Commentary

No More Oil Industry Subsidies

I wonder how much no-emission, renewable energy infrastructure could be built for $88 Billion US?

By Jim Sweetman
Published February 11, 2016

The 2015 Paris Climate Conference (COP21) concluded last December with an agreement to limit global warming to below 2 degrees Celsius. So we must reduce our carbon dioxide emissions from the burning of fossil fuels - oil, natural gas, coal - to the level that can be continuously absorbed by the earth's ecosystems - plants, oceans and soils.

Said another way, we must reduce our burning of fossil fuels by 80 percent. And the developed countries like Canada must do this by 2050. That's 36 years from now.

The fossil fuel industry has already found 5 times more oil, natural gas and coal than we can ever burn if we have any hope of limiting global warming to below 2 degrees Celsius.

Yet they keep looking. In remote and environmentally sensitive areas all over the earth. "Ain't no mountain high enough. Ain't no river wide enough. Ain't no valley low enough" for the fossil fuel industry.

But why wouldn't they keep looking? In November 2014, The Guardian newspaper in England reported, "rich countries" - including ours - "are subsidizing oil, gas and coal companies by about $88 Billion US per year to explore for new reserves."

These companies want to keep building new infrastructure - pipelines and rail lines and roads across mountains and rivers and valleys to reach refineries and terminals. And rich countries - including ours - continue subsidizing and allowing that too.

Enough. No more fossil fuel exploration. No more new fossil fuel infrastructure. We don't need it.

I wonder how much no-emission, renewable energy infrastructure could be built for $88 Billion US?

Jim is involved with a number of local food and community service organizations. He is a retired engineer living in Dundas.

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By Shaykh (anonymous) | Posted February 11, 2016 at 13:53:55

Agreed. Unfortunately, the current short-sighted rulers of this world and the mindless consuming masses remain heedless. From scripture, "Mutual rivalry for the things of this world diverts you, until you visit your graves, ah but you will soon come to know".

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By Crispy (registered) | Posted February 11, 2016 at 20:08:19

Please point me in the direction of the study that proves that if we reduce our burning of fossil fuels by 80% the result will be a limiting of global warming to below 2 degrees Celsius. Thank you.

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By z jones (registered) | Posted February 12, 2016 at 09:21:00 in reply to Comment 116501

There's this thing called the google which you can use to easily find easy-to-find information instead of ordering random strangers on the internet to do your work for you. But since you asked...

Canada's tar sands need to stay in the ground, the oil beneath the Arctic has to remain under the sea, and most of the world's coal must be left untouched in order to prevent global temperatures from rising more than 2°C, a study released Wednesday says.

...

The research, unlike other bleak assessments of the world's climate predicament, zeroes in on which regions should halt their production of coal, oil, and gas—and by how much. It comes ahead of climate talks in Paris later this year that aim to broker a new global accord to cut greenhouse gas emissions.

...

Absent a dramatic global policy shift, such as a universal tax on carbon emissions, the study seems to suggest that the 2°C goal is far out of reach.

...

In addition to abandoning more than 80 percent of current global coal reserves, the researchers say, the world should forego extracting a third of its oil and half of its gas reserves before 2050.

...

As for oil, the Middle East holds more than half the world's "unburnable" oil, according to the analysis, or 38 percent of the region's reserves. Canada would not be able to use any oil from its emissions-intensive tar sands, McGlade says, unless the energy used during production became entirely carbon free. Of the Arctic's oil he says: "That's an unburnable resource if you want to stay below 2 degrees."

http://news.nationalgeographic.com/news/...

Comment edited by administrator Ryan on 2016-02-12 09:38:01

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By Crispy (registered) | Posted February 12, 2016 at 10:11:47

1: I politely asked the author for the study. Apparently you find this "ordering". 2: I asked the author. Not some random person on the internet. 3: I asked the author and was hoping that the author would respond. Not you. 4: You sarcastically chide me for asking for "easy-to-find information", then provide me with information that I didn't ask for. A link to an article about the study, is not the study.

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By wolf! (anonymous) | Posted February 14, 2016 at 01:07:29 in reply to Comment 116504

unfortunately for you, i guess your reputation precedes you

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By ergopepsi (registered) | Posted February 12, 2016 at 12:02:25 in reply to Comment 116504

It didn't come across as you asking politely. Sounded more like a prickish / sarcastic reply.

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By Stephen (anonymous) | Posted February 12, 2016 at 10:52:44 in reply to Comment 116504

The study was in Nature, so he can't link to it directly. You could buy a subscription. The National Geographic article seemed like a good synopsis.

