On April 15, one day following the premier’s climate summit in Québec City, Newfoundland and Labrador Premier Paul Davis spoke with The Independent by phone from Québec. This is the conversation between Indy Editor Justin Brake and Paul Davis.
JUSTIN BRAKE: I’ve only heard a little bit from the conference, Newfoundland and Labrador-related, and that is that our government hasn’t figured out yet if or how we will put a price on carbon anytime soon. Were there any positive outcomes for Newfoundland and Labrador from the conference?
PAUL DAVIS: Well, there was. I mean, for me it was a good opportunity to understand where other provinces are going, what direction they’re taking as far as climate change goes. To say that we have nothing [in store] anytime soon I don’t think is fair to say because we have been working on understanding what the options are available to us. There seems to be a fairly strong consensus among premiers right across the country — there’s no doubt there is consensus right across the country — that some form of carbon pricing is the best way to reduce greenhouse gas emissions, and there are a variety of options on how that could take place. And different provinces have done it different ways, from the cap and trade — which Québec has done, and just partnered with Ontario to grow that program — and as well there’s places where there’s technology investments, and there’s places where there’s a clear tax added. But all of them are different forms of carbon pricing. So we are working towards what we believe is the best model for us, and we haven’t finalized that decision yet. But I think it’s fair to say we’re getting closer.
JUSTIN BRAKE: Sixty academics from across Canada have authored a report called Acting on Climate, and that report — it’s a position paper — outlines a number of ways provinces can start moving away from fossil fuels and toward renewable energy. There’s ideas and recommendations for policies, ideas as to how provinces can work together to achieve this, and so on. Last week they sent you a letter urging you to start the ball rolling by putting a price on carbon — and there’s a few other recommendations. The two main ones were putting a price on carbon and start working together, the provinces and territories, immediately. Now, the matter is urgent and Canada has one of the worst, if not the worst, records on climate change, as we’ve seen over the past number of years — the Harper government has refused to work with other countries around the world to [address climate change]. Our province’s attitude toward climate change seems much more in line with that of the Harper administration than it does with other developed countries that are actually taking real steps to move away from fossil fuels. So my question is, with all our wind, hydro and tidal potential, and the opportunities outlined in that academic paper that was sent to you and the other premiers: Aren’t there opportunities for Newfoundland and Labrador to do what’s necessary now, rather than be left behind in the renewable energy boom that’s not only inevitable but already happening?
PAUL DAVIS: Yes there is. I do believe there’s great opportunity for Newfoundland and Labrador, and one of the aspects of Muskrat Falls that’s very rarely talked about is how we benefit the climate. For us in Newfoundland and Labrador, the implication of Muskrat Falls [is] we’ll see the reduction and the end of the use of Holyrood…which produces about 500 Megawatts of power but is over a million tones of greenhouse gas emissions from that dirty Holyrood plant that will come to an end. But also, [Muskrat Falls] gives us the line to Nova Scotia and beyond, who is, I’m sure you’re quite aware, is very reliant on coal-fired electrical generation. And it will move them to better options which will help them reduce their emissions. So as a province I think greenhouse gas emissions and climate change is no doubt, has to be an overall global effort by all to move towards that. And we can do projects such as wind, projects such as Gull Island, that while we don’t need that much power here we can send that to provinces and states who want to move away from carbon-emitting sources of fuel and electricity.
JUSTIN BRAKE: Newfoundland and Labrador has committed to reducing [greenhouse gas] emission by 10 per cent below 1990 levels by 2020, which is five years out now. But even as we commit to that, at the same time in our energy plan, Focusing Our Energy, we’ve also said we’re going to maximize economic benefit from our fossil fuel reserves. Yesterday, as well, Darin King was making a sales pitch to the fossil fuel industry that Newfoundland and Labrador will be a leader in the Arctic Oil frontier. In addition to that, the government-appointed panel to review fracking on the Island has not been mandated to consider climate change as part of that review. And, moreover, we also participated in the CETA negotiations and gave up minimum processing requirements for greater access to the European market—I know we’ve since withdrawn our support, but during the negotiations we were willing to do that. But as MUN fisheries scientist and IPCC member George Rose recently told me, we don’t even know what the composition of fish species in our waters will look like a decade from now because the ocean is warming and acidifying. In 2017 Hebron is expected to begin pumping oil. We’re looking at drilling in the Gulf of St. Lawrence, which comes with innumerable other risks in addition to climate change. We don’t look like a province that even thinks about climate change, let alone one that’s committed to reducing greenhouse gas emissions. What is our justification for making decisions that ignore, or at least contradict, the climate science, which says basically, if all developed nations behaved like Newfoundland and Labrador, we go above 2 degrees warming, and that means significant increase in severe weather, and as a consequence greater human suffering and loss of lives?
