I’m still mad at you for carrying on with Site C Dam, based on the utterly bogus reasons you offered the public. But when it comes to Kinder Morgan, I’ve got your back, because you clearly have mine — along with all British Columbians determined to protect our precious air, land, and water in what we are proud to call Super, Natural BC. You’re on the right track — stay the course.
I’m proud of the well-reasoned, principled stance you’ve taken in the face of unconscionable bullying and bluster from your Alberta counterpart, Rachel Notley, and our Prime Minister.
As you’ve stated, the Royal Society, a preeminent collective of Canadian scientists, has identified significant knowledge gaps with regards to how diluted bitumen behaves when it’s spilled into our environment. You’ve said that until we get answers to these questions we should not be expanding the flow of this gunk through our waters. I agree.
Some have accused you of using this issue to delay the project — I don’t believe that, but even if I did, that wouldn’t change my opinion. For reasons of climate, ecology, Indigenous rights, and protecting BC’s economy, this pipeline should not be built, period.
I’ve read lots of comments on stories about this bizarre Alberta-led “Trade War” calling you and Rachel both children. There are two children in this fiasco — one’s name is Rachel and the other’s Justin. You are not among them.
When Little Rachel doesn’t get her way, she indulges in petulant retaliation, like depriving her own citizens of delicious BC wines, making idle threats and pouty faces. When Justin feels disrespected by the very people he’s running roughshod over, he throws temper tantrums — “Aw, come on! Really? Really!” He turns into a playground bully. As I’m sure you know, John, the last thing you do with bullies is give into them.
New BC Liberal Leader Andrew Wilkinson dog-piled on you today, saying “Premier John Horgan has decided to pick a fight with Alberta that is probably going to lead to a constitutional challenge and in which British Columbia will probably lose in the courts.” How is this your fault, John? For listening to science when no other leader seems interested? For standing up for the people who elected you? For refusing to be cowed into submission? No, you’re doing your job, as you should.
Rachel picked this fight and Justin’s egging her on. Andrew doesn’t seem to understand the people he is now seeking to lead. We’re not going to roll over and allow ourselves to become the doormat for Asia-bound heavy oil that threatens our economy and environment while further destroying our planet’s climate — all while getting nothing in return (unless he counts 50 jobs at the new Kinder Morgan terminal). Why on earth would we ever do that?
It is unfortunate that Rachel made BC’s winemakers innocent victims of her retaliation. Thankfully many British Columbians are pulling up their socks to make them whole. It’s a tough job, but someone’s got to drink all those nicely balanced Chardonnays and full-bodied, complex Cab-Savs — and we British Columbians, with our newfound friends in Quebec, are up to the task. Sooner or later, Rachel’s own citizens — some of whom actually own vineyards in BC or whose establishments depend on BC wines — will get fed up with this futile campaign.
Will this end up in the courts? Who knows. Justin maintains a Texas pipeline company’s project, designed to benefit big oil companies who continue cutting local jobs while keeping profits to their shareholders and foreign owners, is in the “National Interest.” John, you and I know that’s a load of hooey and proving it in court, in order to invoke Sections 91 and 92 of our constitution, is a far bigger challenge than Justin would care to admit.
We also both know there is far more to this story — like the Indigenous rights Justin (and you) have pledged to respect. The courts haven’t yet had their say on that matter. Then there are the moral and political calculations at hand. Justin needs BC’s 17 Liberal seats far more than he does his 4 in Alberta. He’s carefully cultivated a youthful, Sunny Ways brand in the eyes of local and international media. How does that square with calling in jackbooted RCMP or soldiers to stomp all over First Nations grandmothers, youth, decent British Columbians — all captured on social media for the world to see?
Rachel’s on the way out — anyone can see that this is merely a desperate last-ditch ploy for her to cling to power. But for you and Justin, how you carry yourselves on this file could have a decisive impact on your reelection. Your position is politically wise. You have much ground to make up from your disastrous Site C decision. This won’t fix that problem (what would fix it is reversing that call — it’s not too late). But it helps.
