Researchers call for a public inquiry into subsidies for oil sands production
and Alberta’s post-carbon future
For many decades, the fossil fuel industries have benefited from billions of dollars in public subsidies for technology development intended to allow them access to new reserves and lower their costs of production. These subsidies take many forms, such as capital cost allowances, exploration tax credits, research and technology development tax credits, or direct government financing of research & development (R&D) (e.g., through university-industry partnerships, research infrastructure, or grants to corporations). An example often given of such R&D expenditure is the Alberta Oil Sands Technology and Research Agency (AOSTRA), funded by the provincial government from 1974 to 2000 to the tune of $620 million.
The oil industry, led by the Canadian Association of Petroleum Producers (CAPP), has been proposing a “new AOSTRA” that will be dedicated to developing lower-environmental-impact technologies for bitumen extraction, thereby helping the oil sands producers to continue expanding production. These technologies will—or so it is hoped–allow oil sands companies to increase the barrels of oil produced, along with overall greenhouse gas emissions, while remaining within the emissions intensity limits set by provincial regulators. (See Alberta Climate Change plan for more information about the use of GHG emissions intensity targets for large emitters.)
On July 7, 2017, Emissions Reduction Alberta (Climate Change Emissions Management Corporation) announced a $50 million fund for the development of oil sands extractive technologies. This kind of public funding of R&D for corporations operating in the oil sands raises many questions concerning ecological sustainability and the public interest.
Citizens have had no opportunity to examine the full range of risks, costs, and benefits related to ongoing government investment in oil sands development or the alternative uses of public revenue.
Citizens must have the opportunity to consider the risks associated with this path, as well as the alternative means to achieve such goals as stable government revenue to provide for public goods, secure, ecologically-sustainable livelihoods, and a high quality of life for all Albertans.
There are questions to which citizens must have answers:
- Weighing further investment in bitumen extraction against other uses of public revenue, what kind of investment would create the largest number of good, ecologically sustainable jobs for Albertans?
- In lieu of the promised royalties from bitumen extraction, what other sources of revenue could the Government of Alberta rely upon in future to finance the public goods and services that Albertans need?
- What assumptions are the CAPP’s estimates of future jobs and royalty revenues based upon, and how reliable are these assumptions?
- What uses of the knowledge and resources of our post-secondary education institutions best serve the public interest of Albertans—now and for future generations?
- What are the environmental risks associated with the large-scale use of solvents and other methods of bitumen extraction that a “new AOSTRA” would be tasked with developing?
- Should our government be further subsidizing expansion of an industry which, according to all credible scientific evidence concerning global warming, should be phased out and replaced by reduced energy consumption and by renewable sources of energy?
- What is the risk to our children and grandchildren that the oil sands will become a “stranded asset,” leaving Albertans with enormous environmental clean-up costs?
- What is Alberta’s “fair share” of greenhouse gas reductions given the remaining carbon budget for Canadians?
- Is further expansion of oil sands exploitation acceptable to Alberta’s indigenous peoples—particularly those who live closest to, and downstream, of the mines, industrial sites, and in situ extraction sites?
- How can Alberta move as quickly as possible toward a post-carbon economy that does not discount the off-shoring of our GHG emissions to other jurisdictions but offers all Albertans a high quality of life?
The signatories to this letter call upon the Government of Alberta to hold a public inquiry that provides answers to these questions and permits the meaningful involvement of informed citizens in the decisions that will be taken regarding our province’s future path of development.
In the absence of such an inquiry, and an opportunity for citizen deliberation, we reject as illegitimate the dedication of ERA funds to new oil sands technologies, as well as any other investment of public revenue in research and technology development linked to the expansion of bitumen extraction.