We have products that are being sought out around the world, so we have a responsibility to be in oil. — NL Premier Paul Davis
PAUL DAVIS: Right, and certainly 2 degrees warming I think is a fairly accepted scientifically-based target to stop us from going two degrees above, and we know that we’ve already increased our temperatures and are seeing the impacts. There is a cost to fighting climate change, and there’s also economic benefit opportunities, depending on what your circumstances are from a government perspective, or from a provincial perspective. But one of the observations and statements, one of the positions that I agree with, is that climate change today is costing us, because we do have warmer weather, stormier weather, and wetter weather. So we’re seeing all of that and we’ve endured the impacts of that as a province. So it is costing us now, and it’s important that we do make investments. At the same time, we have products that are being sought out around the world, so we have a responsibility to be in oil. And while we have a responsibility that, any oil production we do, we do it in a way that is as environmentally-friendly as possible. We’re the only offshore oil producer in Canada, and the actual operations that are offshore create greenhouse gas emissions as well. So we need to work towards what’s the best solution for us so that we can work with the very small number, the handful of industries in our province that contribute—50 per cent of our greenhouse gases in Newfoundland and Labrador is produced by industry, but it’s only a handful of them that do that. So we need to find, what’s the best way for us to most effectively reduce greenhouse gas emissions while we continue to have a thriving economy. And there’s no doubt there’s a balance there, but you’re right — we have to target our carbon emissions and find a better way to do business for all industries.
Note: While Newfoundland and Labrador has committed to reducing GHGs by 10 per cent below 1990 levels by 2020, the International Panel on Climate Change (IPCC) says developed nations need to reduce greenhouse gas emissions by 25-40 per cent below 1990 levels by 2020 (and 80-90 per cent by 2050) in order to have a 50/50 chance of limiting global warming to 2 degrees Celcius.
JUSTIN BRAKE: Newfoundland and Labrador Environment Industry Association (NEIA) Executive Director Ted Lomond said last year that ours is the only province in Canada that does not have “policy designed to encourage the development and use of renewable energy technologies.” He said there are businesses here hoping to provide environmentally sustainable electricity alternatives, like wind, solar, biomass, and ocean wave energy production — but Newfoundland and Labrador policies are discouraging them from operating. Consequently, we risk losing that business that will be imperative to sustainable ecological and economic growth post-oil. At what point will we begin encouraging the renewable energy industry in our province?
PAUL DAVIS: Well it’s being reviewed right now and it’s being discussed right now. Minister Dalley has been doing a fair bit of work in his department on how we bring other opportunities of renewable sources of electricity into the grid that is being produced. But when Muskrat Falls comes on, Muskrat Falls produces more renewable energy than we need to utilize right now, but we also that there’s an opportunity for us to expand the renewable energy opportunities we have in the many ways you just mentioned. We believe we have about 5,000 Megawatts of wind potential that is yet untapped in Newfoundland and Labrador. Gull Island has potential for 2,250 Megawatts of clean, green electricity production. And there are markets in Eastern Canada and the Eastern United States, New England States, that have an interest in our markets of our renewable energy. And we’re pursuing that. I’ve met with New England governors myself since I became premier. I’ve had discussions with Atlantic premiers; we have a project underway involving Emera in Nova Scotia and New Brunswick as you’re quite aware with Muskrat. So it’s important for us to continue to pursue those markets so that we have the renewable electricity that we can provide, and that they have markets — and we need to work together to provide an opportunity to get what we have into those markets. And that would go a long way, not only to have a positive impact for Newfoundland and Labrador but again in the greater larger scheme of Eastern Canada and the Eastern United States.
