{"id":25900,"date":"2026-03-26T14:57:29","date_gmt":"2026-03-26T14:57:29","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&p=25900\/"},"modified":"2026-04-09T14:52:54","modified_gmt":"2026-04-09T14:52:54","slug":"the-ottawa-alberta-trifecta-methane-carbon-pricing-and-pathways","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/climate-action-institute\/climate-crunch\/the-ottawa-alberta-trifecta-methane-carbon-pricing-and-pathways\/","title":{"rendered":"Climate Crunch: The Ottawa-Alberta trifecta: methane, carbon pricing and Pathways"},"content":{"rendered":"\n
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\u2794 Canada charts new scenarios for a new energy era<\/p>\n\n\n\n

\u2794 The small switcheroo that revolutionized energy efficiency<\/p>\n\n\n\n

\u2794 A handbook for climate hopefuls<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Signals<\/h2>\n\n\n\n

What happens to coffee farms when pest-controlling bats disappear? <\/strong>The world is waking up to the fact that biodiversity impacts everything from your morning cup of Joe to corporate bottom lines. Recently, 152 member governments, including Canada, backed the IPBES Business & Biodiversity Assessment report. It’s groundbreaking research as more than half of the world\u2019s economy, roughly US$78 trillion, depends on nature, from food to tourism to construction, according to RBC research<\/a>. One of the IPBES report\u2019s key takeaways: align fiscal policies and financial flows with biodiversity and sustainability goals. However, muted mainstream media coverage suggests the message of nature as an asset\u2014and shield\u2014has yet to resonate with a mass business audience. For more, read Unearthing Value: How nature can play a critical role in pro-growth agendas<\/a><\/p>\n\n\n\n

It\u2019s a light-bulb moment for energy efficiency.<\/strong> While the global built floor area grew 20% over the past decade, lighting electricity use remained stable\u2014in no small part to the humble LEDs, which are nearly 12 times more efficient than halogen lamps. Without them, the world would have gobbled up 800 TWh more electricity\u2014exceeding Africa\u2019s annual electricity consumption, the International Energy Agency<\/a> estimates. Significant potential remains: 30% of lamps in South America and parts of Asia-Pacific (excluding China and India) still need upgrades, while replacing aging first-generation LEDs would further conserve power watts.<\/p>\n\n\n\n

Nuclear\u2019s making a climate comeback. <\/strong>The low-carbon electricity technology underlies some of the world\u2019s cleanest grids and could help decarbonize several industries, says Vivan Sorab,<\/strong> our Clean Tech Policy Lead. France\u2019s electricity grid emits just 22 gCO2\/kWh, one of the lowest in the world, as nuclear supplies 65% of the country\u2019s power. Ontario\u2019s grid saw emissions intensity rise to 74 gCO2\/kWh in 2024 over the previous year as nuclear refurbishments and demand growth necessitated more natural gas in the system. Small modular reactors (SMRs) could extend nuclear\u2019s climate logic beyond the grid. Carbon-intensive industries like heavy oil extraction and petrochemicals require high-temperature steam that renewables are struggling to deliver on their own. SMRs could eventually provide both electricity and industrial process heat, making them one of the few technologies that can help hard-to-decarbonize sectors. For more on nuclear, read Atomic Advantage: Canada\u2019s generational opportunity in a new Nuclear Age<\/a>.

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Canada\u2019s message from CERAWeek<\/h2>\n\n\n\n

By John Stackhouse, Senior Vice-President, Office of the CEO<\/strong><\/p>\n\n\n\n

\"John<\/figure>\n\n\n\n

The climate contingent at this week\u2019s big CERAWeek energy conference in Houston could be forgiven for a bit of dizziness. It\u2019s not just the bayou city\u2019s humidity (early) or the marathon TSA lineups at Bush International (late); the tenor on climate action felt a bit 180. <\/p>\n\n\n\n

Two years ago, Joe Biden\u2019s energy secretary Jennifer Granholm was here to explain the administration\u2019s LNG pause. On Monday, Donald Trump\u2019s energy secretary Chris Wright stood on the same stage to explain plans to double LNG production this decade.<\/p>\n\n\n\n

It\u2019s not just the White House that has changed climate colours. Delegations from dozens of countries came to Houston to plead for more of everything\u2014especially natural gas. The Japanese\u2014home to Kyoto and a lot of climate innovation\u2014were at the front of the queue, explaining they can no longer rely on Qatar and a few others for the gas that powers their island economy. (Remember the nuclear shut down, post-Fukushima.)<\/p>\n\n\n\n

The U.S. is now working to supply Japan and other allies with as much gas and oil as it can muster. And it looks like a lot of that will come from Canada.<\/p>\n\n\n\n

When it comes to oil, Canada covers two-thirds of the gap between U.S. production (12 million barrels a day) and consumption (20 million). We supply an even bigger share of Americans\u2019 gas in a range of states.<\/p>\n\n\n\n

Energy Minister Tim Hodgson came to Houston to tell the world that the federal government is committed to seeing oil production increase by 2.5 million barrels a day \u2014 a 50% jump \u2014 and doubling LNG exports from what\u2019s now planned. Can that massive increase be done in line with climate commitments?<\/p>\n\n\n\n

I posed the question to Hodgson and Alberta Premier Danielle Smith in a conversation I moderated at Canada House, as part of the conference. They expressed strong alignment (so much so that Smith called herself the environmental spokesperson for Carney\u2019s energy policy). They then honed in on three words: methane, carbon pricing and Pathways.<\/p>\n\n\n\n

Their governments later that day unveiled an agreement on methane emissions that will help keep Canada, and Alberta, on a path to net zero (\u201ccarbon neutrality\u201d is Smith\u2019s preferred measure). Industrial carbon pricing is thornier, although it may get solved by extending some timelines.<\/p>\n\n\n\n

The big nut is Pathways, which Hodgson called \u201cthe biggest carbon capture project in the world\u201d and would make all those new barrels much more carbon efficient. Cost is another matter. Ottawa thinks Pathways could cost as little as 50 cents a barrel, which it sees as a deal for the industry if it secures a 50% increase in production. Industry people here see the cost to be higher, although there\u2019s some hope that possible investments from Canadian pension funds would reduce long-term capital costs.<\/p>\n\n\n\n

We can expect more on all this next week, when the Ottawa-Alberta MOU on energy hits its key milestone date of April 1. The global crisis may cause some delays, and lead to further adjustments. But the message in Houston from Ottawa and Alberta was clear: more production and lower emissions is the new Canadian plan.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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New scenarios for a new energy era<\/h2>\n\n\n\n

By Shaz Merwat, Energy Policy Lead<\/strong><\/p>\n\n\n\n

Electrification is going to be Canada\u2019s key climate enabler. Electricity generation is expected to be up 50% by 2050, with renewables making up 91% of the grid (compared to 79% today), according to Canada Energy Regulator\u2019s<\/a> latest traditional scenario, which it labels as Current Measures.<\/p>\n\n\n\n

While net-zero by 2050 remains a challenging aspiration, the economy is also forecast to advance towards lower-carbon sources. With carbon-intensive coal almost out of the equation, and crude oil production growth easing, fossil- fuel growth will be driven by the relatively lower emissions natural gas: By 2050, natural gas will account for 43% of total oil and gas production\u2014compared to 36% today.<\/p>\n\n\n\n

\"Canada's<\/figure>\n\n\n\n

Published two weeks into the war on Iran\u2014what could prove to be one of the most cataclysmic energy events of this century\u2014the report offers multiple paths for Canadian energy and electricity growth and emissions contraction.<\/p>\n\n\n\n