Justin, on the other hand, has now painted himself into a corner. It’s hard for him to walk back these strong declarations he and his government have made about getting the pipeline built. Yet it’s impossible for him to carry on this logical fallacy that we can’t meet his climate goals or protect the coast from oil spills without building another pipeline and exporting more oil! Moreover, with these heavy-handed tactics against BC citizens and First Nations, he stands to smear his own brand with Tar Sands goop and lose a lot of key seats in BC.
Justin needs to decide between the oil lobbyists who have clearly captured his government and his own political future.
As for your political future, John, that’s an open question, but it can only benefit from staying the course on Kinder Morgan. Rachel and Justin will keep bullying you. The Old Media pundits and business lobbyists will push you to question yourself. Right-wing British Columbians who would never in a million years vote for you anyway will slag you on social media. Pay no mind.
The rest of us are raising a glass of the Okanagan’s finest in your name.
According to the International Energy Agency, a staggering 90% of all new electrical capacity brought online around the world in 2015 came in the form of renewable energy. That same year, China invested a record $110 Billion in clean tech – virtually 100% of its electrical capital – and in 2016, it’s set to close 1,000 coal mines. While Canada is shedding fossil fuel jobs like they’re going out of style, the world’s current economic powerhouses – China, the US, Germany, Brazil, Korea – are generating millions of new green jobs.
In other words, the bust we’re witnessing in Fort McMurray and North Dakota is no mere blip – no typical, “cyclical” downturn. Common Sense Canadian contributor and retired federal government energy innovation expert Will Dubitsky, who has been tracking and publishing these figures here for several years now and whom I draw on extensively for this article, put it to me in the following terms:
[quote]We don’t expect a return in the blacksmith business. At some point, it was simply replaced by more modern tools and trades.[/quote]
Statistics don’t have feelings
Even if you dismiss the extraordinary economic opportunities emerging in the clean tech sector, the mounting costs and existential threat of climate change are proving impossible for global leaders to ignore, as Paris demonstrated. People at the very core of the so-called “establishment” – from Mark Carney, Governor of the Bank of England to BP Chief Economist Spencer Dale, now acknowledge that most fossil fuel reserves will have to be left in the ground.
Based on all the available research today – and we have reams of it in our Renewable Energy section – the fossil fuel era is rapidly drawing to a close.
And here’s the cold, hard truth: Statistics and facts don’t care whether you’re a bleeding-heart tree-hugger or dyed-in-the-wool Alberta conservative. They don’t care how badly you need your old job or whether you feel persecuted or unappreciated by the rest of the country. They don’t care about your stock portfolio, your values, your moral compass, your grandchildren, vanishing caribou herds, wild salmon or spotted owls. And we, as a nation – as citizens, employers, employees, parents, youth, pensioners, taxpayers and voters must decide whether we wish to embrace these new realities or bury our heads in the sand – a particular bitumen-laden variety.
Leaping in circles
Canada’s political parties, provincial and federal, are all grappling with these realities in their own, interesting ways – a spectacle now on display from coast to coast to coast.
The NDP’s gong show of a recent federal convention is a prime example. Following his election failure last Fall, Thomas Mulcair absorbed two final nails in his coffin – both over the same issue but from completely opposite ends of the party’s political spectrum. He was too centrist for the party’s left wing, while his openness to the Lewis/Klein faction’s anti-pipeline “Leap Manifesto” angered the Rachel Notley-led provincial party in Alberta, (not to mention working the usual pundits into a tizzy over its sheer audacity, pronouncing the NDP dead upon the manifesto’s arrival). Why on earth Mulcair let the convention happen on Notley’s turf is anyone’s guess.
But Notley fully merits recrimination for her recent ultimatum on pipelines. She won’t get them through BC – even Kinder Morgan is a non-starter, which, apparently no one but we British Columbians, in the “West beyond the West”, realize. The particular blend of First Nations, court challenges, municipal government opposition, powerful coastal activists, widespread public condemnation and complete lack of economic or “jobs” case for the project means that it simply will not happen. I’m taking bets for anyone foolish enough to lay one against me. I’m already collecting on my Enbridge wagers from 5 years ago. Notley will learn soon enough.