I remember when I met with Governor [of New Hampshire, Maggie] Hassan, and she was talking about renewable electricity. They’re at six per cent of their electrical production, was by renewable sources. And their target is to get to 24.8 per cent, is their first target. In comparison, when Muskrat Falls comes online Newfoundland and Labrador will be 98 per cent. B.C. is at 97 per cent. So in the area of electrical production I think we’re doing very, very well compared to other jurisdictions which still rely heavily on coal and fossil fuels for generation of electricity.
Note: It wasn’t discussed in the interview, but Natural Resources Minister Derrick Dalley told The Telegram earlier this month that the government would “absolutely” introduce net-metering legislation “this year.” Net-metering allows homeowners and businesses to receive credits for excess renewable energy they create onsite, meaning residents will soon be able to install solar panels or small wind mills on their property to power their home or business, and then be credited for excess fed back on to the grid. Newfoundland and Labrador is the only province in Canada that does not have a net-metering or feed-in tariff program. The NEIA has been advocating for such legislation.
JUSTIN BRAKE: There’s no doubt that large scale hydro is better than burning coal and oil, but large scale hydroelectric developments have their fair criticisms against them for the methane they produce, which is the most potent greenhouse gas. And of course there are a lot of objections to it in Labrador with damming the biggest river and the methylmercury concerns downstream. But I want to remain focused on fossil fuel extraction. [Correction: There are other GHGs more potent than methane, however methane is more potent than carbon dioxide and plays a significant role in climate change.]
PAUL DAVIS: I want to get back to your comments on CETA too, by the way.
JUSTIN BRAKE: Do you want to say what you have to say about that now then?
PAUL DAVIS: Sure. When you mentioned CETA and the MPRs, one of the aspects with the fishery that we’ve had — you talked about how we don’t know what our fishery and our fish stocks are going to look like 10 years from now. One of the goals that we have as a province is to create an opportunity to do better research and better science, and better research around harvesting, provide better products, more efficient and effective ways to harvest, and also how we produce and process those seafood products. The federal government has significantly reduced any science that they’re carrying out, and we’ve been doing it the last four or five years with the Celtic Explorer that we brought over as a research vessel that we’ve been working with so that we can better understand the stocks that exist off our shores. So as part of the CETA project and the CETA funding is, one of the five pillars the utilization of that fund was intended for was to do better science and better research so we can better understand what’s happening in our fishery and the impacts of global warming. What are all the impacts, and what are going to be the outcomes on our fishery, and how do we best manage our fishery so it’s sustainable for years to come?
JUSTIN BRAKE: We’re facing a $900 million deficit and bracing for an austerity budget — at least that’s what comments from yourself and the finance minister have indicated. How do you tell the people who will be affected by the impending cuts to social programs and social services — who are generally the most vulnerable in our province — that there’s simply not enough money to help them, while at the same time refusing to raise corporate tax rates, or charge big oil companies like Exxon and Royal Dutch Shell for their contributions to climate change?
PAUL DAVIS: Well that was probably the most creative way yet I’ve seen a reporter try to find out what’s in our budget. [Laughs]
JUSTIN BRAKE: [Laughs] There wasn’t a hidden intention to that question. I just want an answer, straight up.
PAUL DAVIS: Why don’t we wait to see what comes out in our budget, and when we announce our budget the Minister of Finance or myself will be glad to talk to you about it at that point in time? Because in order for me to get into that discussion I really have to start talking about details of the budget and I’m really not willing to do that at this point in time.
JUSTIN BRAKE: But you have indicated that everthing’s on the table, so we can only interpret that to mean there will be some important social spending cuts forthcoming. But fair enough, I can wait until the budget drops.
PAUL DAVIS: We’ve already announced that organizations and agencies that provide programs and services on behalf of the government and receive core funding on an annual basis — core funding being funding that they don’t have to specifically apply for; it’s funding that’s been standing for a long time that they get on an annual basis — their core funding is remaining in tact, as you’ve probably heard.
