NEUFELD: A shocking reality check

From The Senate

neufeldHere we go again: more irresponsible climate change promises from world leaders.

Last week while in Ottawa, the Three Amigos—Prime Minister Trudeau, US President Obama and Mexican President Peña Nieto—promised to make North America’s electricity generation 50% clean by 2025.  They vow to “accomplish this goal through clean energy development and deployment, clean energy innovation and energy efficiency.” 

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I welcome this announcement, but I feel this goal may be unachievable in such a short timeframe. Needless to say, I continue to be puzzled by governments who constantly over-commit themselves to very ambitious greenhouse gas emission reductions.

At the outset, I think it’s important to remind all Canadians that Canada has much to be proud of with respect to its electricity generation. Statistics from Natural Resources Canada’s Energy Fact Book shows that 79% of our generation is from non-GHG emitting sources, second only to France in G7. In my view, Canada has to do a better job of promoting its stellar long-standing record. I wish environmentalists would recognize this impressive achievement.

Meanwhile, our two NAFTA partners have nearly the exact opposite record.  About 67% of the electricity generated in the US in 2015 was from fossil fuels. Power plants using fossil fuels provided 78% of Mexico’s electricity capacity and generation in 2014.  Clearly, the Three Amigos’ new announcement targets Mexico and the United States, not Canada. Don’t get me wrong, Canada can play an important role in helping the US clean-up its electricity by providing them clean power from such provinces as British Columbia, Manitoba or Quebec.  These provinces have had existing interties with the American grid for decades.

Furthermore, greening the electricity grid cannot be done overnight. It takes years to approve any project these days with the application process and regulatory approvals, not to mention the widespread consultation and so-called social licenses required to move forward. You can’t suddenly clear some land and install wind turbines or solar panels and say Voilà!  Even green projects are often met with resistance.  And many fail to remember that the wind doesn’t always blow and the sun doesn’t always shine. Canadians, indeed North Americans in general, need firm and reliable electricity.  Wind and sun can’t provide that certainty so you always need baseload generation.  Despite what Prime Minister Trudeau may think, his “sunny ways” don’t apply here.

I honestly don’t see how Mexico and the United States will reach their ambitious target in less than a decade.  If they do, how much will it cost?  Of course, no one dares to tell us how much greening the electricity generation in North America will actually cost Fred and Martha—the average ratepayers and energy end-users.

The Senate of Canada’s Committee on Energy, the Environment and Natural Resources, which I chair, is currently conducting a study on transitioning to a low carbon economy by looking at various sectors including electricity. During our hearings, we heard from a representative from NB Power, New Brunswick’s primary electrical utility, who told us that if its coal plant was to retire ahead of its scheduled 2043 retirement date, it would result in a rate increase of approximately 39 per cent, in addition to other planned rate increases. As he put it, this increase “would have a devastating impact on NB Power’s customers and the New Brunswick economy.”

Moreover, according to a 2012 Conference Board of Canada report, $350 billion must be invested in Canada’s electricity system from now until 2030 to modernize it, clean it and meet growing needs.  Imagine what the cost might be in a country like the United States whose population is 10 times the size of Canada’s or like Mexico with almost four times our population. As an energy end-user, I can’t help but wonder how much that will actually cost me. It goes without saying that, in the end, the consumer will likely have to foot the bill through electricity rate increases.

Of course, it was easy for President Obama to commit to greening his country’s electricity: he’s leaving office in less than six months. His pursuit for a greener economy will be left for someone else to implement.  And to no surprise, the Three Amigos failed to put forward the financial cost of achieving this target when it released its multi-page “Leaders’ Statement on a North American Climate, Clean Energy, and Environment Partnership.” Lots of fancy words and big sentences, but no price tag! Yet again, we are left in the dark. 

In the long run, we may not even be able to afford getting out of the dark and turn the lights on. It’ll be too expensive.



The Honourable Richard Neufeld is a Senator for British Columbia. He is Chair of the Senate Committee on Energy, the Environment and Natural Resources and a member of the National Finance Committee. Prior to his appointment to the Senate in 2009, he served in the British Columbia Legislative Assembly from 1991 to 2008 as MLA for Peace River North. He was Minister of Energy, Mines and Petroleum Resources from 2001 to 2009.

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