Thank you very much for inviting me to speak.
First are some sound reasons to oppose a cap. Every tonne of carbon is equally bad for the climate, so why pick on the oil and gas industry emissions for a hard cap? The point, the entire point, of Canada's impressive carbon pricing scheme is to let the market find the cheapest and best ways to save tonnes rather than having the market be in the business of micromanaging individual sectors. We don't have a cap on Internet or air travel, so why oil and gas?
Yet I am in favour of a hard cap. My rationale rests on concerns about Alberta's and Canada's economic future in a carbon constrained world.
The climate is getting a much higher level of political attention at the top levels of major governments in a way that's really different from any time in the whole 30 years that I've focused my career on climate change. The world will not cut emissions as fast as environmentalists like me want, but they will be cut. Oil demand will peak and it will decline. The technology for accessing tight oil, fracking, will spread, putting a long-term restraint on prices and making Canada's oil, with its comparatively high upstream emission, relatively less competitive.
Even with war today, sadly, oil is 25% below its inflation adjusted price peak and futures point lower suggesting the market sees this as a blip.
I moved to Alberta from Pittsburgh. I've seen what a crash looks like. I've seen what it does to people. As an Albertan, one who wants to see good jobs for my children and my friends, including many friends in the oil patch, my judgment is that digging the economy deeper into oil and gas will just make the crash harder.
It's easy money now that we buy at the price of our children's economic future and of the planet's climate future. My hope is that government sends a clear message, a message that drives private ingenuity and investment away from oil and gas and towards new businesses that can harness Alberta and Canada's brain power, its engineering strength, its engineering services sector to develop new value-added businesses that can thrive in a world as oil and gas decline under a carbon constraint.
Some hope that a cap will drive investment in cutting emissions in upstream oil and gas. Even in some sense that's its formal purpose. It may. But despite serving years ago on the five person federal panel that recommended some of the key carbon capture and storage investments in Alberta, I hope that little effort is put into reducing upstream emissions. Doing so will just sink more money into cutting those emissions, and that can't in the long run secure Alberta's or Canada's economic future. It may divert money from other investments, so increasing our dependence on oil and gas.
After all, eliminating upstream emissions can only eliminate about a fifth of the overall emissions from the life cycle of oil and gas use. Most emissions come when the product is burned. The problem is the product, not the process of making it. That is the essential reason why Alberta and Canada must look beyond the oil and gas sector.
If we want a stable climate, we can't keep putting CO2 in the atmosphere. We can argue about how quickly the transition needs to be there and there are legitimately different views, but we will have to stop.
I urge you to move towards a stringent cap on upstream oil and gas emissions both to protect the climate and because it is in the long-run interests of Albertans and other Canadians whose economies are tied to oil and gas.
Of course, people with short-run interests in the current system, the fossil fuel party, will argue the contrary, but theirs are not the only legitimate voices in Alberta.
Thank you very much.