JUSTIN BRAKE: We’re in an election year here, so it’s a big year for the PCs, for all the parties. There’s a lot of young and progressive voters in our province who’s support you’d undoubtedly like to have, and they’re the ones who are learning about climate change in school and in university, they’re leading a fossil fuel divestment campaign at MUN right now — and these are the young people who are going to be running our province tomorrow, and trying to make a life for themselves on the Island and in Labrador. They understand the urgency of the situation and they want to see real leadership on this issue: What assurance can you give them that if re-elected your government will act responsibly, in a way that ensures there’s a plan for Newfoundland and Labrador beyond oil? What is the long-term plan?
PAUL DAVIS: Well, first thing that I’ll tell you — based on the work that has been done and what we know about potential oil reserves off our shores, we know that there is a long-term future for oil and gas business in Newfoundland and Labrador. Of course it would depend on markets, and I don’t think the oil and gas markets are going to end in the next decade or two — we’ll have markets for many years to come; the reserves are significant. So, what we’re doing is, we’re doing two things: We have significant short-term challenges that we have to face, and we have to devise a plan of how we manage that today and how we manage that in the years to come. So that will all be part of what we present in our budget, and then people will get a better understanding of what we believe the direction is we need to go in to work our way through this very difficult year now and the difficult years that are going to follow.
JUSTIN BRAKE: But if we’re committing to developing oil for years to come — I mean, there are indications that the industry as a whole is on a major downturn and may not rebound. Even if we’re contributing only a little bit to the global climate crisis, but we say we’re going to proceed to continue developing oil for years to come, isn’t that akin to expecting other jurisdictions who might not have as many other opportunities as us, to make sacrifices so we can continue our bad behaviour, so to speak?
PAUL DAVIS: What do you mean?
JUSTIN BRAKE: If we say we’re going to develop oil for another decade or so—the climate science is saying we gotta leave 80 per cent of known fossil fuel reserves in the ground to avoid that 2 degree warming, which is catastrophic at that point, once we reach two degrees. But we’re saying we’re gonna develop oil, from what I’m understanding from you, for another couple decades. Isn’t that irresponsible?
PAUL DAVIS: What I’m saying is there’s a demand in the world for oil, and the oil is gonna be determined by economics, of price and value and how much it costs to produce and get it to market — and the environment will always be very competitive when it comes to the oil industry. Statoil, who I’m sure you’re familiar with, had the largest oil find in the world in 2013 off the shores of Newfoundland and Labrador. They’re willing and want to invest enormous amounts of money—and are doing that, investing money—to look at what are the potentials, and how they move forward with being a long-term operator in Newfoundland and Labrador. So their find is significant, as was indicated when it was found and discovered in 2013; they could be an oil producer until 2050, 2060, as long as the markets are still there for oil in the world. So we can stop production, stop our oil industry and shut it all down — other parts of the world will continue to produce and provide it. What we have is an economic value in oil.
Oil has transformed in our province in the last decade; it’s provided great opportunities for Newfoundlanders and Labradorians. It has provided great post-secondary educational opportunities, and we’ve been able to keep undergraduate tuition [fees] at such a low level, and a lot of that has to do with the finances that the province has received from our non-renewable reserves that exists in our province. And they’ve provided those opportunities for people to attend university at very low costs. So that’s just one example of significant economic value that has come from the oil industry. So the oil and gas industry continues around the world, and if we can be competitive, and if we can do it in a manner that is competitive not only economically but [from a] climate change perspective as well, then we should be in that business when we can drive our own economy.
JUSTIN BRAKE: We’ve had a decade now with billions in oil revenues coming in, and that hasn’t been put into a special fund for tough economic times, like what we might be facing with this budget, or at least in years to come. And it hasn’t, quite frankly, been put towards investing in a coherent long-term plan. … Why is the short-term economic gain more important than the long-term well-being of our province and people? Because the PCs have had 11 or 12 years now [leading] us through the oil boom, but we haven’t taken the billions we’ve made off of that to invest in a coherent plan for a sustainable and renewable energy future.
