MONTREAL – People need to get their heads around the idea that fossil fuels are “probably dead,” the CEO of Canadian Pacific Railway said Wednesday.
“I’m not maybe as green as I should be but I happen to think the climate is changing (and) they’re not going to fool me anymore,” Hunter Harrison told a J.P. Morgan transportation conference in New York.
The veteran rail executive said the transition to alternative fuels will be long, but new investments in traditional energy sources will dry up because of environmental hurdles.
The country’s second-largest railway has seen shipments of crude drop due to declining demand brought on by the dramatic fall in oil prices. Thermal coal shipments have also waned.
Harrison said the rail industry will have to adjust to a shift to alternative energy sources, just as it did in the 1990s when the U.S. Clean Air Act wiped away 29 per cent of the business at Illinois Central Railway that he ran at the time.
“I think that it’s a challenge going forward, but rails have historically dealt with those changes really well through the years and continued to survive and make it,” he said.
Company spokesman Jeremy Berry said later that Harrison was referring to the “overwhelming trend” towards sustainable energy and the need for all segments of the economy to acknowledge the ever-changing energy landscape.
Greenpeace welcomed Harrison’s view, saying it marks a reversal from the 1990s when railroads denied global warming because they relied so much on coal.
“I think he’s just recognizing the new realities and looking to go where the puck is going rather than where it has been,” said Keith Stewart, the environmental group’s head of climate and energy campaign.
“And our political leaders would do well to recognize that renewable energy is the way of the future and we need to be looking at how we can prepare for a world that is going beyond fossil fuels.”
Under the new Liberal government, Canada was among countries late last year that helped push for a goal of limiting global warming to around 1.5 degrees Celsius above pre-industrial levels.
The Calgary-based railway (TSX:CP) also said it filed a resolution with U.S. securities regulators that it plans to introduce to Norfolk Southern shareholders at its next annual meeting as part of its effort to acquire the Virginia-based railway.
The motion calls for shareholders to request Norfolk’s board to engage in discussions with CP Rail that wouldn’t preclude discussions with other parties.
“This is kind of our last effort, the last thing we know to do and we hope it will work,” Harrison said. “And if not, we are going to go back in and run our railroad.”
Note to readers: This is a corrected story. A previous version had a wrong last name for Jeremy Berry.