Wednesday, August 29, 2018

Place Your Bets. Trudeau Announces Canada's 'Clean Fuel Standard.'

It's called a "clean fuel standard" and it will be an unusually ballsy move for Justin Trudeau - if it ever comes into being.

CFS in a nutshell:
The CFS aims to make all fuels cleaner, and includes policies such as adding ethanol to gasoline or requiring more renewable natural gas to be produced from landfills and food waste.

While a carbon tax targets the person using the fuel, the CFS is aimed at companies supplying the fuel.
CFS regulations for liquid fuels will come out next spring - just in time for the federal election. Solid fuel regs will come into effect in 2020.
It's difficult to pinpoint what impact the CFS could have since the policy is still being developed, however it could raise gasoline prices by five cents per litre at the pump, according to an estimate by the Alberta government. Natural gas and other energy prices would rise as well.
In reality there is no CFS policy as such, at least not yet. It's still being formulated which means it has about the same chance of a stillbirth as electoral reform, especially if Alberta has anything to say about it.

The Alberta government says the CFS could undermine all the work the province has taken to tackle climate change since it could add significant costs for low-income families and trade-exposed industries without any provisions to cushion the blow.
This feels like they are writing off Alberta and we can't have that happen. We're prepared to continue swinging on this one and stand up for what's important in Alberta," said Marg McCuaig-Boyd, Alberta's energy minister. 
The CFS will have an impact on all provinces, but especially Alberta.
Alberta complains CFS will mean bigger bills for consumers, as much as five cents per litre at the pump for gasoline.
A large oil company would likely see costs rise across the board at every facility it owns. For instance, an oilsands plant would pay more for using natural gas to process its bitumen, a refinery would pay more for natural gas used to separate oil into different fuels and petroleum products, and a company would likely have to buy ethanol to mix with gasoline before it can be sold at the pumps. Across the board, expenses could increase in the oilpatch. 
The Alberta government is also watching smaller details of the CFS such as how coal-fired power plants will be impacted. The federal government was considering excluding those power plants from the CFS since those facilities are already being phased out by 2030 under a separate policy. However, the Alberta government is concerned the CFS could be a perverse disincentive for companies to switch from coal to natural gas in power plants, since natural gas would be impacted by the CFS.
This sounds ambitious - CFS atop carbon pricing. Unfortunately this prime minister doesn't do 'tough' well and he would have to be tough enough to tame the western producing provinces and the eastern consuming provinces and a disgruntled public - all in an election year.

Any bets? Place your bets. We're giving odds. The fact that next to no effort is being made by the government to inform the public of CFS (or carbon pricing for that matter) to build popular support for the initiative speaks volumes. Without some degree of public acceptance, CFS is just another tax on the working man's pay packet, another cash grab. That's how Trudeau's opponents will sell it and this may go the way of Dion's doomed-from-the-outset, Green Shift programme.

Oh yeah. CFS also won't affect bitumen sales on world markets or the Justin Trudeau Memorial TransMountain Pipeline. Trudeau is concerned about Canadian fossil fuel emissions, not the emissions from Canadian bitumen burned abroad. Sure it all goes up into the same atmosphere but somehow it's not the same, sort of.


Anonymous said...

Three years after his election there's still no sign of the promised carbon tax. I put the odds of CFS being passed before the next election at about the same as the odds of me winning the lottery - without a ticket.


The Mound of Sound said...

Cap, if you do win the lottery - without a ticket - can I have half?

Toby said...

Come election time the Libs can go around saying they have a "clean fuel standard" or that they are working on a "clean fuel standard." Of course, whenever asked about it they will say that fuel will be clean and then change the subject and all will proceed as before.

McKenna's Ministry meetings must be like something out of a Monty Python skit with attendees contributing increasingly wild suggestions and achieving the possibility of another meeting.

Anonymous said...

You can have half of what's left after I donate to the LPC.


Owen Gray said...

That's a move that would -- with a carbon tax -- cover producers and consumers. The bottom line is that we will have to pay to stop climate change. Have we become such Scrooges that we refuse to recognize that fact?

Anonymous said...

Cap has the odds dead on.
This whole mess of an idea was tried over the last two decades in the U.S. with complete failure in so many ways. The last report I read questioned whether ethanol was even more polluting than gasoline.

There is no political party in Canada willing to honestly tackle the greenhouse gas issue and it will require a slightly right of centre party that steals real solutions in Europe and elsewhere and rolls them into a cheaper cost of living, jobs producing policy that will have broad appeal. Many countries over the next few years are banning the sale of fossil fuel powered cars in the next few years. in the southern heavily populated areas of this country that would work the same. In Northern or rural areas it will take longer for new technology to offset the distance problems When it comes to home heating I believe some provinces require all new houses to use electric heat. This needs to be applied across the country where possible. Anybody who has bought a portable room heater knows how cheap it is to stay comfortable down to freezing or so. There are also many more powerful baseboard heaters available as well. This simply requires massive increases in non fossil fuel generation along with a ban on the old fossil fuel plants. Air of this is doable with present technology and while the oil and gas industry may shrink from 5% of the Canadian economy now, those jobs will be spread across the country as well as retrofitting older houses using oil or gas along with ultimately lower fuel and heating bills for everyone. I suspect that if presented with an option like this many of the 60% of non party affiliated voters would look at this at a viable alternative to the 4 jokes of political parties we have today.


Anonymous said...

Well, well, well, Twiddle dee and Twiddle dumb,
CFS's will be coming to town.
A new substance where we can all drown
Once more again, now ain't that plum. Anyong

Trailblazer said...

Anonymous Anonymous said...
Cap has the odds dead on.
This whole mess of an idea was tried over the last two decades in the U.S. with complete failure in so many ways. The last report I read questioned whether ethanol was even more polluting than gasoline.

We have to be cautious that our remedies to combat climate change are nothing but deflections or even nefarious reasons to use the situation for profit!!


Trailblazer said...

even nefarious reasons to use the situation for profit!!


Or even for taxation!!


Anonymous said...

Ethanol seems to be more about subsidizing farmers than any great environmental gain. You still end up burning hydrocarbons and producing carbon dioxide.


Rob said...

I know a pig farmer in Minnesota (200,000 a year). He also grows corn. He used to grow his own corn to feed the hogs. When the great ethanol craze started, he changed the type of corn he grows to whatever they use to produce ethanol. The ethanol corn sells for double of what he now pays for the feed corn for the hogs. He is laughing all the way to the bank.

Northern PoV said...

The main climate debate in Canadian politics is between

the deniers
(It ain't happening and if it is then its definitely not our fault)


the believers
(who talk cute but as you point out, actually do nothing)


The Mound of Sound said...

Well we appear to have a consensus. I was generally supportive of Dion's Green Shift except for how it was bungled.

Dion formulated his policy as opposition leader, not prime minister. He fashioned it to be the core of the Liberal's election platform. That was utter hubris.

These policies need "whole of government" power to disseminate information about the problem to be addressed, why we need that particular policy and its urgency. Dion had none of those resources from the opposition bench. Insult to injury came when, well before Dion was prepared to unveil his proposal, the Tories and New Dems got word of it, allowing them to seize the narrative, make Dion out to be a threat to Canadian pocketbooks and generally beat him over the head with it.

Even though Trudeau has the power of majority government behind him, he's done no better than Dion with his climate change policies. The Libs haven't reached out to the public to sell their proposals. Townhalls are no substitute. They haven't built a popular consensus. They haven't really tried.

John's Aghast said...

The next natural resource to be taxed: Sunshine! As long as the royalties are no higher than the royalty on fracked gas, I guess my pension will cover it.