BC or Quebec – take your pick
As for Energy East, well, Notley’s got another fiercely “distinct” Canadian province to contend with in the form of Quebec. Good luck with that one.
[quote]Petroleum consumption in the US was lower in 2014 than it was in 1997, despite the fact that the economy grew almost 50% over this period.[/quote]
In this energy climate, there simply is no argument for expanding export capacity.
Trudeau singing same tune
You can lump the Trudeau government in with Notley on this one, as it continues to advocate for many of the same projects and backs BC’s LNG pipe dream. One of these days, Justin may learn that he can’t have his cake and eat it too – but we appear to be a long way away from that today. In the meantime, he would do a lot to assuage British Columbians, First Nations and the environmental community if his cabinet declined to issue the permit now before it for the controversial Lelu Island/Petronas-led LNG project near Prince Rupert.
BC NDP flip-flops on LNG
This project and many others are the brainchild of BC Liberal Premier Christy Clark, who evidently has not received the memo on all the above realities (though we at the CSC have sent her many!). Up until recently, the John Horgan-led provincial NDP was fully on board with fracking and LNG, then it showed signs of changing its tune – a welcome development that would have gone a long way to helping it get elected in May 2017, for the first time in 16 years.
That was, alas, before Horgan flip-flopped back to the pro-LNG side, kow-towing to union pressure. Besides the obvious political, moral and scientific problems my colleague Rafe Mair addressed with this catastrophic error in judgement by Horgan, even the labour justification is plain wrong-headed. Horgan and BC Building Trades boss Tom Sigurdson clearly don’t understand that there are no jobs to be had for British Columbians in LNG. Even if a single project of 21 proposed gets built – which is looking increasingly unlikely given global crash in LNG prices and steady withdrawal of capital – the BC Liberal government has already promised many of these jobs away to China, Malaysia and India in the form of cheap, foreign temporary workers!
I laid out in these pages precisely how the NDP could successfully re-brand itself, incorporating all these insights. In short, the key to their success is the following slogan and all that goes with it: “New Democrats, New Economy.” But the chances of them getting with the program are diminishing by the day.
The same logic and opportunities apply in Alberta, though it’s an even steeper hill to climb there. I appreciate the bind Ms. Notley finds herself in – which explains her backpedaling on a number of more progressive energy policies she ran on last year. Her pollsters must be telling her she’s got to make these grandiose declarations on pipelines and undercut the federal party if she has any hope of getting re-elected.
She faces an electorate that is understandably anxious about its future – that only wants things to go back to the way they were in the good old days of $100-150 oil. It’s a scary thing not knowing how you’re going to feed your family. But things in Alberta aren’t going back to the way they were before, no matter how uncomfortable that reality is. And giving people false assurances will only make the problem worse. The only thing that can rescue the Alberta economy and bring jobs back is creating new ones – and there are real ways that can happen (more on that in a moment). Alas, for the moment. it’s easy to see how that may yet seem politically impossible to Ms. Notley.
Not all wine and roses
OK, to the skeptics who’ve gotten this far in the article, first of all, thank you for hearing me out. Second of all, you’re right about a lot of things.
You’re correct that we won’t suddenly replace fossil fuels with renewables across the board. There will necessarily be a transition period and quite possibly a place for fossil fuels in the mix for some time to come. We also won’t be able to sustain the level of growth, materialism and waste in our economy that relatively cheap, abundant fossil fuels have enabled over the past century. Some tough adjustments will need to be made there.
Moreover, not all renewables are created equally – and they all have their problems. Most are not “baseload”, meaning they’re only available intermittently. The exceptions are geothermal (a huge untapped opportunity for places like BC), and large hydro dams, which aren’t clean or green for a whole host of reasons.
