The UK and Canada must strengthen their energy relationship by increasing investment in tar sands and fracking, Department of Energy and Climate Change (DECC) energy minister Matthew Hancock said at today’s Europe-Canada Energy Summit in London.
“There remains great potential for deepening our energy relationship further, including delivering more British investment in Canada’s energy industry, or growing Canadian investment in the UK,” Hancock said.
“We want to see more British companies active in the energy supply chain across Canada,” he said, repeatedly pointing to opportunities in Alberta’s tar sands and Western Canada’s shale gas reserves.
This is necessary to ensure UK energy security, Hancock said, noting Europe “urgently needs to be less reliant on [Russia as a] single source of energy”. However, the UK only imports a small fraction of Russian oil and gas he said.
The minister’s speech comes just two months after the EU decided not to label dirty forms of oil such as tar sands crude as more polluting than conventional crude. This ensures oil companies will not have to account for the higher emissions of tar sands or shale oil, thereby allowing an easier flow of Canadian crude imports into Europe.
Hancock pointed to UK engineering company AMEC as a primary example of Britain’s contribution to Canada’s energy sector. AMEC has been involved in “virtually every major mineable oil sands development in the last 25 years”, he boasted.
Onshore shale gas production, or fracking, will also be a “personal and departmental” priority, Hancock said.
In fact, British energy company Centrica – one of the event’s sponsors – has been expanding its exploration and production business in Western Canada, investing over $1 billion (£638.4m), primarily in natural gas assets.
Western Canada is the main area of shale gas development – both Quebec and Nova Scotia in Eastern Canada have moved to ban fracking – but recent reports have warned there isn’t sufficient knowledge about the impacts of fracking to declare it safe.
And last February released documents showed fracking has become an “unregulated free-for-all” in Alberta, with “no regard for the impact on groundwater or on people’s health”, the Globe and Mail reported.
But just last month Hancock visited Alberta and British Colombia to “enhance our [UK] co-operation with Canada on shale gas and to deliver Canadian expertise and experience into our own industry”. In fact, DECC has seconded a staff member to work with Alberta’s Energy Regulator to gain greater insight on fracking.
This expertise will also come into play as DECC announced the formation of a new oil and gas regulator for the North Sea, which will be “not unlike Alberta’s”, Hancock said at the summit.
Hancock also welcomed several Canadian investors such as Talisman, Canadian Natural Resources and Suncor – all energy companies headquartered in Alberta – which he said “will play a vital role in the economy of our North Sea”.
In a further effort to develop the expertise “necessary to build a cluster of global expertise in shale exploration”, the government announced support for a national college for onshore oil and gas last week.
Climate Change Cooperation
But there were mixed messages in Hancock’s speech as he stressed the importance of cutting emissions as well as the need to secure a legally binding deal at the Paris climate talks next year.
Alongside his touting the importance of exploiting the UK and Canada’s oil and gas, Hancock said: “We have the need to grow our energy systems in a way that is compatible with the challenges of climate change.
“Never has international co-operation on energy and climate security been so important.”
Yet this is in direct odds with Hancock’s stated goal of increasing investment in Canada’s tar sands, among other resources.
Alberta’s tar sands are responsible for an enormous amount of CO2 emissions and are projected to quadruple between 2005 and 2030, reaching 137Mt per year.
With just a brief mention of renewable energy, Hancock turned to talking about carbon capture and storage (CCS) as a means to “develop our resources in the most sustainable fashion”.
Last month, SaskPower’s Boundary Dam coal-fired power plant in Saskatchewan became the world’s first to be fitted with commercial scale CCS technology. And Shell is testing two projects in the UK – White Rose and Peterhead – to see if CCS will work here.
“As we develop cleaner technologies, we must share our expertise,” Hancock stressed multiple times. “So I very much look forward to signing a joint statement with my Canadian counterpart on our future co-operation on CCS. I therefore retain a keen interest in Canada’s plans for more LNG [liquified natural gas] terminals, more pipelines and the prospects of Canadian oil and gas making its way to Europe.”
Photo: UK Foreign & Commonwealth Office