Business·Analysis

Big Oil vs. Big Auto: Who gets the easy ride on climate change?

Canada's oil industry would sure love to receive the same level of support the country's auto sector receives, especially as decisions by politicians over the next few years will have a vitally important influence on the oilpatch's future.

Do we let automakers off easy for contributing to greenhouse gases?

Some environmental groups admit they target the oil industry compared to other causes. 'We can have low-carbon vehicles, we can't have low-carbon oil,' says Keith Stewart of Greenpeace Canada. (CBC)

Originally published June 24.

Canada's oil industry would sure love to receive the same level of support from Canadians that the country's auto sector receives. Especially as decisions by politicians over the next few years will have a vitally important influence on the oilpatch's future.

Governments and regulators will have to decide whether to approve two export pipelines, of which the outcome is about as difficult to predict as the recent Brexit vote in Europe. 

It's a question of whether you want to be poor. It's a pretty relevant question. I think most Canadians understand the wealth that is generated from the energy sector.- Robert Cooper, Acumen Capital

The oilpatch doesn't want a subsidy or bailout, but it does want the level of goodwill from politicians, support from Canadians and minimal encounters with environmentalists that the country's auto sector enjoys.

The argument goes like this: The vast majority of Canadians burn gas or diesel every day in their cars and trucks, but they aren't all labelled "dirty." Somehow, auto manufacturers seem to avoid the label that plagues the oil industry, even though about 80 per cent of the emissions from a barrel of oil come from the combustion. Energy companies extract the oil, pipelines carry it, and drivers burn it. 

So let's ask the question — is the oil industry treated unfairly?

Higher standard

The feeling of unfairness has come up most recently with the federal government adding new environmental regulations on proposed export pipelines, which extended the process of evaluating Kinder Morgan's Trans Mountain and TransCanada's Energy East projects.

The policy includes considering upstream emissions and further consultation with First Nations.

"What isn't fair and is quite foolish, is the additional, incremental burdens that are placed on the energy industry as opposed to opportunities in other sectors," said Robert Cooper, with Acumen Capital, a Calgary-based investment firm. 
Saskatchewan's premier speaks in Toronto and compares how we treat Big Oil to Big Auto 3:07

Cooper suggests an east-west divide is at play considering the oil industry is centred in Western Canada, while auto manufacturing is in Ontario.

"It's a question of whether you want to be poor," said Cooper. "I think most Canadians understand the wealth that is generated from the energy sector. I don't think most Canadians understand how that wealth is distributed to manufacturing jobs and other forms of employment further downstream in other parts of the country." 
The analyst with Acumen Capital questions why the oil industry is held to a higher standard compared to other sectors 0:39

Pointing the finger

Canadians have put much more importance on the environment in recent years. In fact, 71.7 per cent of Canadians think governments should take action to protect the environment even if it increases energy costs and hurts some industries, according to a recent CBC/EKOS Research poll.

"Right now people are hyper aware of the impacts of oil and petroleum. They are aware of the climate change effects," said Warren Mabee, director of the Institute for Energy and Environmental Policy at Queen's University, in Kingston. "Pipelines have been saddled with that whole negative impact."

Mabee notices a disconnect in society around climate change. People are less likely to associate cars with climate change, compared to oil production, pipelines and fracking.

"People are now thinking 'we need to slow these projects down,' but at the same time they don't want to give up all the things the oil industry has given them," he said. 
The head of CAODC says Canadians should be proud of having a resource-based economy 1:25

Protesting Big Oil

At least one environmental group in Canada admits to spending much more time focused on the oil industry compared to other causes. Greenpeace Canada says it's because it can have more of an impact that way.

For instance, Greenpeace works internationally on reducing aviation emissions and in the U.S. for reduced auto emission legislation

In Canada, there are campaigns to reduce auto emissions and promote improved public transit, but they don't receive as much media attention.

"Oil and gas emissions are the largest source of emissions, higher than all tailpipe emissions in the country. And they are also the fastest rising source of emissions. So they are the biggest problem in Canada and the one we really have to face," said Keith Stewart, with Greenpeace Canada.

The argument behind not protesting outside a GM plant in Oshawa, Ont., or a Bombardier facility in Saint-Laurent, Que., is that environmentalists see a future for those industries.

"We can have low-carbon vehicles, we can't have low-carbon oil," said Stewart.  

Who is to blame?

If the oil industry is unfairly treated, it has to accept some of the blame. It's often associated with tailings ponds and massive oilsands mines, while auto plants can conjure images of high-tech tools and, most importantly, workers.

"I don't think the industry has done a particularly good job of humanizing the production side, the development side," said Mark Scholz, president of the Canadian Association of Oilwell Drilling Contractors.

The oilpatch is spending millions to repair the image. Just about every ad campaign includes faces of workers.

Meanwhile, the industry could promote itself as a high-tech sector and combat any stereotypes that it is stubborn and unwilling to change.

Industry boosters point out that even during the current downturn, about 250 research projects are continuing in the oilsands alone. 
Protesters at an event in Burnaby, B.C., chant, 'Leave it in the ground, leave it in the ground,' in opposition to the Trans Mountain pipeline. (CBC)

Future of oil

Canada will be an oil-producing country for decades to come, but the decisions on the Trans Mountain and Energy East pipeline proposals, in particular, are critical.

"I think if we get this right, Canada will position itself to take advantage of billions of dollars of global investment," said Scholz. "We can also get things wrong." 

There are ways to level the playing field among all sectors. Broad-based carbon pricing systems, like the one in B.C., place the burden on everyone who emits carbon.

In addition, every large government decision should consider climate change, whether it's the Energy East pipeline or an investment in Bombardier, says Mabee, with Queens University.

"Every new piece of government spending, one billion dollars is a big piece, should be subject to an environmental test, and the environmental test should say that you will not add to the emission burden, that we won't make the problem worse."

Slowly, he says, we have to admit the country's climate problem isn't just the oil industry's fault. The problem is how people use energy lavishly in their daily lives. Such an admission is not easy, he says, but society has to come around. 
(CBC)

About the Author

Kyle Bakx

Reporter

Kyle Bakx is a Calgary-based journalist with CBC's network business unit. He's covered stories across the country and internationally.

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