The solution to the intermittency issue is multi-fold. It requires building a grid with overlapping sources which fill in each other’s gaps at different times. In places like BC, Manitoba, Quebec, and a number of US states, those large dams we already have can underpin newer, non-baseload renewables. Geothermal can do the same and has for decades in San Francisco. Iceland gets more than half its electricity from it.
There are other problems with renewables though. Aggressive incentives for renewables like feed-in-tariffs have led to soaring electrical costs and energy poverty in places like Germany and Ontario, while in BC, our disastrous private “run-of-river” sham has ravaged watersheds and put BC Hydro on the brink of bankruptcy. The renewable energy sector is no more immune to greed, corruption, foolishness, and government mismanagement than the fossil fuel sector is. Anything we choose to build must be done carefully and with the public interest in mind.
Conservation is the key
The most important piece of the puzzle is conservation – the only form of energy that carries zero environmental impact or cost. The good news is we’re already doing a great job at this. Americans are using roughly the same amount of electricity in their homes today as they did at the beginning of the millennium – despite population increases, more elaborate gadgetry, and the arrival of electric cars. It’s the same story here in BC.
The message we so often get from the media and our elected leaders, particularly in Canada, is, “Sure climate change is a problem and we have to act, but we’ll get to it in 20 years.” Well, the world is already getting to it. Reducing emissions is very much achievable. So is transitioning to renewable energy, and while Canada has remained on the sidelines of the green jobs revolution thus far, there are signs that’s beginning to change.
Suncor recently announced plans to build multiple wind projects in Alberta. Meanwhile, a group of oil sands workers calling themselves Iron & Earth is pushing for resources to retool their skills for clean tech. These welders, electricians, boilermakers, pipe-fitters, carpenters, etc. are well positioned to transfer their considerable abilities towards wind, solar and geothermal. They’re calling on Rachel Notley to expand Alberta’s solar training programs to include retraining of existing electricians for solar installations. And that’s no big leap.
So, we have two choices as Canadians: 1. Accept that the end of the fossil fuel era is nigh and get on with building a new economy that puts Canadians to work in sustainable, longterm jobs; 2. Remain in denial, chasing a vanishing sector, ensuring Canadians remain out of work…and then accept that the end of the fossil fuel era.
The statistics don’t care. It will happen either way.
On Monday, as Canadians got back to work following the holidays, the price for crude oil dipped below $50/barrel for the first time since 2009, offering a glimpse of the profound changes in store for the country in 2015. With some $60 Billion in oil/tar sands projects now in peril – harkening back to “dark days” of decades past – this federal election year promises to put the fossil fuel-dominant economic vision of Canada’s political leaders to the test.
Good news, bad news
If 2014 was the year of the pipeline protest, 2015 may advance the cause of environmentalists and First Nations even further, without a single placard being waved or arrest made. In a country where the economy increasingly drives political policy and media commentary, something as simple as the halving of oil prices will likely do more to reshape the future than years of ardent protests. Cynical but true.
Yet these changes are complex and fraught with contradictions. Lower oil prices stall new oil/tar sands projects and pipelines while chilling investment in LNG projects. Yet they also drive consumer demand through lower prices at the pump.
And although this setback for Canada’s fossil fuel sector should be a wake-up call as to the need to diversify our economy and energy options, in some ways it hampers renewable energy development, by eroding recent gains in cost competitiveness for clean technologies. When oil costs over $100/barrel and natural gas is $8/unit, increasingly cost-effective wind and solar look pretty good these days. Cut those fossil fuel prices in half, and not so much.
Another important contradiction to note is the benefit to Canada’s economy from a weakened fossil fuel sector. As a new study from RBC reminds us, lower fuel costs to consumers free up cash that can flow into our economy through other avenues. More importantly, lower oil prices mean a lower Canadian dollar and lower energy costs to manufacturers, both greatly benefitting Canadian exports.
In other words, the jobs we lose in Fort McMurray may be replaced – and then some – by a strengthened manufacturing sector in places like Ontario.
