Should Canada compete for North America data centres? – Sustainability Spotlight

Should Canada compete for North America data centres? - Sustainability Spotlight

Kristy Dyer – Nov 12, 2024 / 11:00 am | Story: 516915

Photo: Visitor7/Wikipedia

Google Data Center, The Dalles, Oregon

In the old days, when you purchased a computer the most important thing about the computer was the CPU speed and the “working memory” or RAM.

You installed software and data on your computer and processing was done with your local CPU and RAM.

Now the world has really changed. The most important thing about your computing set-up (unless you are a dedicated gamer) is the speed of your internet connection. Data storage and manipulation are happening “in the cloud.”

There is nothing metaphysical about the “cloud.” It’s a computer (or rather a huge collection of computers) in a building somewhere else, drawing electricity in order to move data around and do computations. The building is huge—the average size of a data centre is 100,000 square meters, or about 25 acres.

We don’t think about what happens in the cloud. Every internet search, every remote backup, every time you use your credit card, every time you use streaming services or navigation, it is happening in the cloud. Google Search, Microsoft OneDrive, Whatsapp, Zoom, Microsoft Teams and Slack all happen in the cloud.

When computing happened on our desktops, we could see the electricity we used. It showed up on our bill. Now, we have moved some of that electric bill out of sight. Data centres for cloud computing use approximately 200 terawatt hours (TWh) of electricity per year.

After the cloud came crypto. Crypto uses huge amounts of cloud computing to generate virtual currency. Crypto uses 110-150 TWh/year. And now we have artificial intelligence. AI currently uses only 10 to 15 TWh per year but everyone predicts explosive growth, possibly 40 TWh in 2026 and 402 TWh by 2030.

Is data centre computing bad for the planet? The clearest argument data centres are bad comes from crypto. The argument runs like this . We don’t need crypto. We got along for 5,000 years without it. Crypto mining is being carried out solely for the purpose of making crypto miners rich, so the carbon footprint of crypto is bad and we shouldn’t do it.

But that argument is now irrelevant. Data centres used for cloud computing currently use up as much energy as crypto. Soon both crypto and cloud computing will be dwarfed by AI and large language model demands.

Let’s look more closely at a data centre’s impact. Electricity to run the servers uses a significant amount of energy, about 60% of the total bill. Servers generate a lot of heat and ASHRAE recommends they be cooled to between 18 C and 27 C. That cooling makes up 40% of the electricity use.

Beyond the electricity used, data centres generally use evaporative cooling where hot air from the servers evaporates water, losing local groundwater to the air. The average data centre uses up about one million liters of water every day.

We can certainly make changes that reduce data centre electricity and water use. Groups are working on software changes to train AI and large language models using less electricity. Hardware can be created to allow data centres to run at higher temperatures. Data centres can be built to use ground source heat pumps for cooling and heating.

Where does Canada come in? Building a data centre in Canada comes with three obvious advantages. First, Canada is close to the U.S. Data can be transferred fast from servers in Canada to clients in the US.

Second, Canada is farther north and has cooler weather. Finally, there are regions in Canada that have access to abundant water.

What would Canada gain from hosting more data centres? There is a one-time input during construction which creates local jobs, income taxes and sales taxes on equipment and supplies. That is followed by a much smaller number of operational jobs and income from property taxes and utility fees.

What would Canada lose? If data centres are built in provinces with the dirtiest electricity—Alberta and Saskatchewan—Canada’s emissions would climb proportionally with the rise of AI. If data centres come with a commitment to renewable energy, they could drive the adoption of renewables across a province, or silo renewable energy development, making renewable energy a trait confined to data centres.

There is no doubt that Canada would benefit economically from a northward shift of data centres. However, we cannot count on renewable energy commitments from Google and Amazon.

Many data centres will be built for colocation, where many businesses rent space in the same data centre. Those businesses will feel no public responsibility and no public commitment for the centre’s environmental impact.

In the U.S., members of Congress have asked the Department the Environment and the U.S. Environmental Protection Agency to require data centres to report environmental impacts.

Several states are considering halting tax credits for data centres while they discuss requiring renewable energy investment as a condition of construction.

In Canada, we need to establish a strong policy, monitoring the impact of data centres, requiring them to use the best energy efficiency technology and be fully matched by renewable energy.

