Methane emissions are underrated at one third of global warming gases, largely because fossil fuel sector methane emissions are underestimated by 70 percent. Current data indicates the energy sector accounts for 40 percent of man-made methane. Consequently, the COP26 non-binding pledges of over 100 nations for a 30 percent reduction by 2030 are not only dreadfully inadequate, but also, without standardized measuring, reporting and verification standards, oil and gas industry methane greenwashing is rampant. The draft European Union (EU) plan to reduce methane emissions up to 80 percent by 2030 zeros in on methane accountability norms and establishes transparent extraterritorial requirements to cover imports. The U.S. too, with the backing of the Inflation Reduction Act and the Bipartisan Infrastructure Law, now has the foundation for vigorous proposal to update its regulations and investments in methane reduction. Sadly, Canada’s methane ambitions procrastinate and are fuzzy. Lastly, stringent government actions would be less critical if the oil and gas industry applied existing technologies to capture fossil fuel methane and sell it for a net profit.
Green hydrogen, produced with electrolysers to separate hydrogen from water, uses clean energy as a power source. Green hydrogen will not be with cost competitive with grey hydrogen for some time, perhaps not until 2030. Grey hydrogen, derived from steam reformation of natural gas, represents 98 percent of global hydrogen consumption, and is primarily used for industrial processes. To replace grey hydrogen with green hydrogen would require a doubling of global electricity generation with primarily solar and wind sources, pre-empting the use of renewables for electrical power. This would necessitate more use of natural gas for power production. And there are extraordinary inefficiencies and technological challenges for green hydrogen, while there is no shortage of affordable and efficient clean technologies alternatives. Nevertheless, US$30 billion has been committed to-date for green hydrogen through government stimulus packages. Is green hydrogen a fossil fuel industry trojan horse for gas derived hydrogen and the use of gas for electrical power?
The global natural gas industry, including that of Canada, has high hopes for weaning Southeast Asia from coal dependency. Concurrently, low-cost renewables are swiftly changing the electrical power landscape in this part of the world. Vietnam, caught in the squeeze between the two competing types of power sources, is favouring a clean energy metamorphosis. The country now has the greatest installed solar energy capacity in Southeast Asia. Government policies are both supportive and handicaps. Grid infrastructure is woefully insufficient. International support is critical to solidify the transition to clean energy.
If present trends continue, transportation will be the Canadian largest source of greenhouse gas emissions by 2030. Canada’s objective for a legislated 2035 zero-emission vehicle (ZEV) target for all new light duty models is too little, too late. Canada can adopt incremental legislative objectives between now and 2035, much like what the European Union and China have done. The latter jurisdictions may reach 50% ZEVs, mostly electric vehicles, by 2025. Just as automakers can adjust to safety regulations while offering vast lineups of trendy vehicles, they can do the same with Canadian ZEV regulatory mandates.
BlackRock, the world’s largest investment firm, has indicated that those that don’t tackle climate change will lose money in 5 years. Some financial institutions have made multi-trillion commitments from now to 2030 to invest in the green economy while still focusing the majority of investments in fossil fuels. Canadian banks are among the global top fossil fuel investors.
Not all Big Oil firms are alike. Some are engaged in a rapid green migration, many are sitting on the fence and others are still in climate denial. Meanwhile, the value of fossil fuel assets are declining but the industry is camouflaging this by selling assets and debt financing to keep shareholders happy.