better methane data collection, improved source measurements, and transparency of emissions reporting across North America to enhance the effectiveness of emission inventories, and promote the adoption of cost-effective technologies and practices for field measurement, monitoring, and emissions mitigation.
Other energy related items included reducing GHG emissions from light- and heavy-duty vehicles by aligning fuel efficiency and/or GHG emission standards by 2025 and 2027, respectively; aligning air pollutant emission standards for light- and heavy-duty vehicles and corresponding low-sulphur fuel standards beginning in 2018; limiting temperature rise this century to well below 2oC, and pursuing efforts to limit the temperature increase to 1.5 degrees C.
Takeaways
- “To achieve this goal, the three countries commit to develop and implement federal regulations to reduce emissions from existing and new sources in the oil and gas sector as soon as possible.” [I.E.: New regulations will be forthcoming.]
- “Canada, the U.S. and Mexico will align approaches to account for the social cost of carbon and other greenhouse gas emissions when assessing the benefits of emissions-reducing policy measures.” [I.E.: Not found in this memo is any mention of taking into account the economic costs of implementing new restrictive policies—direct costs that will be passed on to ratepayers, loss of jobs and cause of regional economic downturns if strict policies massively curtail resource development (similar to what has happened in the coal industry), lack of investment to develop resources and infrastructure because of increasing political risk and expense in North America, etc.]
- “We will also support robust implementation of the Paris Agreement’s transparency and carbon markets-related provisions.” [I.E.: levying a carbon tax, or cap-and-trade payment scheme]
As to the last point, at least one oil major, ExxonMobil Corp., has apparently upped its ante. The Wall Street Journal reported that the company is ramping up its lobbying efforts of other energy companies to gain support a carbon tax. The Journal said that its efforts to do so marks “a shift in the oil giant’s approach to climate change as the industry faces growing pressure to address the politically charged issue.” The report said “Exxon has been making the case with its U.S. counterparts to support a carbon tax, arguing that the industry must not oppose all climate policies, according to people familiar with Exxon’s thinking.”
This is not atypical of large, global enterprises in today’s post-Paris climate change environment, in which many of whom are announcing they are on board with climate change policies, they are moving to renewables, and they are doing whatever they can to obtain high “green scores” from various organizations.
