It appears that the Legault government is juggling the possibility of put an end to oil and gas exploration in Quebec. The signal would be a message “consistent with the reality of 2021”, in a revival that we want as green as possible, with the electrification of transport as a cornerstone, with the objective of “carbon neutrality” by 2050. “We can see that the future in Quebec is not in the exploitation of gas and oil”, according to a statement by the Minister of Energy and Natural Resources, Jonatan Julien, resumed through The duty.
You have to be in tune with the times and with climate reality. This reflection of the government is in tune with the times, an advance by Quebec in oil and gas development would also be a misunderstanding. The International Energy Agency, to which we have long attributed a fossil bias, was not without astonishment on May 18 with his punchy plea calling for the abandonment of any new project for the exploration and exploitation of fossil fuels and the interruption of sales of new combustion vehicles beyond 2035, all while being the apostle of massive investment in development renewable energies.
In addition, in an article published in the journal Nature, scientists have just indicated that nearly 60% of oil and gas reserves must remain in the ground to limit warming to 1.5 degrees by 2050. In a recent text from To have to, one could read that these researchers estimate that, by 2050, 90%, of the known reserves of coal must imperatively remain in the ground, but also 60% of the reserves of oil and natural gas. Canada should give up on no less than 84% of its oil sands reserves. However, as soon as the first winds of this reflection of the Legault government blew, loud cries were launched, borrowing from this good old approach in classical economics of focusing on the opportunity cost.
For Miguel Ouellette, economist and director of operations at the Montreal Economic Institute (MEI), “this government decision is completely irresponsible and harmful for Quebec”. According to his estimates, “the exploitation of our natural gas could create 9,200 jobs, increase our GDP by $ 93 billion and generate $ 15 billion in tax revenues over a 25-year period. […] Demand will increase by 9% by 2045 for oil and 29% by 2040 for natural gas. Why then deprive us of these opportunities? ” he asks. And the MEI economist to add: “It is also foolish to believe that this would have a real impact on the reduction of global greenhouse gas emissions, especially with the rapid increase in these in the emerging countries like China and India. […] For purely illustrative purposes, we can estimate that it only takes 14 hours and 53 minutes for China to cancel all of Quebec’s reduction targets between 1990 and 2020. ”But nothing in this argument on negative externalities. Nothing either on the environmental impact, the carbon footprint, the legacy to future generations, the economic profitability, but also social, of the development of this sector. It has become reductive, this econometrics prioritizing immediate enrichment and cushioning future impoverishment over the long term.
We can certainly talk about the oil and gas deficit in Quebec, but it has been more than 35 years that we have been calculating the potential of the St. Lawrence without a viable large-scale commercial opportunity having emerged. While there is the presence of relevant geological formations, the evidence of extraction for commercialization still remains to be proven – especially since we are dealing with essentially unconventional oil and gas, which involves a low recovery rate. In addition to this still absent or deficient demonstration, there is a list of considerations linked to the vulnerability of operating sites, environmental risks and the reliability of extraction techniques. And if the economic feasibility were to be demonstrated, it would then be necessary to integrate into the model the infrastructure for the extraction, transport, transformation and recovery of residues and waste that the operation would require. Not to mention the collateral damage to the environment and, where applicable, the creation of huge tailings ponds. Added to this are the risks associated with transport, primarily by pipeline, but increasingly by rail.
On September 9, as part of a videoconference on the energy transition in the Middle East and North Africa, the Minister of Energy and Mineral Resources of the Sultanate of Oman returned to the recommendations of the IEA, warning that, “if we abruptly stop investing in the fossil fuel sector, then there will be an ‘energy starvation’ and energy prices will jump.” “The demand for oil and gas could well drop, but in the short term we could see a scenario of 100 or 200 US $ per barrel”, one reads in a text of AFP.
Could it be that this price surge is instead accelerating the shift in demand and investment towards renewable energies?