All eyes on the federal government in this conversation between Michael Binnion, Ed Whittingham, Shannon Stubbs and others.
From right to left: Michael Binnion, Ed Whittingham, Éric Duhaime, and Clint Thomas at the 2023 Canada Strong and Free Network conference. Photo supplied.
It’s an occasion. Your Russian cousin is in town and you’re enjoying a drink. Only this brew isn’t from the motherland, and it’s made from captured carbon.
In a small emerging market of carbon-negative products, Air Vodka is a successful example of how some hope to turn carbon emissions from Canadian energy producers into products on the shelf. Every bottle of Air Vodka removes a pound of greenhouse gas otherwise released into the atmosphere. With water and CO2 as the only ingredients, the company says that makes it the world’s first carbon-negative spirit. Will others join it, and will more entrepreneurs find other ways to harmonize emissions reduction with the free market?
In a panel on free-market energy solutions hosted by the Canada Strong and Free Network on March 25th, panellists considered a host of issues and opportunities affected by existing environmental and industrial policy.
"You can make anything out of CO2," said Michael Binnion, president of Questerre Energy. “Why aren’t we?”
Ed Whittingham, formerly of the Pembina Institute, picked up the thread. The current mix of federal regulatory and taxation regimes isn’t working, he said. The result? “We’re not seeing big capital moving into decarbonization” – or the carbon economy.
It’s a conundrum for industry, said Whittingham. Major investments in carbon capture, sequestration or utilization infrastructure (CCUS), for example, are simply less attractive in Canada compared to the US. There, an attractive policy and regulatory environment is being created for industrial decarbonization following the passage of the Inflation Reduction Act (IRA).
“I want Canada to participate in the jobs benefit, the know-how benefit – I don't want to see Canada fall behind," said Whittingham.
All eyes on are Tuesday’s federal budget, presented by Finance Minister Chrystia Freeland.
Clint Thomas of Bruce Power seconded Whittingham’s sentiments. The Ontario nuclear leader formed in 2001 under Premier Mike Harris is an example of free market energy solutions. It’s Canada’s first private nuclear generator, co-owned by TC Energy and unionized workers. In its short history, it’s racked up quite the list of accomplishments. The company has eight nuclear reactors, provides thousands of jobs and 30% of Ontario’s power. Right now, over 90% of its supply chain is based in that province. But, without federal action, that local opportunity might head south.
“Our supply chain can easily move across borders and go where there’s a better deal for them," said Thomas. That’s bad news for Canadian workers, entrepreneurs, and anyone concerned about the emissions reduction opportunities that could be lost without industrial development north of the border, from nuclear to other low or zero-carbon energy solutions.
“To get to this net zero concept… you need nuclear power. You need it because it provides energy with a smaller footprint than any other energy you have… it's reliable and clean… The proposition that nuclear brings is unparalleled.”
Global decarbonization efforts require much more low or zero-carbon energy than currently available, suggested Thomas. Canadian energy providers and consumers need a fulsome response from the federal government. Tax credits might be part of the solution, but cutting red tape is another.
"The regulatory process quiet frankly needs to recognize this,” he continued. “We need to be quicker and more nimble on that front."
For Whittingham, it all goes back to the IRA and reforming industrial strategy. There, a clean energy transition is pursued with a focus on carrots rather than sticks. It’s a stark contrast to policy in the great white north.
Nonetheless, Whittingham raises the point: the US energy transition is only possible because industry recognizes the bipartisan support behind the IRA. It provides investors with certainty that creates the business case for otherwise as-of-yet unprofitable developments. With Canada’s Conservatives indicating a radical departure from the current government’s policies, does industry have the certainty it needs to invest today?
“It's really the regulatory conditions domestically that makes [investors] see there's no business case," countered Shannon Stubbs, Conservative critic for natural resources. “It's a circular problem of the government's own making.”
“The uncertainty begins with the pancaking of regulations here in Canada,” agreed Binnion, referring to the problem of government layering regulations upon regulation, creating a nearly incomprehensible (and exceedingly costly) path to decarbonizing Canada’s economy.
In his closing words, Binnion called upon Canadian policymakers to harmonize with American counterparts.
“We should do everything we can to reduce our emissions, but there's 98.4% of emissions out there that we can reduce by getting our products out there.”
Josiah Haynes is Resource Works’ director of content. Find him on LinkedIn and Twitter.