What this moment – and potentially extended period – of depressed fossil fuel prices offers Canadians is the opportunity, in a pivotal election year, to rethink our economic future. And this applies at both the federal and provincial level – from BC’s proposed LNG industry, to the Yukon’s debate over fracking, to Alberta’s oil/tar sands, to several pipelines planned to carry dilbit eastward.
To get the conversation started, here are a few big ideas we should be considering in 2015:
Estimates of government subsidies for the oil and gas industry range from a billion and a half dollars a year to as much as 6 billion, depending on how you calculate them and whom you listen to. So to those “free marketeers” who would balk at subsidizing clean tech innovation, just be sure to apply the same standards to the fossil fuel sector, which, we’re frequently threatened, would up and walk away if we didn’t maintain the lowest royalty and tax regimes in the world.
As our contributor Will Dubitsky has documented over the past year, Canada is the exception when it comes to major industrial nations investing in clean tech. While Stephen Harper cut our only federal clean tech innovation funding in 2013-14 (which stood at a paltry $82 million), China invested $68 Billion in clean tech in 2012, with the US not far behind. Both countries, along with Germany, Denmark, Spain, Brazil, and many others, have reaped the rewards with millions of new green jobs. Canada’s tax incentives and subsidies for clean tech lag far behind these other nations.
Even in Canada, despite a wildly unfair balance of public investment in fossil fuels compared with renewables, the employment balance is shifting. Trying to assess the real job benefits of the oil and gas industry is a tricky business, because so many different numbers and definitions are thrown around (“direct”, “indirect”, “related”, Canada, Alberta, etc.). The Alberta Ministry of Energy, for instance, pegs “oil sands related direct employment in Alberta” at 146,000; whereas a 2011 study by the the Petroleum Resources Council of Canada acknowledged just 20,000 jobs in the Alberta oil sands sector, with 130,000 total oil and gas jobs across Canada.
Renewable energy proponent Clean Energy Canada subscribes to the latter measurements and made headlines with a report last year suggesting we now have more jobs in clean tech than we do in the oil/tar sands. The comments on this Globe and Mail story discussing the report range from skeptical to apoplectic at the audacity of these dimwitted eco-pinkos. But the key take-away is that clean tech jobs are growing in Canada – and rapidly – with very little help; whereas the future of oil sands construction jobs is suddenly looking pretty bleak.
If you believe the derision of oil sands boosters, these green jobs pose no real threat to their sector, so what are we waiting for? What are we not seeing that China, America and Germany are? If jobs are the name of the game, then it’s high time we got behind these sustainable alternatives.
And that doesn’t just mean wind and solar. As we’ve learned from a number of recent reports, Canada – particularly these western provinces doubling down on fossil fuels and big, antiquated dams – are sitting on top of huge geothermal potential. This is a clean, renewable energy source which, unlike wind and solar, is as predictable and consistent as coal or natural gas – without the wild market fluctuations.
While lower oil and gas prices may inhibit investment in clean tech and consumption of renewables, as noted above, that’s precisely what government intervention is for. This is where a government with long-term vision can step in an catalyze private sector investment and job growth for the future, laying the groundwork for an economy that is not strapped to the roller coaster of fossil fuel prices.
2. Take advantage of lower oil prices
As I noted earlier, lower fossil fuel prices can be a very good thing for Canada’s economy. There is strong evidence – from the likes of Industry Canada, no less – that higher oil and related currency prices have cost our nation more jobs than they’ve created.
[quote]…from 2000-2011, the oil and gas sector created about 16,500 jobs, while, at the same time, Canada lost 520,000 manufacturing jobs. Much of the manufacturing losses are tied to the rise of the petro-dollar which tends to rise and fall with the price of petroleum…Even Industry Canada acknowledges the problem. Their report notes that between 2002 -2007, from 33-39 per cent of Canadian manufacturing job losses were due to “resource-driven currency appreciation.”[/quote]
Sure, many Canadians will feel the pinch in their stock portfolios as our overly energy-bound TSX falters, but the opportunity for benefits to Canada’s economy from lower oil prices is significant – reinforced by a recent report from RBC, which notes:
[quote]Our current Canadian forecast assumes that both consumers and exporters will respond to these incentives that will slightly more than offset the expected weakening in oil-sector investment.[/quote]
What this all boils down to is a choice: Either export raw, unrefined bitumen and syncrude – generating few local jobs – or export finished goods, manufactured in Canada. Since the latter brings more jobs and value-add to Canadian resources, shouldn’t that be a no brainer?
