New Brunswick industry 'pivots' to embrace green energy

Two years ago, Denis Caron was touting the benefits of the Maritime Iron project, a proposed iron processing plant that would have dramatically increased greenhouse gas emissions in New Brunswick.

"It's a very interesting project," the CEO of the Port of Belledune said of a proposal that would have caused a net increase of 2.3 million tonnes of carbon dioxide emissions.

Speaking to a Quebec television report in January 2020, Caron called it "a project that could be beneficial for the port and for the region."

It eventually stalled, and this month the port CEO was telling a very different story, embracing green energy as he appeared before the New Brunswick Legislature's standing committee on climate change and environmental stewardship.

"We really have to incorporate the environment," he told MLAs. "We have to look at better ways of economic development in making sure that we're part of the future and essentially not part of the past."

The Belledune port's bread and butter has been shipments of coal, a high-emitting source of carbon dioxide that must be phased out at N.B. Power's adjacent power plant by 2030.

Now the port "is really looking to do a pivot and move into cleaner industries," Caron said.

He deployed buzzwords like "innovate" and "narrative" and described the environment as "a hook or a lever" to lure clean-energy investment.

The province can help by designating the port as a "green energy hub," he said.

It was just one example at the climate committee meetings of major industrial players embracing the idea of emissions reductions once seen as a threat to business.

"It's a profound shift from the dominant mindset of the past where all action on climate was seen as negative on the economy," Alex LeBlanc, CEO of the New Brunswick Business Council, told the MLAs.

The council represents the CEOs of some of New Brunswick's leading companies and they're responding to fast-changing expectations, LeBlanc said.

McCain Foods, for example, aims to cut its carbon dioxide emissions in half globally by 2030 and shift to 100-per-cent renewable energy.

"The market signals and drives are clearly shifting," LeBlanc said. "Businesses understand that sustainability is not simply a corporate social imperative. It's a business imperative that directly impacts their competitiveness and resiliency."

Louise Comeau, the director of climate change and energy solutions for the Conservation Council of New Brunswick, says the rhetoric is for real: industries once on the other side of the climate debate are now coming around.

At the recent COP 26 climate conference, former Bank of Canada Governor Mark Carney announced that banks and equity firms representing 40 per cent of the world's financial assets would invest in companies committed to Paris emissions targets.

"I think that's really getting people's attention," Comeau said, as are new requirements that publicly traded companies report their carbon liabilities to investors.

'Relentless' federal agenda

At the same time, national climate policies, including a Liberal carbon pricing system upheld in two consecutive federal elections, are making clean energy a better deal relative to fossil fuels.

Ottawa is aiming for net-zero emissions overall in 2050, but wants net-zero electricity generation and 100-per-cent electric car sales even sooner, by 2035.

"The federal regulatory agenda is relentless," Comeau said. "It just keeps coming at them and they're seeing that they're not really able to just avoid them one at a time."

Notably, LeBlanc said that McCain Foods will prioritize its emissions-reduction projects first in places where carbon pricing policies make it more financially attractive.

Council members are increasingly concerned "about costs of inaction, lost competitiveness, due to not adapting quickly enough," he said.

The elephant not in the room at the hearings was Irving Oil, owner of Canada's largest oil refinery in Saint John. In 2019 it was the province's largest greenhouse gas emitter.

Last year Irving announced it was working with Calgary-based TC Energy on projects aimed at "decarbonizing current assets and deploying emerging technologies to reduce overall emissions."

For climate activists, it can be jarring to see industrial players, particularly in the oil and gas sector, adopting the rhetoric of emissions reduction.

They're also suspicious when corporate players like LeBlanc call for a "managed transition," which can look like code for a slower adoption of climate policies.

Oil industry able to respond

Dave Vetter, a senior contributor to Forbes Magazine who writes about climate and business, says it's natural to be suspicious, but large emitters have to be part of the transition.

"You can't simply make oil and gas vanish overnight," he said.

"You can't just say 'This is bad because it's this company.' You actually have to look at what they're doing."

Irving Oil has not responded to multiple interview requests from CBC News about their decarbonization plans, and they weren't invited to the climate hearings this month.

In a statement last summer, they said they were looking at using both carbon-capture technology and a shift to hydrogen fuel to lower emissions.

Vetter said climate activists "want to believe the worst of the fossil fuel industry," but companies like Irving have the expertise to pivot to respond to market forces and regulation.

"Politically, the pressure will build and build and build," he said. "And economically they're going to have to get off this stuff themselves."

Green Party Leader David Coon said during the meetings that he met with Irving Oil officials recently.

He told CBC News they're aware electric vehicles are a growing share of car sales, particularly in New England, Irving's most lucrative market for gasoline.

"They absolutely are paying attention to that," he said. "They're smart business people and they're thinking very long term."

What exactly that means for the refinery itself remains a mystery. Dale Beugin of the Canadian Institute for Climate Choices said there will be "serious pressure on the profitability" of oil refiners that don't somehow switch to other forms of energy.

For other businesses in the province, it's important that governments adopt consistent climate plans with bipartisan support so companies can make long-term plans based on policies that last beyond a single government.

They also asked for tax credits, subsidies for technology and funding for what LeBlanc called "climate managers" to help guide larger companies as they adapt.

Caron said he's been approached by many potential investors who could locate in the Belledune area, "provided that we can put some of the strategic tools in place for the development of the future."

But the prospect of an open spigot gushing with taxpayer-funded green subsidies raises another concern.

"There'll be a lot of start-ups and a lot of carpetbaggers," Vetter says, referring to companies looking to cash in on clean energy as the latest faddish buzzword.

N.B. Power has already looked at one untested technology, a new form of hydrogen power from Florida start-up Joi Scientific, that went nowhere.

Comeau says that's why more transparency and a more market-driven approach to electricity are needed: it'll make increasingly cheap wind and solar power more attractive compared to new, untested technology.

As for Caron, she says the port CEO is a canny executive who can see where things are going.

"His job is to generate income going into the port and out of the port. I don't think he's particularly committed to whatever those products are. He wants to ensure there's product going into the port and out of the port."

Coon says the same is true of most of the corporate players he saw at the hearings.

"It's what happens in a transition. It starts off slow, and then you really only notice it when it starts to pick up speed and suddenly the narrative has changed."