Jennifer Winter

Energy Projects, Social Licence, Public Acceptance and Regulatory Systems in Canada: A White Paper

This white paper reports on the results of a year-long interdisciplinary collaboration aimed at identifying and summarizing extant research regarding social licence and related concepts, with a particular emphasis on understanding its implications for public acceptance of energy projects in Canada, and their related regulatory processes.

Safety in Numbers: Evaluating Canadian Rail Safety Data

After the horrific and deadly train explosion at Lac-Mégantic, Que. in the summer of 2013, there are serious questions being raised publicly about the safety of Canada’s rail-transport system. Unfortunately, Canada’s public rail-safety data are currently in no shape to provide the answers to those questions. When Canadians ask, as many have in recent months, whether the rail-transport system is “safe,�? they surely want to know whether the accident record is low — compared to other countries and to other forms of transport — and whether it has been improving or getting worse over time. Yet, the statistics that might provide the answers are worryingly inaccessible, sometimes conflicting, and in certain cases not available at all. The inability to publicly monitor airline safety statistics would be considered unacceptable. Yet trains transporting volatile goods across Canada arguably expose entire communities, as in Lac-Mégantic, to potentially catastrophic dangers. How is it, then, that the Transportation Safety Board, Transport Canada and Statistics Canada do not even publicly report something as basic as the number of train trips made every year in Canada? Nor do their statistics distinguish between incidents and accidents involving passenger trains and those involving freight trains. And how is it that the total number of accidents in some years is reported differently by these various monitoring organizations? If Canadians are, as it appears, destined to see increasing volumes of goods, specifically dangerous goods, transported by rail, it is that much more important that the federal government significantly improve the reporting of rail-safety data. It is not only vital that our railroads are safe; it is just as vital for the public to have information showing exactly how safe they are.

The 'Green Jobs' Fantasy: Why the Economic and Environmental Reality Can Never Live Up to the Political Promise

Agriculture is one of the least “green�? — that is, the least environmentally friendly — sectors in Canada, based on its energy-use intensity and greenhouse gas emissions intensity. But agriculture is also the “greenest�? sector in Canada, according to one measure that calculates the proportion of “green employment�? in various industries. Welcome to the world of “green jobs,�? where vague definitions often give energy-intensive, carbon-heavy industries a “green�? stamp of approval. Examples include companies making solar panels, but using large volumes of energy to do so or where an accountant preparing financial returns is counted as a “green�? worker at one office, but turns instantly “dirty�? should he cross the street to do the same accounting work at another office. It is also a world where inefficient power generation is considered positive, if it means employing more “green workers�? per unit of power output, regardless of any negative effects that may have on the economy. The concept of “green jobs�? has become immensely popular among policy planners looking to address the problem of global warming, yet are aware of the economic costs of anti-carbon measures. The promise that western economies can reduce carbon emissions while creating thousands, if not millions, of “green jobs�? — which will more than compensate for the job losses that will occur in sectors reliant on fossil fuels — has been especially embraced by politicians, relieved to find a pro-climate policy that also doubles as a pro-economic policy. Unfortunately, there is scant agreement on what fairly qualifies as a “green job,�? and much evidence that what policy-makers frequently consider “green jobs�? are, in fact, existing jobs, belonging to the traditional economy, but simply reclassified as “green.�? By emphasizing “green jobs,�? policy-makers risk measuring environmental progress based on a concept that can often be entirely irrelevant, or worse, can actually be detrimental to both the environment and the economy. Too often, “green job�? policies reward inefficiency, while also failing to distinguish between permanent, full-time jobs and temporary or part-time jobs. In some cases they can also discourage trade, limit or thwart competition, result in greater job losses elsewhere in the economy, and demand massive government subsidies, with some government “green job�? programs requiring hundreds of thousands of dollars, or even millions, to create a single job. The urge of politicians to champion “green employment�? is understandable given its convenient, if frequently unrealistic promise of a politically saleable anti-carbon policy. However, a more reliable and meaningful measure of environmental progress ultimately has little to do with the number of jobs a particular company creates (after all, if economic efficiency — and hence, prosperity — is indeed a policy goal, the number of jobs created should ideally be as minimal as necessary for every unit of output). Rather, if minimizing energy use and greenhouse gas emissions is the desired policy outcome, then measuring the intensity of energy use and greenhouse gas emissions per unit of output can be the only meaningful metric. It may not have the political appeal that a promise of “green jobs�? does. But unlike “green jobs,�? both of these measures provide quantifiable, non-arbitrary metrics of environmental performance and progress. In other words, unlike the problematic, arguably illusory concept of “green employment,�? measuring energy-use intensity and emissions