We can’t stop the rise of AI but we can prevent it from blowing us out of the water.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Kristy Dyer – Oct 29, 2024 / 11:00 am | Story: 514308

Photo: Sandor Gyarmati

A large vegetable growing greenhouse in Delta.

Canada is growing more of its own food.

More than half of our fresh fruits and vegetables come from outside Canada, mostly trucked in from the U.S. and Mexico.

We can’t make our northern growing season longer but we can move production inside, into commercial greenhouses. Between 2013 and 2023, Canadian greenhouse-grown fruits and vegetables increased by 36%. The biggest provinces for greenhouse fruits and vegetables are Ontario with two-thirds of Canada’s total and British Columbia with just under 20%.

B.C.’s Fraser Valley greenhouses produce large quantities of tomatoes, sweet bell peppers, long English cucumbers and butter head lettuce (in this column I won’t be discussing flowers, which make up 50% of B.C.’s greenhouse-grown plants).

You might nod at this point and agree that greenhouses are an environmentally friendly way of extending the growing season. The glass or plastic forming the envelope of the greenhouse traps the sun’s rays inside, where they warm the environment, allowing growers to plant earlier in the spring, harvest later in the fall and provide a consistently warm environment that speeds up growth.

The problem is modern commercial greenhouses aren’t passive collectors of the sun’s light and warmth. Instead, they are large consumers of energy, drawing electricity to power lights that extend the growing day year round and natural gas to heat the greenhouse through the winter. That allows crop harvests all year round, especially during the winter when fresh fruits and vegetables are in high demand.

In Ontario, energy costs are about 40% for lighting and 60% for heating. In B.C., with milder winters, the split is close to 50% and 50%. The energy problem is twofold—lighting is primarily provided with high-pressure sodium and a traditional commercial greenhouse was never designed to be heated.

If you are doing energy retrofits on your house, or designing a new energy-efficient house, you will run into a window problem. You would like large windows for a great view and lots of natural light but windows are a weak point in the efficiency of a house. Even triple glazed windows have a “u” value of 0.8. An insulated wall has an equivalent factor of 0.05 (lower is better). Now imagine living in a house where every wall and the roof is a window.

You would imagine growing fruit and vegetables in a greenhouse for local consumption would be better for the environment than trucking in food from the U.S. or Mexico, but you would be wrong.

A 2011 paper by J.A. Dyer et al found Ontario greenhouse-grown fruits and vegetables generated more carbon than growing them in the southern U.S. and trucking them in by a factor of 1.7. That same paper found carbon emissions from B.C. greenhouse-grown fruits and vegetables were nearly three times higher than imported fruits and vegetables.

Work in 2020 by Taillefer and Shear at the University of Toronto found greenhouse-grown lettuce in Quebec created nearly twice as much carbon as lettuce imported from California.

Extensive work in Europe, comparing greenhouse-grown vegetables in The Netherlands (which has weather similar to the Fraser Valley) with field-raised tomatoes from Spain, also found greenhouse-grown vegetables generated a lot more carbon.

One confusing issue is the argument that greenhouse grown fruits and vegetables are 10 times more efficient. That efficiency, however, is not about energy or carbon but land area.

It is true you can grow more food per square metre in a greenhouse. That is an argument important in The Netherlands, with a high population in a small country, but not relevant to Canada.

As a consumer, the choice is clear, if you have a choice between tomatoes from southern California or B.C.-grown tomatoes, California tomatoes are the clear winner for the planet.

The question is, can we solve this problem from an agricultural point of view? Can we grow food in Fraser Valley greenhouses with lower carbon emissions?

The fundamental problem with greenhouse design is the greenhouses we have, and the ones we are building today, are still designed to be passive collectors of sunlight. Architecturally, we add heat and lighting as an afterthought.

B.C. with its warmer temperatures and hydro-powered electricity should certainly be able to produce a low-carbon tomato.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Kristy Dyer – Oct 15, 2024 / 11:00 am | Story: 511859

Photo: Contributed

The McDougall Creek Wildfire burns on a ridgeline overlooking Kelowna in 2023. An increase in wildfire activity has been blamed by some on climate change.

