Implications of Russia’s invasion of Ukraine on Canada’s energy and climate change policy

Major wars are often watershed moments in history. Their outcomes can define governance structures, politics and policy directions for decades, even centuries, to come. Russia’s invasion of Ukraine already seems certain to have these kinds of effects at the national, regional and global scales.

The invasion has quickly come to dominate political and policy agendas, displacing the focus on issues like the ongoing COVID-19 Pandemic, and Climate change. But the war in Ukraine, whatever its outcome, will have major implications for these questions, particularly around energy and climate change, far into the future.

Beyond the immediate horror of Russia’s assault on Ukraine, perhaps the most obvious effects in climate and energy policy terms have been to provide Europe with a powerful imperative to accelerate the process of decarbonizing its economies.

The risks associated with dependence on Russian oil and gas – always an underlying rationale for energy transitions in Europe – are now being fully realized. The assumption that the economic impacts of losing the European energy market would restrain Russian President Putin’s aggressive tendencies has clearly failed.

Beyond the immediate impacts of increased energy prices and potential shortages in Europe, there will almost certainly be redoubled interest in fossil fuel-based energy options: particularly renewables, and energy storage and other enabling technologies to reduce dependency on fossil fuels for space heating, transportation, industry and electricity generation.

Other dimensions of Europe’s energy pathways forward are less clear. There have been, for example, suggestions of a renewed interest in nuclear energy – but that path is far from certain. The economics of new nuclear facilities remain profoundly unattractive even with massive governmental support.

The war, including the overrunning of the Chernobyl site, and most recently the Russian attack on the Ukrainian Zaporizhzhia nuclear plant, along with President Putin’s thinly-veiled nuclear threats, have provided stark reminders of the security and weapons proliferation risks associated with a nuclear heavy pathway to decarbonization and energy security.

The implications of these developments for Canada in terms of energy and climate change are quite different. Canada faces no immediate energy security threat – Russian oil is an utterly marginal element of Canada’s energy supply. What is more likely are pressures for Canada to expand its role as a geopolitically stable and secure source of fossil fuels, particularly to Western Europe and other consumers of Russian oil and gas.

Challenges to existing Canadian climate and energy policy flowing from those pressures could be significant. Canada’s current oil reserves, although large, are overwhelmingly concentrated in the western Canadian oil sands. Their extraction is highly energy and carbon-intensive. The federal government’s current climate policy trajectory is to move the upstream oil and gas sector towards net zero emissions by 2050, a plan that could be difficult to reconcile with further major increases in production.

At the same time, there is currently no direct route for a major expansion of exports of Canadian oil to Europe. Additional exports would have to move through the US Gulf Coast, an option now constrained by, among other things, the Biden Administration’s rejection of the Keystone XL pipeline. The situation may lead to pressures for new export infrastructure. There are already calls for the Alberta to New Brunswick Energy East pipeline to come back onto the agenda, a pathway that could lead to renewed intergovernmental conflict between Quebec and Alberta.

Canada’s conventional natural gas production has already been in decline, but the geopolitical situation may renew Interest in BC’s currently largely stalled liquid natural gas export initiatives. Such developments would further complicate the climate policy landscape, as BC’s gas resources are another highly carbon-intensive energy source themselves.

The new relationships between energy, geopolitical security and climate change policy flowing from the invasion of Ukraine are only beginning to emerge and their ultimate directions – along with the outcome of the war – remain uncertain, but the implications for Canada will be enormous.