Quantcast
Environmental News for a Healthier Planet and Life

Help Support EcoWatch

Canada Risks Billions in a 'Carbon Bubble' as Kinder Morgan Execs Get Big Bonuses

Energy
Oil sands, Fort McMurray, Alberta on Nov. 11, 2010. eryn.rickard / CC BY 2.0

By Andy Rowell

Days after Justin Trudeau blew an estimated $15 billion of hard-earned Canadian taxpayer money on Kinder Morgan's Trans Mountain pipeline, scientists are warning just how financially and ecologically stupid and short-sighted the investment was.

In a peer reviewed scientific paper published Monday, the scientists warn of the existence of a "carbon bubble," due to the plunging price of renewables and improved energy efficiency measures, which will make many fossil fuel projects "stranded assets."


The abstract in the prestigious journal Nature could make Trudeau choke on his morning coffee: "Several major economies rely heavily on fossil fuel production and exports, yet current low-carbon technology diffusion, energy efficiency and climate policy may be substantially reducing global demand for fossil fuels."

It continues: "This trend is inconsistent with observed investment in new fossil fuel ventures, which could become stranded as a result."

Crucially, the scientists argue that many fossil fuel projects will become stranded due to changing market conditions, especially with the cost of renewables rapidly decreasing.

But this economic loss of "stranded fossil fuel assets" will be exemplified if "new climate policies to reach the 2°C target of the Paris Agreement are adopted and/or if low-cost producers (some OPEC countries) maintain their level of production ('sell out') despite declining demand."

If this happens there will be winners and losers, with "winners (for example, net importers such as China or the EU) and losers (for example, Russia, the United States or Canada, which could see their fossil fuel industries nearly shut down)."

So Canada will be a net loser. And the reason will be the tar sands. And if the tar sands are "shut down," Kinder Morgan is a pipeline to nowhere.

Professor Jorge Viñuales, co-author, told The Guardian: "Contrary to investor expectations, the stranding of fossil fuel assets may happen even without new climate policies. Individual nations cannot avoid the situation by ignoring the Paris agreement or burying their heads in coal and tar sands."

Dr. Jean-François Mercure, the lead author, from Radboud and Cambridge universities, also told the newspaper: "If people stop putting funds now in fossil fuels, they may at least limit their losses."

Trudeau has just done the opposite. As the prime minister buries his political future in the tar sands, others have criticized last week's bail-out as a clear "subsidy" to the oil industry, which goes against a G7 pledge to phase out "inefficient" support for polluting sectors by 2025.

"The decision by the Canadian government to acquire the Trans Mountain pipeline from Kinder Morgan has essentially been taken because, given the risk, no other private investor would step in," argues Mark Campanale, the executive director of Carbon Tracker. "It is government subsidizing a market failure."

But it gets worse: As Trudeau invests in "carbon bubbles" and "market failures," two Kinder Morgan bosses are literally laughing all the way to the bank. Two senior executives have each been awarded $1.5-million "retention bonuses" in connection with the $4.5 billion sale of the pipeline.

Opposition MPs were outraged at the news: One, the B.C. New Democrat MP Nathan Cullen, said in the House of Commons: "Adding insult to injury to this public bailout, it includes a $3 million bonus to Kinder Morgan executives."

Canadian economist Robyn Allan, who has spent the past few years analyzing the dodgy finances behind the Trans Mountain project, also criticized the payouts: "It's a large amount of money and it's something that most people are going to be shocked about."

They are right to be shocked about another example of rewarding big oil executives for climate failure.

Reposted with permission from our media associate Oil Change International.

EcoWatch Daily Newsletter

Residents plant mangroves on the coast of West Aceh District in Indonesia on Feb. 21, 2020. Mangroves play a crucial role in stabilizing the coastline, providing protection from storms, waves and tidal erosion. Dekyon Eon / Opn Images / Barcroft Media via Getty Images

Mangroves play a vital role in capturing carbon from the atmosphere. Mangrove forests are tremendous assets in the fight to stem the climate crisis. They store more carbon than a rainforest of the same size.

Read More Show Less
UN World Oceans Day is usually an invite-only affair at the UN headquarters in New York, but this year anyone can join in by following the live stream on the UNWOD website from 10 a.m. to 5 p.m. EST. https://unworldoceansday.org/

Monday is World Oceans Day, but how can you celebrate our blue planet while social distancing?

Read More Show Less
Cryptococcus yeasts (pictured), including ones that are hybrids, can cause life-threatening infections in primarily immunocompromised people. KATERYNA KON/SCIENCE PHOTO LIBRARY / Getty Images

By Jacob L. Steenwyk and Antonis Rokas

From the mythical minotaur to the mule, creatures created from merging two or more distinct organisms – hybrids – have played defining roles in human history and culture. However, not all hybrids are as fantastic as the minotaur or as dependable as the mule; in fact, some of them cause human diseases.

Read More Show Less
National Trails Day 2020 is now titled In Solidarity, AHS Suspends Promotion of National Trails Day 2020. The American Hiking Society is seeking to amplify Black voices in the outdoor community and advocate for equal access to the outdoors. Klaus Vedfelt / DigitalVision / Getty Images

This Saturday, June 6, marks National Trails Day, an annual celebration of the remarkable recreational, scenic and hiking trails that crisscross parks nationwide. The event, which started in 1993, honors the National Trail System and calls for volunteers to help with trail maintenance in parks across the country.

Read More Show Less
Indigenous people from the Parque das Tribos community mourn the death of Chief Messias of the Kokama tribe from Covid-19, in Manaus, Brazil, on May 14, 2020. MICHAEL DANTAS / AFP / Getty Images

By John Letzing

This past Wednesday, when some previously hard-hit countries were able to register daily COVID-19 infections in the single digits, the Navajo Nation – a 71,000 square-kilometer (27,000-square-mile) expanse of the western US – reported 54 new cases of what's referred to locally as "Dikos Ntsaaígíí-19."

Read More Show Less
World Environment Day was put into motion almost fifty years ago by the United Nations as a response to a multitude of environmental threats. RicardoImagen / Getty Images

It's a different kind of World Environment Day this year. In prior years, it might have been enough to plant a tree, spend some extra time in the garden, or teach kids the importance of recycling. This year we have heavier tasks at hand. It's been months since we've been able to spend sufficient time outside, and as we lustfully watch the beauty of a new spring through our kitchen's glass windows, we have to decide how we'll interact with the natural world on our release, and how we can prevent, or be equipped to handle, future threats against our wellbeing.

Read More Show Less

Trending

Experts are worried that COVID-19, a primarily respiratory and airway disease, could have permanent effects on lungs, inhibiting the ability for divers to continue diving. Tiffany Duong / Ocean Rebels

Scuba divers around the world are holding their metaphorical breath to see if a coronavirus infection affects the ability to dive.

Read More Show Less