Wednesday, July 6

G7 backslides on climate as Russian sanctions force countries to look for more oil

G7 puts short-term imperative of skyrocketing fuel prices ahead of longer-term goals of reducing energy from fossil fuels

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The world’s richest countries are rethinking climate promises, putting the short-term imperative of skyrocketing fuel prices ahead of their longer-term goals of reducing the amount of energy generated from fossil fuels.

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“The world has taken a dramatic turn,” Environment Minister Steven Guilbeault said in a teleconference from Berlin on May 27, following a meeting with his counterparts from the G7 countries.

“(Russian President) Vladimir Putin’s brutal and illegal war has caused countries to take a hard look at their approach to climate change and energy,” said Guilbeault, adding that “there was no deviation from our collective climate goals, and in fact, we strengthened our resolve.”

The G7 remains committed to its climate goals. In the final communiquéthe group of energy and environment ministers pledged to tackle the “triple global crisis” of climate change, pollution, and biodiversity loss.

However, following dozens of pages of climate commitments to biodiversity, sustainable agriculture, carbon pricing, and clean energy, the ministers suddenly changed their tack: right now, they said, the world needs more oil.

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The world has taken a dramatic turn

Steven Guilbeault

“We note with grave concern the burden (the war in Ukraine) creates for households, in particular for low-income households, as well as businesses and industry, in G7 countries and beyond,” the communiqué read.

The ministers pleaded with the Organization of Petroleum Exporting Countries (OPEC) to pump more oil, writing, “We call on oil and gas-producing countries to act in a responsible manner and to respond to tightening international markets, noting that OPEC has a key role to play. We will work with them and all partners to ensure stable and sustainable global energy supplies.”

Though the language in the G7 statement is vague, Ian Cameron, director of communications for Natural Resources Minister Jonathan Wilkinson, said that the appeal should be seen as less for an increase in oil production, and more for a re-allocation of existing resources. “While the communiqué does indeed call for more production from producing countries, it is intended to displace Russian oil and gas, thus addressing the market tightness currently felt around the world,” he said.

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In the communiqué, the energy ministers acknowledged the contradictions inherent in their appeal, but insisted that it would be temporary.

“We aim for our relief measures to be temporary and targeted and we reaffirm our commitment to the elimination of inefficient fossil fuel subsidies by 2025,” the communiqué read. “It is necessary to consider effective measures in order to stop the increase in the energy prices driven by extraordinary market conditions, without compromising key climate policy mechanisms to drive the energy transition.”

Later, the ministers doubled down on their promise to decarbonize electricity by 2035, insisting they will gradually phase out power generated from coal. “We highlight that, wherever feasible, electrification of energy demand sectors is key to decarbonizing our energy systems,” they wrote .

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“This is a big step forward,” said Guilbeault. “Canada is showing our leadership by phasing out coal by 2030, though I suspect we may hit that target sooner.”

The G7’s decision to push for increased production in the short term doesn’t mean they will be successful in turning up new supplies of oil quickly. OPEC is holding firm. During the COVID-19 pandemic, OPEC, which has an alliance with Russia known as OPEC+, decided to slash oil production and increase supplies gradually. Now, the organization appears to be sticking with its decision, even as countries scramble to find alternatives to Russian oil.

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Countries such as Australia, the United Kingdom, Canada and the United States have banned Russian oil, but the European Union, which gets the majority of its oil from Russia, has been slow to cut off supplies. Germany is the top buyer of Russian oil in the bloc, importing 34 per cent of its oil from the country. It plans to cease Russian oil imports by the end of the year. China and India, on the other hand, have continued to buy Russian oil.

Canada has stepped up to help fill Europe’s fuel gap, but will aim to do so in a way that does not compromise the country’s climate goals, Wilkinson, who also attended the G7 meeting, said on the call with Guilbeault. “Canada, including the US and some other countries, want to assist Europe in this crisis, and in a way that is aligned with our commitments,” he said.

Prime Minister Justin Trudeau’s government has had discussions with officials from Germany and the EU for support in developing Canada-based liquified natural gas (LNG) projects. Wilkinson said that though the fuel would not be clean, it would nonetheless contribute to the broader energy” transition.”

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