Gattinger: On Energy, Roadmap For A Renewed Canada-U.S. Partnership Is Incomplete

In the first meeting between U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau, the two leaders unveiled an ambitious Roadmap for a Renewed U.S.-Canada Partnership. This is welcome news after years of dwindling federal attention to the bilateral relationship.

The roadmap lays out a bold set of commitments on everything from pandemic response to climate change to defence and security. It makes commitments to collaborate on a number of energy issues. But the document is all but silent on a range of pivotal topics, including energy security, oil and gas, nuclear, hydrogen, and carbon capture, utilization and storage (CCUS). 

This is unfortunate. There are rich opportunities for collaboration in these areas. And omitting them from the bilateral agenda could compromise achieving the very ambitious objectives laid out in the roadmap.

Can we go from ‘some of the above’ to ‘all of the above’ on energy? Maybe.

Let’s start with what's in the roadmap.

The document is divided into six sections: combatting COVID-19, building back better, accelerating climate ambitions, advancing diversity and inclusion, bolstering security and defence, and building global alliances.

Energy is mentioned in a number of places, but mostly in the segment on climate. This section begins with the two leaders committing to ‘strengthened implementation of the Paris Agreement, including by working together and with others to increase the scale and speed of action to address the climate crisis and better protect nature.’

This commitment anchors the objectives, measures and bilateral initiatives that follow. Increasing climate ambition and targeting a net zero industrial transformation are key objectives. They are supported by collaboration on things like zero-emissions vehicles, battery and renewable storage technologies, and climate-related financial risk disclosure. 

The leaders also commit to working together internationally to encourage others to achieve net zero emissions by 2050. Interestingly, they say they will protect Canada and the U.S. from ‘unfair trade’ by countries without strong climate measures. This signals interest in developing a border adjustment tax for North America, something that deserves close attention.

Nowhere does the document discuss hydrogen, nuclear or CCUS explicitly. Oil and gas and energy security, for their part, get passing attention.

Take oil and gas. The one mention of oil and gas is working together on methane emissions. This is important, but it is an awfully narrow collaboration agenda for two major oil and gas producing countries.

Thanks to the shale revolution, the U.S. is now the world’s largest oil and gas producer. Canada is the fourth largest producer of oil and gas, the third largest oil exporter, and the sixth largest gas exporter. We have the third largest proven oil reserves in the world, the largest of any western industrialized democracy.

For Canada and the U.S., two countries with ambitious climate commitments and large hydrocarbon resources, successfully navigating the energy future is one of the most challenging but critical policy issues. Key to addressing it will be reducing emissions in the oil and gas sector.

Yet all we get in the roadmap is methane management. Yes this is important, but equally if not more important is CCUS, as well as developing new products like hydrogen. The Biden campaign platform explicitly mentioned CCUS and hydrogen, and federal and provincial governments in Canada are active in these areas. Ottawa released a national hydrogen strategy late last fall.

Oil and gas competitiveness will increasingly hinge on cost and carbon performance. Why not a North American approach to this, including joint work on environment, social and governance indicators, as well as measurement, verification and monitoring of the carbon intensity of oil and gas products, notably those for export?

If done right, this could pave the way for Canada and the U.S. to collaborate internationally on emissions credits through Article 6 of the Paris Agreement.

Crucially, collaboration on mitigation technologies for oil and gas supports development and application of these technologies to other sectors. CCUS will be needed to reduce emissions in hard to abate sectors like cement, steel, and chemical manufacturing. Likewise, work to develop the technologies and supply chains for a hydrogen economy extends beyond ‘blue’ hydrogen (produced from natural gas with CCUS) to ‘green’ and ‘pink’ hydrogen (produced from renewable electricity and nuclear power).

On nuclear, it was surprising there was no mention of co-operation on small modular reactors (SMRs). SMRs were part of the Biden campaign platform, and Ottawa and the provinces have been highly engaged on SMRs in recent years. Ottawa released an SMR action plan last fall and multiple provinces have committed to work together to develop the technology.

Energy security, for its part, is only mentioned once. It appears in the section on building back better in very general terms that note the ‘important economic and energy security benefits of the bilateral energy relationship and its highly integrated infrastructure.’ There are no specific measures to enhance energy security beyond a commitment to implement a collaboration framework for cybersecurity.

This is disappointing. Energy security — whether affordability, reliability or availability of energy — is easy to take for granted but it requires relentless attention to sustain. The deadly electricity blackouts in Texas made this painfully clear.

And yet, reliability, prices and affordability aren’t mentioned once in the roadmap. If we don’t get those right, it will be difficult to get climate action that sticks.

With growing electrification of energy systems and more frequent extreme weather events due to climate change, collaborating on electricity reliability and affordability is a big miss. So is collaboration on safety (think pipelines) and supply (think benefits of reduced North American reliance on OPEC and unstable suppliers).

Insufficient attention to energy security also makes it difficult to get traction in bilateral disputes over energy. The current showdown between Canada and the Governor of Michigan over Enbridge Inc.’s Line 5 pipeline is a case in point. Being able to point to high-level collaboration with the U.S. on energy security and pipeline safety would strengthen Canada’s position.  

The good news is that there’s room to build collaboration on all of these areas into the bilateral agenda.

Next steps announced in the roadmap provide the opportunity to do so, but time will be of the essence.

Chief among next steps is the new High Level Ministerial Dialogue on Climate Ambition led by Canada’s Minister of Environment and Climate Change Jonathan Wilkinson and U.S. Climate Envoy John Kerry.

It’s clear that the president and prime minister see the Dialogue as a privileged bilateral channel: the two ministers met the day after the leaders’ meeting. They announced that the Dialogue will have work streams on increasing shared climate ambition, aligning policies and regulations to address emissions and impacts, and collaborating on climate adaptation. The ministers committed to meeting twice yearly with early outcomes tabled at their second meeting in September. They are moving fast.

Another major milestone is coming up fast: the U.S.-hosted Leaders’ Climate Summit on April 22, where both countries are slated to announce increases to their climate ambition above existing Paris commitments.

Alongside these processes will be work to renew the memorandum of understanding on energy between Natural Resources Canada and the U.S. Department of Energy. The renewed MOU will target energy transition, ‘clean energy innovation,’ and low-carbon transportation. How these topics are defined remains to be seen.

The roadmap commits both governments to include Indigenous peoples, subnational governments, workers, and stakeholders in these processes. This is an important commitment given that previous initiatives like the Security and Prosperity Partnership were critiqued for lacking openness and transparency.

It is also a commitment that opens the door to broadening the agenda. Integrating energy and environmental objectives is necessary to successfully address climate change, to capitalize on North American energy opportunities, and to strengthen energy security. A comprehensive energy and climate agenda will also help sustain momentum on bilateral collaboration, something that previous initiatives have struggled to do.

With a Biden administration in power, Canada and the U.S. share many energy opportunities and challenges. Expanding collaboration to the full range of options is imperative — North America will need all of the emissions-reductions tools in the toolkit on the road to 2030 and 2050. Moving from ‘some of the above’ to ‘all of the above’ on energy will help both countries achieve the ambitious objectives laid out in the roadmap.

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