Nfld. & Labrador·Weekend Briefing

Why 'carbon capture' is a phrase that Seamus O'Regan is focusing on right now

Federal Finance Minister Chrystia Freeland used the word "green" repeatedly in her first budget speech. But as John Gushue writes, the oil industry is not being phased out but is instead being asked to change how it does business.
Natural Resources Minister Seamus O'Regan speaks to media during the second day of the Liberal cabinet retreat at the Fairmont Hotel in Winnipeg in January 2020. (Mike Sudoma/The Canadian Press)

If you live through enough political budgets, you come to realize that what's revealing is often not just what's said out loud in a budget, but what is not mentioned at all.

When Chrystia Freeland rose in the House of Commons on Monday to deliver her first budget, the magic missing word was "oil."

She might not have said it out loud, but it was definitely on her mind — but not in the way that oil-producing provinces might appreciate. By contrast, she used the word "green" no fewer than nine times.

"We are at a pivotal moment in the green transformation. We can lead, or we can be left behind," said Freeland, who also championed "Canada's green transition and the green jobs that go with it," citing "this moment of global transformation to a green, clean economy."

Not that oil is out altogether. Environmentalists were dismayed that the budget's rhetoric was not that transformative, as the budget champions carbon capture incentives for large oil companies as a way for Canada to meet its emissions targets.

Carbon capture and storage is, to say the least, controversial. The idea is to catch emissions at places like smokestacks and get them out of the atmosphere, by storing them underground in massive geological deposits. You may remember that when fracking was a hot-button issue, a knock against that method of extraction was that it could harm storage efforts. (The issue is explored in this 2016 report by the Hydraulic Fracturing Review Panel.)

More recently, many researchers have questioned how effective such methods can actually be; to some, carbon capture is basically kicking an environmental problem down the road. However, Freeland's speech also shows that a solution that had been considered too expensive to implement is now in play.

On the agenda

In Newfoundland and Labrador, we haven't been talking much about carbon capture, which has to date largely been a focus in Alberta and Saskatchewan.

Natural Resources Minister Seamus O'Regan, who is also N.L.'s federal cabinet representative, would like it to be on the agenda here, too.

"We are on the cusp of doing a lot of these things," O'Regan told reporter Peter Cowan earlier this week. O'Regan added, "There's nothing that consumes more of my time thinking about oil and gas workers and energy workers in this province and in Alberta and Saskatchewan."

WATCH | Seamus O'Regan on carbon capture, 'retooling' and budget impacts: 

Seamus O'Regan on why keeping oil workers in the industry will help energy transformation

CBC News Newfoundland

3 months ago
Federal cabinet representative tells CBC's Peter Cowan what's in the new budget for N.L. 4:28

Carbon capture technologies aren't exactly something you can order from Amazon. "I lead a department of scientists who are looking at things like carbon capture and storage, both onshore and offshore," said O'Regan.

The oil industry means a lot to Newfoundland and Labrador, and not just in terms of the royalties and revenues the government collects. It has become a major employer — both directly through the fields offshore (and the onshore companies that service them) and through the rotational workers who commute out west, largely to Alberta's oilsands camps.

The last year has been, to be sure, a challenging one for the oil industry, where prices collapsed as the COVID-19 pandemic took hold. Prices have rallied quite a bit since. Brent crude, the type of oil that the Newfoundland and Labrador government tracks for its own budget, was trading at the end of the week around $65 US. (It's worth noting that last September's pandemic budget pegged Brent to trade at an average of $39 US for the fiscal year.)

Things are far from being back to normal in N.L.'s offshore industry, of course. Freeland's budget speech telegraphs the messaging that a green change is happening.

But a closer reading shows that the "transformation" will likely involve both production and measures that mitigate the environmental costs of extracting petroleum.

Freeland tells MPs the budget will invest in green energy

Politics News

3 months ago
Federal Finance Minister Chrystia Freeland delivered her first budget on Monday in the House of Commons. 0:27

O'Regan indicated that the clock is ticking, at least in terms of not losing the skilled workers who have relied on the industry for their careers.

"We can't afford to lose count," he said.

"I got to make sure that oil and gas workers stay in the game because we need them in the long haul, to lower emissions [and] to build renewables."

The federal Liberals stand to be accused of wanting to have its cake and eat it too: in other words, engineering an energy transformation while enabling the conventional oil industry to continue extraction. 

While that debate heats up, expect carbon capture and storage to emerge as a key issue for politicians, policy makers, energy workers and, well, all of us. 

Read more from CBC Newfoundland and Labrador


John Gushue

CBC News

John Gushue is the digital senior producer with CBC News in St. John's.

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