The press release for the study has contact information for the actual researchers; maybe they'll speak with you (I'm not kidding- who knows).

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By z jones (registered) | Posted February 12, 2016 at 10:16:57 in reply to Comment 116504

  1. Stop trolling. 2. Stop trolling. 3. Stop trolling. 4. Stop trolling. The planet is cooking and you're playing silly games on the internet. Don't do that.

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By Crispy (registered) | Posted February 12, 2016 at 10:57:18 in reply to Comment 116505

Oh and by the way, please provide a link to the study that proves that the "planet is cooking."

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By z jones (registered) | Posted February 12, 2016 at 12:59:29 in reply to Comment 116508

The oil industry thanks you for your shenanigans. Future generations, not so much.

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By Well (anonymous) | Posted February 12, 2016 at 18:50:08 in reply to Comment 116510

Well, since you and I will not be here in 50 years to see if you are correct, easy for you to say.

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By Crispy (registered) | Posted February 12, 2016 at 10:51:22 in reply to Comment 116505

So asking an author on this site for further information is trolling? That's odd considering in the Submissions section of this site is says:

Where applicable, cite sources for verification

See what I did there? I used a citation for verification.

Furthermore, the RTH User Agreement states

We invite you to share your commentary, particularly if your comments enhance, amplify, clarify, correct, or otherwise contribute to the totality of facts and arguments that enable citizens to participate more meaningfully in civic issues.

All I asked for was a further contribution to the totality of the facts. Based on your response I'd say you'd rather have an echo chamber than a discussion.

Comment edited by Crispy on 2016-02-12 10:51:43

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By Here's the thing (anonymous) | Posted February 12, 2016 at 18:53:13

Canada is a resource economy. Most of our social welfare is paid for by the sale of resources (as most of our income is derived from resources.) Net - I mean net - the resource industry brings in billions of dollars to the Canadian economy monthly. If you want to strip it and reduce GDP and therefore taxes etc., you must be prepared to live with the consequences.

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By Here's the thing (anonymous) | Posted February 12, 2016 at 18:54:18 in reply to Comment 116513

Not most - should have said the largest single portion.

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By KevinLove (registered) | Posted February 12, 2016 at 19:29:19 in reply to Comment 116514

About 10 seconds with Google was enough to establish that the #1 source of government income is income tax.

Comment edited by KevinLove on 2016-02-12 19:30:30

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By Here's the thing (anonymous) | Posted February 12, 2016 at 20:00:11 in reply to Comment 116515

Where do the people get the income to pay the tax? Y=C+I+G+X-M Google it. National income from which taxes derive comes from where?

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By KevinLove (registered) | Posted February 12, 2016 at 19:36:42

"rich countries" - including ours - "are subsidizing oil, gas and coal companies by about $88 Billion US per year to explore for new reserves.

Kevin's comment:

And that's just subsidies for exploration for new reserves. Total G20 fossil fuel subsidies are over $450 billion.

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By DowntownInHamilton (registered) | Posted February 13, 2016 at 01:11:08

Perhaps we shouldn't subsidize any industry and let capitalism figure out who's best at business?

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By GWW (registered) | Posted February 13, 2016 at 09:48:43

I would question whether there are any subsidies in Canada for the Oil and Gas Sector. If so review a financial statement of a major oil and gas firm in Canada and identify the subsidy, or better yet, identify the specific rulings within the CRA rules that identify the subsidy. They are not there.

Definitions of what is subsidy may be an issue.

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By kevlahan (registered) | Posted February 13, 2016 at 14:05:41 in reply to Comment 116522

The subsidies are in the form of tax breaks for exploration, investment and other business activities. Some of these are even specific to the oil and gas or mining industries.

Here's a National Post discussion of the debate over whether the fossil fuel industry is subsidized or not.

http://www.nationalobserver.com/2015/09/...

Those who claim it is not subsidized don't want to count tax breaks as subsidies, even though most people would understand tax breaks on something as a way for government to encourage it by reducing its cost (i.e. a subsidy). And even the WTO defines tax breaks as subsidies!

And here's a list of some of these subsidies (in the form of tax breaks):

Canadian Development Expense ($478 million), Canadian Exploration Expense ($233 million), Accelerated Capital Cost Allowance ($300 million), Investment Tax Credit ($100 million), and Liquefied Natural Gas capital cost allowance ($50 million).

Federal and provincial governments could legally exclude the fossil fuel industry from these tax credits if they wanted to eliminate public subsidies from the fossil fuel industry. For example, the mineral exploration tax credit explicitly excludes the oil and gas industry (as well as coal).

Comment edited by kevlahan on 2016-02-13 14:34:15

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