Letters
Coalbed Methane
Shell game
In an open letter to Shell Energy Canada, I asked how the company can qualify its Klappan coalbed methane project as “sustainable development.” The company responded, saying, “Shell operates its business in accordance with its commitment to sustainable development.”
Unfortunately, merely making a statement like this does not make a project sustainable. A non-renewable resource is, by definition, not sustainable. The only way it could have some form of sustainability would be if royalties were substantial and/or invested into a renewable form of energy. Norway turns its oil into an opportunity for the future by having so far set aside $368 billion, since 1990, in its “heritage fund.” Alberta’s paltry fund, established 14 years earlier, only stands at $16 billion because of the minuscule one percent royalties the companies pay—and this only after their capital costs are paid off.
Compare this to the 78 percent of their profits that private oil companies must hand over to the Norwegian government, and it is easy to see why Canada is not heading for sustainability.
Shell has stretched the concept of sustainable development so much that it was rebuked earlier this year for “greenwash” by Britain’s Advertising Standards Authority (ASA), for a full-page ad it ran in the British newspaper The Financial Times. The ASA said the company should not have used the word “sustainable” for its controversial tar sands project and a second scheme to build North America’s biggest oil refinery. Both projects would lead to the emission of more greenhouse gases, the ASA said, ruling the ad had breached rules on substantiation, truthfulness and environmental claims.
Shell’s claim to the sustainability of the Klappan coal bed methane project is equally untruthful.
The Brundtland Commission’s 1987 report, that introduced the concept of sustainable development, defined the term as “development which meets the needs of the present generation without compromising the ability of future generations to meet their own needs.”
Here is a big problem: 60 percent of Canadian natural gas has to be exported to the USA (under proportionality clause 19 of NAFTA). Although Shell claims that the open energy market is unrestricted by quotas, and that there is no fixed percentage of Canada’s energy production required to be sold to the US, things are far worse than Shell makes it sound. Although not actually a “fixed” percentage, our current share of energy exports to the US must be maintained, even if Canadians experience shortages, and cannot go below the rate of export of the last 36 months.
As reported in Over a Barrel by Gordon Laxer and John Dillon, “Currently, Canada is obligated to make two-thirds of its domestic oil production and 60 percent of its current natural gas production available for export to the US.” There is also nothing to prevent that proportion from going higher. “Canada could be prevented from providing its own oil to its own citizens in an international oil shortage.”
By its failure to be able to provide for the present and future energy needs of Canadians, the Klappan coalbed methane project fails the sustainability test again.
Add to all this the facts that Canadian natural gas production peaked in 2002, and that enormous quantities of natural gas are used to extract oil from the tar sands (1200 cubic feet of natural gas are required for the extraction of just one barrel of oil), and the picture looks even bleaker.
Shell’s assurance that CBM extraction in the Klappan is a sustainable endeavour is indefensible. Further, the purported “free market” Shell would have us believe in could very possibly leave Canadians to freeze in the dark.
Josette Wier
Smithers
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