Dealing with fossil fuels in a SSE

In my previous column, I quoted an economist by the name of Kenneth Boulding on the subject of a “steady state economy.”

“There is something fundamentally wrong in treating the Earth as if it were a business in liquidation.”

— Herman Daly

In my previous column, I quoted an economist by the name of Kenneth Boulding on the subject of a “steady state economy.”

An SSE is an economy, which, unlike a cancer cell, doesn’t seek to kill its host (its host, in our case, being the environment, from which our economy derives its sustenance).

But in the previous column, I got stuck on a particular SSE prescription for dealing with fossil fuels.

It stated that oil, gas and coal should only be pulled out of the ground at a rate at which they can be replaced by renewable substitutes (e.g. wind and solar, etc).

However, there was no explanation as to how a lump of coal (measure by joules of energy) could be equated to a solar panel (which is measured not by joules of energy, but by joules of energy per second).

So, along comes Herman Daly (another economist) to the rescue. To deal with fossil fuels in an SSE, he proposes a “cap-auction-trade” system.

And Alberta is not totally out of the loop on this one, since it has elements of both auction and trade in fossil fuels and their resulting emissions.

Oil leases in Alberta only go to the highest bidders.

This makes sense in a capitalist economy, where efficiency is defined as getting the best bang for the buck.

Then there’s the trade element for dealing with emissions. Alberta has the Specified Gas Emitters Regulation (SGER), which applies to large industrial emitters, such as tarsands operators and electrical generating facilities.

These companies (106 of them in Alberta) all emit more than 100,000 tonnes of greenhouse gases (GHG) per year. However, under SGER, they are supposed to reduce their rate of GHG emissions per unit of oil or electricity produced (also known as “emissions intensity”). If they’re unable to reduce that rate, they can buy permits off of other companies who are able to make those reductions (that’s where the trading comes in).

But overall, those 106 companies are still able to increase their output of GHG … just as long as their emissions intensity numbers go down.

Make sense? Well, don’t worry, because Premier Jim Prentice is supposed to be tweaking the formula some time later this year.

So maybe I’ll give him a few numbers to work with.

On the Alberta government website, it trumpets the fact that since 1990, the amount of GHGs produced per barrel of bitumen has gone down by 26 per cent. Wow. That’s about one per cent a year … and in the right direction, too.

But on the very same page, it forecasts that bitumen production is supposed to rise from two million barrels per day in 2013 to 3.7 million barrels per day in 2020. That equates to an increase of about 12 per cent per year.

Hmm. A historical one per cent per year decrease in emissions intensity versus a forecast 12 per cent increase per year in overall production. Which part of the equation do you think will win out in the end?

Which brings me to the third element of Daly’s SSE system: the cap.

At some level of oil-gas-coal production, thought has to be given to both the rate of depletion of the resource (though with 168 billion barrels of proven bitumen reserves, I don’t think we’ll be freezing in the dark for a while yet), as well as the pollution and habitat degradation related to getting those resources out of the ground.

We’ve already heard about the woodland caribou being classified as a “species at risk,” due to all of the development up north.

And I assume that most of us by now accept the fact that refining bitumen and burning gasoline contributes to global warming.

But do we want to do anything about it? As Hamlet would say, “that is the question. …”

I think it’s time for Prentice to stop thinking about what industry lobbyists might say. And he also has to stop thinking about what voters might say when asked by pollsters to give very short opinions about very complex issues.

What he needs to do is to convene a randomly selected citizens assembly (Google it), and have them deliberate on the issue.

That’s because a citizens assembly is the best way to come up with proposals that are legitimate, transparent, and accountable.

And I’m quite sure that a random selection of my fellow Albertans, given the task of deliberating on this important issue, will not see the Earth as something to simply liquidate.

Evan Bedford is a local environmentalist. Direct comments, questions and suggestions to Visit the Energy and Ecology website at