PAUL DAVIS: Are you talking about a rainy day fund?
JUSTIN BRAKE: Other jurisdictions are doing it — I think Norway has put away a few billion dollars from their oil royalties. But we’ve had more than 10 years of large scale oil extraction and we’re being told now that we…can’t afford to take out and burn anymore oil, but we’re committing to doing it for a few more decades because we have short-term economic needs.
PAUL DAVIS: You’re right. We have not put away money for a rainy day fund. When we came into government in 2003 — and this is not disrespectful to the previous government or anything — when the revenues started to be received by government in the late ‘90s, and government started to receive royalties from oil, [in] 2003 we took over government, we changed how government was being delivered. You remember the protests of thousands of people on the steps back in 2003, 2004, that era — I remember it. But what we did [is] we started investing those funds in infrastructure because we had a significant deficit in infrastructure. I remember back in those days when every day on the news, on a regular basis it was talked about — schools that were not fit to put children in because they were so full of mold. Well you don’t hear that anymore. And we had roads that weren’t fit to drive on, we had bridges that were being closed, we had public buildings that were hardly fit to use. We put significant amounts of money into investments into our infrastructure, like schools, such as health care facilities — we’ve got more doctors than we’ve ever had in our history, we’ve got nurses than we’ve had in our history. We spend 39 or 40 cents of every dollar we spend in our budget on healthcare — the highest per capita spending on healthcare in the country. Because the people demanded better social programs and better infrastructure, and we’ve invested in those. And we’ve put hundreds of millions into social programs and the delivery of services that have never been spent like that in the past. So people demanded that. But if you want to compare putting money away for the long-term future — if you look at Norway, Norway was producing oil for 20 years before they started that fund. Now what did they do for that 20 years? They invested into infrastructure and programs and services. They brought Norway to where it should have been, because they were in similar circumstances as we were before oil. And that’s exactly where we are; we’re almost about 20 years right now in producing oil, and we had our infrastructure to a better place than it ever was in the province, and we’re providing programs and services to people that are second to none. We have the best tax regime today in Atlantic Canada. You do a comparison back in the late ‘90s, in 2000, 2001, 2002, and see how they compare — you’ll find a very different answer.
If every jurisdiction that has access to fossil fuel reserves intends to use the revenues from those reserves to upgrade or modernize their infrastructure and social programs and services, we’re doomed.
JUSTIN BRAKE: The ultimate predicament that we’re in right now is that continuing to extract and burn fossil fuels contributes to a large-scale global problem that—scientists are saying we already may be at the tipping point, may have crossed it, not sure. So every barrel of oil that comes out and gets burned could push us over that — but we’re saying, as a province, that we need to meet our short-term economic needs, so we’re willing to take the risks of contributing to that big problem. Isn’t that a major predicament we’re in?
PAUL DAVIS: So those oil reserves offshore, are you suggesting that we stop producing oil, we should stop doing that for the benefit of Newfoundlanders and Labradorians in the province, we should stop doing that and just rely on the U.S., the Middle East, or other jurisdictions and countries to provide us with the oil and gas that Newfoundlanders and Labradorians require? Or we could produce our own and put it into the market. ‘Cause others are gonna backfill the need, right?
JUSTIN BRAKE: Unless we join other jurisdictions in moving away from [fossil fuels] and help not create that need in the first place.
PAUL DAVIS: This is a longer discussion but I gotta go.
JUSTIN BRAKE: OK. Thanks for your time.
PAUL DAVIS: Bye.
Note: Davis legitimately had to go. In the final minutes of our interview his boarding call was announced and he chatted as long as he could. Nevertheless, there are still important questions around our economy and energy production as they relate to climate change, and The Independent is committed to following up with Davis on the issue of climate change, as well as to giving climate change the media coverage it needs and deserves, particularly in the lead-up to the provincial and federal elections later this year. Confronting the climate crisis is without a doubt the most important issue of our time, and the leaders of all three provincial parties have been fairly silent on the issue so far.