There are two certainties that we face. One is that climate change is already upon us, showing up in weather records everywhere and the second is the people who have the most to lose from climate change are those with the lowest income, both worldwide and here in B.C.

When wildfires, floods and excessive heat hit, those people won’t have the insurance to rebuild, the income to relocate or access to air conditioning.

So I have had a sinking feeling in my gut since the B.C. NDP joined the B.C Conservative party in saying it would scrap the B.C. carbon tax. The tax has been one of the bright spots of Canadian climate policy. The tax has kept B.C. carbon emissions level during a time when the economy grew and the population increased.

Why do the B.C Conservatives and B.C NDP want to end the carbon tax? They feel with food inflation and housing prices rising, the tax is a burden on the poor and middle class in B.C. That claim is factually wrong.

The B.C. carbon tax was designed to prevent that very issue. Rebate checks from the carbon tax are issued four times a year to low income B.C. residents. People making less than $41,071, or families making less than $57,288 per year, are eligible for the full credit ($504 – $1,008 depending on the size of the household). Incomes higher than those limits get partial payments.

Ironically, a carbon tax comes from the conservative side of the spectrum. Governments all over the world are trying to set policies to slow climate change. Should they encourage renewable energy like the 2024 B.C. Hydro power call? Should they make low interest loans to finance home energy efficiency upgrades like the Canadian Greener Homes loan?

Conservatives the world over would tell you two things about government. First, it isn’t very good at picking winners. The ethanol produced from corn contributes more carbon emissions than fossil fuels. The millions of dollars spent on building hydrogen infrastructure has generated more carbon emissions because hydrogen is being made using fossil fuels.

(Not all policy interventions are useless. Felix Pretis, an economist at the University of Victoria, led an important study identifying 63 policies used worldwide that have had a significant impact on carbon emissions.)

The second fact conservatives (and many liberals) agree on is that even when government picks effective policies, it often implements them inefficiently. Government often spends a lot of money for very little carbon reduction.

A carbon tax, by contrast, sidesteps both those issues. With a carbon tax, the government doesn’t pick winners and losers. Our hard-earned tax money isn’t spent on inefficient programs that cost a lot of money and don’t save a lot of carbon. You choose how to spend your money.

Economists world wide and from both sides of the political spectrum agree the most effective and most efficient way to reduce carbon emissions is to use a carbon tax.

Why does the tax work? Everyone, from the very wealthy to the very poor are educated consumers. We know which brands to buy, where to make purchases and the location of the cheapest gas station. By slowly including the climate-cost of fossil fuel products, people make different choices, ones that are better for the planet. That doesn’t just apply to consumers, businesses of all scales and industries respond to price pressure.

B.C.’s carbon tax isn’t perfect. For one thing, rather than covering100% of carbon emissions in B.C., it covers only about 70%. Currently the following are exempt from the carbon tax

• Non-fuel emissions from agriculture and landfills, about 15% of BC carbon emissions.

• Emissions from extracting and processing fossil fuels, such as leakage of methane from natural gas pipelines.

• 3. Carbon dioxide released from cement producers during the production of lime. Since 2023 B.C.’s greenhouses, which use natural gas and propane to heat poorly insulated buildings, have had an exemption from the carbon tax.

Another issue with the carbon tax is B.C. has set carbon targets which would limit global warming to 2 C, avoiding the worst effects of global warming. But B.C.’s scheduled carbon tax increases are too slow to accomplish the goal.

It is amazingly shortsighted to cancel B.C.’s carbon tax on behalf of low and middle income residents. The carbon tax, as it exists in B.C., already rebates 100% of taxes paid to low-income British Columbians. As the climate crisis gets worse, something the B.C. carbon tax is trying to address, the people with the lowest incomes will suffer the most from global warming.

Around the world, that means people already on the edge will die of famines and extreme weather. In B.C. it means people without a financial cushion and without adequate insurance will lose homes to atmospheric rivers (2021), wildfires (annually but especially 2023) and in the Okanagan, flooding from sudden spring snowmelt (2017, 2018).

Wealthy Canadians can re-landscape, rebuild and, if all else fails, relocate. Low income Canadians don’t have that option.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Kristy Dyer – Oct 1, 2024 / 11:00 am | Story: 509474

Photo: Kiewit

Kearl Lake oil sands project

Extracting oil from the Alberta oil sands is a modern technological marvel.

