N.L.'s transition away from oil is necessary for the environment and the economy, prof says

2020 became the year of the pandemic. Newfoundland and Labrador has managed to keep the cases of COVID-19 low, but the restrictions still affect everyone. Now there's a vaccine delivered in record time. Our series Beyond 2020 will examine the people and issues that are going to dominate the year ahead.

A University of Waterloo professor says Newfoundland and Labrador needs to begin its transition away from oil production, not just for the sake of the environment, but also for the economy.

Carter, a professor in political science, says oil and gas is becoming a risky bet as investment dwindles and energy companies begin to see the value of their assets decline.

"It used to be that we would talk about the need for oil wind down on climate grounds alone, the imperative given the climate crisis. What we are seeing now, though, is markets are turning away from oil," she told CBC News.

"We are in the midst of a sea change for investors, investors that have trillions of dollars under management."

The effects of climate change, new technological developments and world economic and political changes, Carter said, have put oil-reliant economies in a perilous position.

"We're getting signals from a lot of different directions that places that are dependent on oil are at risk," she said.

"My question to the government of Newfoundland and Labrador, as they think about the future for oil, is what do these major investors and even these oil companies, what do they know that we don't know if they're stepping away from oil? What does that mean for us?"

Carter pointed to the Production Gap Report, a document produced by the UN Environment Programme, as a road map for how the province could wean itself off of fossil fuels. 

"What this report does is it shows the gap between what governments want to do in terms of oil production and where we need to be to bend that curve in order to get to climate stability," she said.

"What that means for Newfoundland and Labrador is decreasing oil production by four per cent each year, year over year, until we get to 2030. If we think of it that way, a four per cent decrease, that is something that I think is gradual, it can be managed."

Carter also refuted the claim from some in the province's oil industry that the product from Newfoundland's offshore is greener or more ethical than fossil fuels from elsewhere in the world.

"That doesn't stand to reason, actually. There is no way that oil can be ethical or oil can be clean because at its very root, oil is the leading cause of the climate crisis.… I think we're very, very hard-pressed to deem that it's an ethical commodity by any stretch of the imagination," she said.

"Regardless of how you take that oil out of the ground, it's being shipped somewhere else and it's being burned and it's [going] into our atmosphere, our shared global atmosphere … so there's no way of doing oil extraction or production in a way that is clean. That's an oxymoron."

The 2020s is the decade of global energy transition.- Angela Carter

While there will still be demand for oil for years to come, Carter said exponential growth in the production of solar and wind energy means the world will need less and less as time goes on.

"We crossed this tipping in 2016 or 2017 when more people were employed in the renewable sector globally than the fossil fuel [industry], more investments going toward a renewable sector than fossil fuels," she said.

"The 2020s is the decade of the global energy transition. We are moving, as a global community, away from oil towards low-carbon, renewable energy, so yes, we're going to need oil, but we're going to need a lot less of it."

Path to 'success into the future'

As the province's oil production winds down, Carter said, the economic investments to boost the industry and efforts to attract skilled workers to oil and gas could instead be diverted to begin to create a new, low-carbon economy.

"That's where the global community is going, so that would set us up for success into the future throughout the 2020s," she said.

Carter said some experts are now finding that the transition away from oil production to renewable resources can provide a new economic opportunity.

She said there are skilled workers in the province's oil sector that could easily transfer their skills to a low-carbon economy, working to harness wind, hydro or wave energy.

"We've got the capacity. We also have the infrastructure. We've got the know-how," said Carter.

"When I speak to people who are working in the industry right now and the oil sector industry who are open to this notion of renewables, they think it's not actually that much of a leap." 

A transition toward a low-carbon economy, she said, is not so different from when the province began to move away from the fishery to focus on oil a few decades ago.

"We were looking for something that would allow us to break free from centuries of poverty and underdevelopment and volatile commodities that we had based our economies on. We were looking for something that could give us more economic stability," she said.

"When we transitioned to an oil economy, we had to put in a great deal of work. Successive governments had to put in a great deal of investment and research and development money."

Carter said the province is now in good stead to make that transition again, this time moving away from the oil and gas industry.

"I think that this is an opportunity here that not only we have to take advantage of, I think it's an opportunity that we are well positioned to take advantage of," she said.

"All of the talent and the money over four decades that we've directed towards boosting an oil sector, we can turn that now in another direction."

But as that change is made, Carter said, it's important that jobs are protected, especially during the pandemic.

"Equity for people has to be at the forefront, and that means workers who might otherwise be hurt by this transition need to be supported and taken care of. Same with communities," she said,

"There's lots of workers right now who need support, and those oil workers in particular, they do need support, but not towards entrenching an oil industry, because we know that that is not a path to economic safety."

While the province's highest-profile step toward renewable energy — the Muskrat Falls hydroelectric project — has been dubbed a boondoggle, Carter said that shouldn't discourage further investment in renewable projects.

"It would be a great shame if the lesson that we take away from Muskrat Falls is that we can't do anything in terms of renewables or a low-carbon economy," she said.

"I think that's the wrong lesson to take from that."

She cites Denmark as an example for making the transition, as the country announced in early December that it would be ending oil exploration and begin winding down its industry.

Funding available

There is already federal money available to help with the transition, Carter said, as Prime Minister Justin Trudeau has allocated $15 billion to fight climate change while creating new jobs. 

But she is critical of how the provincial government has used its $320-million portion of that federal funding meant to support workers in the oil and gas industry, while reducing carbon emissions.

"If you look really closely about what happened after those funds were allocated to the provincial government, what happened was that an oil and gas recovery task force was created," she said.

"Rather than helping workers adjust, it became about recovering the oil industry. Those funds could have been used to kick-start … that pivot to a low carbon economy." 

A likely first step to any transition to a low-carbon economy, however, would start with the premier's economic task force, a group that Carter hopes will begin to make a change.

"I hope that they will be able to take a look around and see what's happening in the global community, understand the risks of an oil-based economy,"  she said.

"Then start doing that pivot work to lay the foundation for us, taking our skills and our talents and moving somewhere that's a little bit safer for us, both economically and in terms of climate in the future.… I hope they'll take this seriously as a priority."

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