3. Pull the plug on pipelines
Keystone XL, for both political and economic reasons, appears less and less likely by the day. Even an expected bill from a dual-majority Republican congress can and likely will be vetoed by Barack Obama. Clinging to this vision will only further strain diplomatic relations with our southern neighbour. It’s time for Stephen Harper to throw in the towel on Keystone.
As for Enbridge and Kinder Morgan, on top of all the law suits, the widespread public opposition – culminating in highly effective civil disobedience at the end of 2014 – and the well-justified environmental concerns, these plummeting oil prices mean the demand for increased export capacity is simply not there. Many oil/tar sands projects can’t make a buck at $50 oil (which is substantially lower when you factor in the Western Canadian Select discount on bitumen) – evidenced by the cancellation of numerous expansion projects in recent months.
[quote]Canadian oil and gas projects worth a total of $59-billion may be deferred during the next three years as the ‘collapse’ in capital investment in the global oil industry echoes the dark days of 2009 and 1999.[/quote]
The same thing is happening with risky, expensive shale oil from the Bakken in North Dakota, with production and train shipments plummeting in recent months. These unconventional fossil fuels are the first to lose their lustre in low-price periods. Upstart American shale oil producers are a victim of their own success – flooding the market with too much supply. Now, with OPEC unwilling to back off with its cheaper, light crude supply, it is forcing these more costly new sources out of the market.
Added environmental hurdles and calls for increased provincial benefits and reassurances, piled on top of a weakening business case, spell trouble for these projects – once considered a cake walk compared to getting through BC.
Times change, new facts emerge. Canada needs to evolve its thinking accordingly. If Stephen Harper wants to hang onto his majority – even stay in power with a minority government – he should rethink his dogmatic devotion to pipelines unpopular with many voters and for which the economic justification is simply no longer there. The oil/tar sands isn’t the only avenue to create jobs and be strong on the economy.
4. For God sakes, abandon LNG
Christy Clark’s LNG vision is the biggest loser of them all.
Petronas’ stalling comes on the heels of many other big players getting cold feet, including Encana, EOG, Apache, and BG Group.
And with good reason. Even after Clark gave away the farm to these companies – slashing down to nothing the export tax at the root of the Liberals’ grand “$100 Billion Prosperity Fund” promises in the last election – this dog still won’t hunt.
Here’s why: With all the added costs to produce and ship LNG to Asian customers, the break-even point is between $10-13/unit of gas. When Asian prices momentarily spiked to $16-18 a few years ago, it seemed like BC exporters could make some real money exporting LNG. But as we and other pundits correctly predicted, this price bubble wouldn’t last. Now, with spot prices hovering at or below $10 – and expected to continue falling throughout 2015 – that Asian price premium is gone, taking BC’s LNG pipe dream with it.
Sure, oil prices may pick up and with them LNG prices, but the lesson here remains: LNG is expensive and volatile – not characteristics that make big energy companies likely to fork out the tens of billions of dollars and half decade in pipeline and plant construction required to get this industry up and running. Which is why the sooner we abandon this delusion and start focusing on real, sustainable economic alternatives for the province, the better off we’ll all be.
“It’s the economy, stupid.” That’s the refrain environmentally-minded folks are browbeaten with, their pipeline and climate change protests patronizingly brushed aside by wise economic pragmatists.
But in 2015, with $50 oil, we should all be on the same page for once.
The current trajectories of Canada’s predominant political economies are increasingly dysfunctional, due in no small part to the fact that we have become, in many respects, a petro state, rather than the much vaunted “Energy Superpower” that we were promised.
