Even Trudeau’s Canada, gripped in carbon fight, won’t ditch coal

10th May 2019 By: Bloomberg

Even Trudeau’s Canada, gripped in carbon fight, won’t ditch coal

Justin Trudeau

OTTAWA – Set against lush hills, deep inlets and snow-kissed mountain peaks, Vancouver is the wellspring of Canadian environmentalism—and the heart of its climate dilemma.

British Columbia’s premier city prides itself on its green bona fides. The province is the birthplace of Greenpeace, ushered in Canada’s most successful carbon tax and is governed by a coalition that includes Green Party lawmakers. It’s also the one-time home to a young Justin Trudeau.

Less celebrated is Vancouver’s status as a major hub for coal and crude oil. That awkward paradox is an example of how Canada’s climate ambitions regularly bump up against its reality as one of the world’s top crude producers, coal exporters and per-capita emitters of carbon—even with an avowedly progressive prime minister like Trudeau.

Politically, Canada is riven over how to square the nation’s vast resource wealth with action to cut greenhouse gas emissions. Trudeau has pushed a green agenda only to see political opposition mount: The more he insists “the environment and the economy go hand in hand,” the more both sides feel betrayed. With national elections due this fall, his attempts at having it both ways threaten to derail his bid for a second term.

The Canadian divide between climate action and resource development falls somewhere along the jagged cuts of the Rocky Mountains, 600 miles east of Vancouver near British Columbia’s border with Alberta – in places like Sparwood, population 3 500.

Sparwood is Canada’s de facto coal capital. There are five mines near the town, one of them directly overlooking it, all owned by Teck Resources Inc. About five times a day, a train loaded with coal leaves this region and winds its way to Vancouver for export. Teck is the dominant employer in Sparwood; even the mayor is on the company payroll.

“Do we fight the stigma of coal? Yes, we do,” said David Wilks, who juggles mayoral duties with work at a Teck mine. He says that sense of guilt is projected by “what I’ll call the urban areas of Canada who think coal is a dirty four-letter word.”

Yet not all coal is the same, nor is it all a target of environmental groups. Canada produces thermal coal for electricity generation and metallurgical coal used to make steel. While Trudeau is pressing to phase out coal-fired power generation by 2030 and driving a global push for others to do the same, Canada remains a major producer and exporter of metallurgical coal, with the industry paying into British Columbia’s carbon tax.

To Mayor Wilks, it’s simple: as long as you need steel, you need the coal from the mountains encircling his town, and thus an industry paying workers annual wages that nearly always exceed C$100 000 ($75 000) annually. “We need metallurgical coal until they can find a substitute,” he said at the local Tim Hortons coffee shop, overlooked by one of the mines on the town’s edge.

The lucrative jobs in mining, and the lack of a clear alternative, have made places like Sparwood mostly off-limits to environmentalists, who have instead targeted coal-fired power plants and Canada’s oil sector while pushing for a ban on thermal coal exports.

The Port of Vancouver exported 38-million tonnes of coal last year, on a par with the biggest American terminals. Of that, about a third—12.7 million tonnes—was thermal coal, nearly all of it US-produced and shipped through Vancouver to Asia.

That makes Canada a global cheerleader for shuttering coal-fired plants while exporting huge quantities of the fuel and leaving mines producing steel-making coal largely alone.

Canadian Environment Minister Catherine McKenna, in an interview, stressed the “major distinction” between metallurgical and thermal coal. “The focus around the world is getting off coal in your electricity system,” McKenna said. “We have a climate plan, we’ve got to address our emissions and so we know phasing out coal is something that’s critically important.”

The Trudeau government’s environmental trade-offs satisfy few. His administration made enemies by introducing Canada’s first national carbon tax this year—taxing fuels in provinces that, unlike British Columbia, refused to do so on their own—and through steps to restrict oil tankers. But it also alienated environmentalists for not doing more on climate and by purchasing, and seeking to expand, the Trans Mountain oil pipeline that stretches from Alberta to a Vancouver-area port.

Across the Rockies in oil-rich Alberta, Trudeau is accused of ignoring the energy sector. A convoy of trucks drove 2000 miles this year from Alberta to the capital, Ottawa, to protest Trudeau’s policies, with signs calling for him to “build pipelines” and “save coal.”

Alberta is the home to the oil sands, the world’s third-largest crude reserve, and is by far the country’s biggest emitter due to oil production and coal-fired electricity. The province swung right in an election in April, with Jason Kenney becoming premier after pledging to reinvigorate the oil patch and kill the province’s carbon tax. He’s also expanding the allowable life of coal-fired power plants, easing back restrictions on thermal coal’s use. 

Conservatives campaigning against carbon taxes are sweeping to power at the provincial level in Canada, despite accompanying rebates that leave the average household better off. Andrew Scheer, the Conservative Party’s national leader, pledges to ditch the carbon tax if elected this fall. He hasn’t released a climate plan.

Trudeau meanwhile has to decide by June on whether to expand the Trans Mountain pipeline, and all signs point to him pressing ahead – enough to rile environmentalists without winning over Scheer. His government’s March budget included environmental measures, and C$120-million in funding for coal workers who lose their jobs. Whether voters are convinced by Trudeau’s balancing act will become clear in the fall election.

“The problem for this government, and any government, is what is politically reasonable is scientifically and morally untenable,” said Keith Stewart, a Greenpeace campaigner who has worked closely on the phase-out of coal. “They like to think, OK, we’re going to come down the middle, and that’s what Liberals in Canada are the best at.” The trouble, he said, is that on climate, “you can’t afford to come down the middle.”