Bitumen from the oil sand is extracted in two ways. For deposits deep underground, steam is generated and pumped beneath the earth. It melts the bitumen so it will flow into a production well.

For deposits close to the surface, the bitumen is extracted using pit mining. In pit mining, the oil sands are crushed and mixed with hot water. The resulting slurry is run through extraction and treatments to extract the bitumen. While some bitumen can be directly diluted and piped to a refinery, other kinds require further processing at an upgrade plant to produce synthetic crude.

This complex process for mining, upgrading and refining has two unfortunate consequences. First, it is more expensive to produce a barrel of oil from oil sands than it is in a conventional well. That means when the price of oil drops, extracting oil from the oil sands becomes uneconomic. It also means a barrel of oil from the oil sands is responsible for more greenhouse gases than other extraction methods—more than twice as much. Those extra emissions come from natural gas burned to produce steam or hot water, diesel for haul trucks at open pit mines, and fuel burned to operate upgrade plants.

In 2021 Canada emitted 653 megatonnes of carbon and 29%—189 megatones—were from the oil and gas industry. Alberta accounts for 84% of Canadian oil production, three-quarters of which comes from the oil sands. There is no way for Canada to meet its climate goals without decreasing oil production in Alberta, in particular from the oil sands.

It’s no surprise that most Albertans oppose reducing oil production. Twenty-two per cent of Alberta’s gross domestic product is from mining, oil and gas. Many of the other categories, like real estate, benefit from knock-on effects from the oil and gas sector. The government of Alberta receives annual royalties from the oil sector that vary from $2 billion to $28 billion. Eighty thousand people work in oil and gas in Alberta with 50,500 people work in oil and gas support activities.

What is going to become of those workers? What is the best way to support oil and gas workers during the transition? We don’t have to speculate. Europe has been closing coal-fired power plants, which in turn has shut down coal mining. Many different programs were tried to support coal workers, some more successful than others.

One of the least successful was providing early retirement to coal workers. Poland, Germany and the Netherlands all provided early retirement to miners. That was expensive and didn’t work out very well. The good thing about oil and gas workers is they are highly skilled.

Removing highly skilled workers from high-wage employment is bad for the workers and bad for the economy. Another Polish program provided a one-time lump-sum payment equal to 24 months of the average salary in the mining sector. That also had poor outcomes for workers and the economy.

So what kind of programs work?

The most basic policy is that oil and gas workers need more time on unemployment insurance. Short periods of EI can force previously high-paid workers into low-wage jobs. Research in Finland by Kyyra and Pesola showed that a longer benefit period increased both wages and the duration of the next job.

Work by Caliendo, Tatsiramos and Uhlendorff on German unemployment benefits also showed workers with 12 months unemployment assistance obtained lower paying jobs and held them for shorter periods than workers with 18 months unemployment assistance.

In the US, research by Farooq, Muratori and Kugler demonstrated that longer unemployment benefits meant workers found jobs that better matched their educational achievements and improved the functioning of the labour market.

Another policy to help oil and gas workers is retraining. This includes covering tuition costs and extending EI for the duration of the training.

Some retraining programs are very short. Iron and Earth is a non-profit in Alberta, founded by oil and gas workers in 2016. It operates a 10-day retraining program that prepares oil and gas workers for jobs in the solar or wind energy sector.

Some transitions may require more training, such as a two-year college program. Landon Wilcock, an associate at the Tony Blair Institute for Global Change, calculated that rapid retraining would cost $1.07 billion over the first five years and benefit the economy to the tune of $21.72 billion. A college-length diploma program would cost the federal government $1.71 billion over the first five years and have a positive impact on productivity of $2.02 billion.

The positive impact comes from workers moving to clean energy sector jobs with a greater value per worker. If that sounds expensive, compare it to what Canada spends subsidizing oil and gas. Special tax deductions and direct cash transfers to fossil fuel companies amount to $4.8 billion dollars a year. Compare that to what climate change is costing us. The Canadian Climate Institute estimates that by 2025, 10 years of climate change will have reduced the Canadian GDP by $25 billion dollars.

We can support a just transition for oil workers. We can’t afford the alternatives.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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Publish date : 2024-11-11 22:00:00

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