In the 2013 Speech from the throne, Stephen Harper and the Conservative government endorsed divestment. Sort of.
The speech, meant to scare Canadians into supporting rapid pipeline expansion, threatened that a lack of export capacity could turn the tar sands in stranded assets. It went on to raise the alarm that if too much time passes without expansion, international markets will close to tar sands crude.
He's actually right. Over the past year studies from HSBC, Standard & Poor, the Canadian Center for Policy Alternatives, Carbon Tracker and more have began to raise the alarm about a concept called the "Carbon Bubble."
Named for incidents like the housing bubble, the burst of which drove the 2008 recession, the carbon bubble refers to the economic implications of a carbon-constrained world. As the global social cost of carbon rises, a result of state and non-state actors implementing carbon cutting policies, high carbon energy sources will become economically unburnable carbon, or what Stephen Harper's throne speech called "stranded assets."
Tar sands are in a precarious economic position for a number of reasons. For one, they emit three times the amount of carbon that conventional oil does. We're already seeing the warnings signs of what this means in a carbon-constrained world as companies, cities, countries and entire regions are considering fuel standards that effectively bar the import or sale of tar sands oil.
Patagonia, Walgreens and LUSH cosmetics are among nineteen companies who have removed tar sands from their fleets. Communities across the Northeastern United States have banned tar sands, and the passage of the European Fuel Quality directive could effectively prevent tar sands from ever reaching European markets.
Another potentially more important reason in the context of recent events, is that tar sands developments and expansion are facing serious legal challenges from First Nations. Litigation, like the ongoing cases from the Athabasca Chipewyan First Nation and the Beaver Lake Cree Nation, are intervening new tar sands projects, and costing companies millions in delay.
Pipelines across Canada are bound to face similar hurdles, both from legal challenges, as well as the direct intervention and assertion of Indigenous rights. While the RCMP we're attacking the community of Elsipogtog in New Brunswick, Southwestern Energy -- the company behind the fracking push -- watched their stock drop and continue downwards.
The tar sands are marginal oil. They require a range of tax breaks, high oil prices and easy access to markets to remain a profitable investment. More than this, they require a government in denial of the reality of climate change.
Stephen Harper and Canada's carbon cartel have seen the writing on the wall. They know that real climate action requires a commitment to leave globally, and nationally, at least 80 per cent of fossil fuels in the ground, and that's why they're fighting like they mean it. Last week's events show just how willing the fossil fuel industry and their petro-state partners are to use extreme force to see through their agenda. The question that Universities, cities, pension funds need to start asking is: are we willing to bankroll this?
