Prepping for a carbon-constrained future One of the many things Peter
Provincial carbon tax or no, businesses should get ready
Tertzakian talked about in his interview for this issue of Alberta Venture was the internal combustion engine. He made the point that it is incredibly inefficient, using only about 15 per cent of a barrel of oil to propel the vehicle down the road. The rest is blown out the exhaust pipe as heat. “We banned the incandescent light bulb because it was so inefficient,” he says. “If you ban that, logically you should ban the internal combustion engine too.”
Icing the ICE may sound radical. It has, after all, shaped transportation, urban development and much more about the ways humans organize and entertain themselves for more than a century. But don’t bet the farm it won’t happen. Last October, the German Bundesrat – a legislative body representing that country’s 16 states – called on the European Commission to pass laws ensuring that by 2030, “only zero-emission passenger vehicles will be approved.” So it’s not a ban, exactly, applying as it does only to passenger vehicles, and it’s still a long way from law, but German regulations have typically shaped EU regulations, and the likelihood that the ICE faces a long, slow decline – from this measure and other pressures – is high.
Regardless of how that story ends, it’s one more bit of evidence that the world is heading, lurching and uncertainly, towards a carbon-constrained future. Whether because of a road tax on Hummers (as exists in many European countries) or a cap-and-trade system like that between California, Ontario and Quebec or the carbon capture and storage efforts we see in Saskatchewan, the cost of emitting carbon is going up.
All businesses should be preparing for the market shifts this will cause. Enbridge, for example, has aggressively been shifting its business from one weighted to carbon-intense oil to less intense natural gas and renewables. And then there are the opportunities for new business. Just one example: On page 50, Questor’s Audrey Mascarenhas talks about the relatively cheap waste-heatto-energy technology her company can provide. It can reduce greenhouse gases and save you money on your energy bill. The bottom line is that those who consume less energy in the creation and delivery of their widget will have an advantage over those who consume more. They’ll be the ones that thrive in the new environment.
This doesn’t mean the end of the oil and gas industry. Global demand remains around 100 million barrels per day, and it isn’t going away anytime soon. But it does mean a premium will be placed on lower-carbon hydrocarbons. As Tertzakian also points out, Alberta’s hydrocarbon resources run the gamut from the driest of natural gas through the condensates and light oils to heavier oils and then finally the oil sands. There’s lots of room in there to develop relatively low-carbon resources.
So Alberta’s new carbon tax isn’t the only reason to reduce fossil fuel consumption. There are many, including the most important of all: the moral imperative that humanity stop secreting so much carbon into the atmosphere. Global warming is real, the burning of fossil fuel contributes significantly to it, it is damaging the planet we all share and all of us have to carry some of the burden of slowing it.