The unbearable cost of fossil fuel lobbying

Anjali Appadurai
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January 18th 2023

The new year opened with a significant step forward for Canadian climate policy as the Glasgow Statement takes effect. Canada signed onto the policy, which promises to end international public support for the oil and gas industry, with an accompanying pledge to tackle the much higher domestic support for the industry by mid-2023.

This is a much-needed step in the right direction and brings us closer to our climate goals. However, let’s consider the backdrop. The fact is, Canada falls at the bottom of the G20 when it comes to public financing of fossil fuels in relation to GDP. Companies received $18.4 billion in federal spending in 2022 alone, while in the same year, the industry raked in all-time-high profits of $152 billion. The biggest oil and gas companies and their industry associations have been hard at work lobbying at every level of government for all manner of subsidies and industry-friendly policies.

But even beyond the monetary benefit the companies gain from their high level of access to government is the power and influence they exert in ways that profoundly alter the pace and course of the energy transition in Canada and abroad.

A few degrees off course

In Arundhati Roy’s now-famous pandemic essay, “The Pandemic is a portal,” she argues what we now all know — that there is no return to “normal.” There is a rupture, a portal, between the old world and the new, and we can’t shove everything through that opening. Climate policy is about choosing clear priorities — what will come with us and define the future. And here, in the turbid centre of the portal, where layered crises of climate change, economic strain and a pandemic meet, there is no room for ambiguity. The polycrisis forces us to pick a side.

And it seems like the government is making its choice clear. If you connect the dots between lobbying and government spending, we see that in 2020, oil and gas companies received a spike in government subsidies. That correlated with the Canadian Association of Petroleum Producers, the industry's biggest lobbying group, reporting a record number of communications with the federal government. Unchecked, this carefully tended relationship between the industry and the government will continue to funnel money to fossil fuel companies, locking us into a set of priorities that are not in line with a climate-safe future.

Most recently, lobbying and public funding are justified as an investment in carbon capture, utilization and storage (CCUS), which is essentially a way for the oil and gas industry to reduce its greenhouse gas emissions at the production stage while skirting the need to tackle the much more significant questions of fossil fuel expansion, production and managed decline. The issue of CCUS is controversial at best, criticized by climate experts and advocates around the world as a false solution that protects industry profits while pulling the rug out from under real clean energy solutions. Canada’s 2022 federal budget will invest $2.6 billion over five years in CCUS. What is the opportunity cost of that investment?

Government subsidies for CCUS act as a loophole in the promise to end public finance for fossil fuels, allowing the industry to wax enthusiastic about climate action while making no plans to wind down extraction. As evidence, listen to the oilsands companies make much ado of their participation in the Pathways Alliance, an industry initiative that aims to use carbon capture to achieve net zero by 2050, but hasn’t yet outlined a clear way to get there. Subsidizing CCUS extends the life of oil and gas while acting as an emissions reduction strategy on paper. The fossil fuel industry’s successful advocacy for public investment in this strategy precludes other, bolder investments in an energy transition. It sets the ship a few degrees off course, a distance that will grow with each passing year.

Devil’s in the details

If lobbying is power, then regulation is the metering of that power in service of the public interest. Real regulation of an industry involves a certain imagination for what an alternate economy could look like, along with a correlating investment in the alternate vision. But with public support for fossil fuels in Canada outstripping support for renewables by more than a factor of 11 between 2019 and 2021 alone, we are dragging our feet toward the energy transition.

There is no room for ambiguity in the face of the layered crises of climate change, economic strain and a pandemic, writes Anjali Appadurai. We must pick a side. #cdnpoli - twitter

When regulation does happen — in many cases because social movements manage to push the window of possibility open — oil and gas lobbyists are never far behind, relying on the relationships they have carefully built with the government to ensure that the devil is indeed in the details.

Even the Glasgow Statement policy — signed by Canada after intense domestic and international pressure and multiple electoral promises — contains grey areas that could be of concern. On the international side, there is an exception for fossil fuel projects that are of importance to “national security,” without identifying what these projects are. Similarly, the promise to end “inefficient” fossil fuel subsidies by the end of 2023 lacks a clear definition of what falls under that umbrella. And of course, the fact that the statement only covers “unabated” fossil fuels, meaning that any project connected to a CCUS facility is still eligible for taxpayer funding, is telling of the industry’s influence.

Oil and gas companies know the power of grey areas, and their long-standing relationships with the bureaucrats writing the policy help to circumvent the full power of regulation, allowing the companies to, in name, support high-level progressive policies while fighting their details and implementation behind the scenes.

A tilted playing field

It seems inevitable that fossil fuel lobbyists, with their abundant exposure and access to decision-makers, are able to exert outsized influence on oil and gas policy and funding decisions.

In a way, the regulations — or lack thereof — around corporate lobbying of the government invites this uneven dynamic. There is a lack of transparency and clarity in public records, which makes the direct links between lobbying and public support difficult to draw. This leads to numbers that are often underestimated. The whole playing field, from the Lobbying Act itself to the types of activities covered to the rules governing disclosure to the sheer amount of support in various forms is tilted towards the companies. The rules are rife with gaps — they are a rickety partial dam against a flood of power and influence from the industry, exercised relentlessly each day.

The cost of delay

All of this has the inevitable effect of slowing down the energy transition that is this century’s most pressing priority.

And time is everything in the justice equation of climate change. If we want an equitable pathway out of this crisis, we must measure the cost of delay in lives. The price of inaction is already unacceptably high; the “loss and damage” struggle that reached a head at the last United Nations climate conference is a reflection of how we have moved past the point of “preventing” climate change, and are now fully in the stage of compensating death and attempting to minimize the inevitable death to come.

This may seem like an acceptable price to pay for CAPP and the lobbyists who seek to extend the life of the oil and gas industry while staving off a transition to a low-carbon future. But Canadians should know the true cost of taxpayer support for the oil and gas industry extends far beyond the dollar amounts. We must all choose a side.

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