Risky Business: The Issue of Timing, Entry and Performance in the Asia-Pacific LNG Market

Canada’s federal government has championed the prospect of exporting liquefied natural gas (LNG) to overseas markets. The government of British Columbia is aggressively planning to turn itself into a global LNG-export hub, and the prospect for Canadian LNG exports is positive. However, there are market and political uncertainties that must be overcome in a relatively short period of time if Canada is to become a natural gas exporter to a country other than the United States. This report assesses the feasibility of Canadian exports and examines the policy challenges involved in making the opportunity a reality. Demand for natural gas in the Asia-Pacific region is forecast to grow over 60 per cent by 2025. LNG trade is expected to make up nearly two-thirds of global natural gas trade by 2035. Supply in the Asia-Pacific region is limited, requiring significant LNG imports with corresponding infrastructure investment. This results in substantial price differentials between North America and the Asia-Pacific countries, creating a potentially lucrative opportunity for Canada. The lower North American prices are a reflection of the fact that there is a surplus of gas on this continent. Canada’s shipments to its sole export market, the United States, are shrinking in the face of vast increases in American production of shale and tight gas. Canada has a surplus of natural gas and there is growing demand in the Asia-Pacific region. Proponents argue that all Canada needs to do is build and supply facilities to liquefy gas and ship it across the Pacific; the reality is not so simple. Timing is one of the key challenges Canada faces. Producers around the world — including in the newly gas-rich U.S. — are racing to lock up market-share in the Asia-Pacific region, in many cases much more aggressively than Canada. While this market is robust and growing, the nature of the contracts for delivery will favour actors that are earliest in the queue; margins for those arriving late will be slimmer and less certain over time. As supply grows, so too does the likelihood of falling gas prices in the Asia-Pacific region, making later projects less lucrative. LNG projects are feasible only on the basis of long-term contracts; once a piece of market share is acquired, it could be decades before it becomes available again. Currently, there are more proposed LNG-export projects around the world than will be required to meet projected demand for the foreseeable future. Delays beyond 2024 risk complete competitive loss of market entry for Canadian companies. B.C. is behind schedule on the government’s goal of having a single terminal operational by 2015. Of equal concern is the lack of policy and regulatory co-ordination, with disagreements between governments over standards, process and compensation for those stakeholders involved in the potential LNG industry. Issues as basic as taxing and royalty charges for gas shipments between provinces and locating facilities and marine-safety standards remain unsettled in Canada. The B.C. government has announced plans to levy special taxes on LNG, a policy that could render many current proposals uncompetitive. The LNG market is much more complicated than current discussions suggest; this report delves into every aspect relevant for Canada as a potential exporter. The prospect for Canada expanding into the Asia-Pacific market is entirely viable. Canada has almost everything going for it: political stability, free-market principles, immense resources, extensive infrastructure and industry experience. Everything, that is, except a coordinated regulatory and policy regime. Without that, Canada could be shut out, stuck relying on a single U.S. gas-export market that, increasingly, does not need us.

Size, Role and Performance in the Oil and Gas Sector

The oil and gas sector is a key driver of the Canadian and Albertan economies. Directly and indirectly it typically accounts for roughly half of Alberta’s GDP, as well as one-third of the country’s business investment and a quarter of business profits — and rising global demand will only add to these figures. However, that energy sector is also a changeable place populated by companies of all shapes and sizes, from small Emerging Juniors to well-established Majors whose daily production capacities are hundreds or thousands of times greater. The sector’s assorted firms have different structures and ambitions, respond in distinct ways to market forces and have unique impacts on the economy. These differences in size, role and performance must be reflected in energy and related economic policies if they are to be effective in achieving policy goals. For example, they must recognize that the smallest firms are not always the fastest growers or the most innovative; that Intermediates are the most highly leveraged, with the highest debt-to-equity ratios; and that while Majors tend to have the lowest average cost per well drilled, they also (along with Emerging Juniors) have the highest operating costs. Despite the industry’s critical importance, relatively little hard data has been made available concerning companies’ structure, behaviour and performance, based on size. This paper goes a considerable way toward filling that gap, bringing together comprehensive datasets on 340 public oil and gas firms to chart essential patterns and trends, so policymakers and industry watchers can better understand the complexity and functioning of this important sector.