A petro-state, as defined by Bruce Campbell, executive director of the Canadian Center for Policy Alternatives (CCPA) is “dependent on petroleum for 50 per cent or more of export revenues, 25 per cent or more of GDP, and 25 per cent or more on government revenues.”
While Alberta is not a sovereign nation, it does qualify for “petro-state” status under these criterion. So does Norway. But the differences between the two polities ends there. While Norway manages its resource wealth extraordinarily well, Alberta — and Canada, by extension — does not.
Norway: $656 Billion / Alberta: $16 Billion
One significant difference is savings. Norway has a savings fund, known as a “Sovereign Wealth Fund” which is worth about $656 billion for a population of under 5-million people.
The differences in the sizes of these savings funds has far-reaching impacts. As author Terry L. Karl explains in “Understanding The Resource Curse,” a country (such as Norway) that diverts its resource revenue to a savings fund, is necessarily compelled to use its tax base for government funding. Consequently, citizens pay higher taxes, but the politicians represent those who pay the bills (the citizens) rather than representing the insular interests of oil-producing corporations, to the detriment of the public sector, and democracy.
Unlike Norway, Canada, is quite dependent on its resource revenues for government funding. About 40 per cent of Canada’s resource revenues go to Ottawa, and about one third of Alberta’s bills are paid by oil and gas revenues. According to Karl, these differences explain why Alberta’s tax rates are so low, (the lowest personal taxes in Canada) and why its governance is more top down, corporation oriented. As long as taxes are low, people remain relatively disinterested in issues of governance. In the 2008 elections, 60 per cent of eligible voters in Alberta stayed home.
There are other significant problems which are generated by this dependency on resource revenue. One of them is wealth distribution.
Rich get richer from energy wealth
Stephen Leahy explains in “The Bigger Canada’s Energy Sector Gets, The Poorer People Become” that economic markers can be deceiving. Consider statistics for Gross Domestic Product (GDP), which is a measure of economic activity. The GDP averaged about $600 billion per year in the ’90s and by 2012 it had increased to $1.7 trillion. On the surface, this seems laudable, but little of the wealth stayed in Canada, and what did stay went to a small percentage of the population. Consequently, income inequality has also increased.
Similarly, our reliance on the boom/bust cycle of resource revenue funding (without setting aside sufficient funds) means that governments habitually overspend. Resource rich Alberta has run a deficit for the last six years running.
This boom/bust revenue model, a hallmark of neoliberal economic theory, impacts the whole country. Safety, environmental, and human rights have become less important; international efforts to address global warming, such as the Kyoto Protocol, and the United Nations Convention to Combat Desertification (UNCCD) have been rejected; real science is now seen as an enemy to overcome; and democracy is an inconvenience.
16,000 jobs gained, half a million lost
Our mixed economy is also being decimated. Leahy explains that from 2000-2011, the oil and gas sector created about 16,500 jobs, while, at the same time, Canada lost 520,000 manufacturing jobs.
Much of the manufacturing losses are tied to the rise of the petro-dollar which tends to rise and fall with the price of petroleum. Ten years ago, the Canadian dollar was worth about 65 cents relative to the U.S. dollar. Now both dollars are at about the same level. This parity negatively impacts exports and, therefore, the manufacturing base.
Even Industry Canada acknowledges the problem. Their report notes that between 2002 -2007, from 33-39 per cent of Canadian manufacturing job losses were due to “resource-driven currency appreciation.”
Major banks, think tanks warn against Canada’s economic model
Despite the overarching negatives, including job losses and deficits, trajectories of Canada’s reigning political economies have remained unchanged. Continued on-the-ground realities, however, may force the government’s hand. Sources as varied as the International Energy Agency (IEA), HSBC, the Conference Board of Canada, and the International Monetary Fund (IMF) are increasingly concerned about Canada’s misdirected obsession with extreme energy extraction.
The International Energy Agency’s (IEA) World Energy Outlook states that “no more than one third of proven energy reserves of fossil fuels can be consumed prior to 2050.” (Barring the unlikely and exponential growth in carbon capture storage strategies.)
The HSBC Global Research Report (2013) cautions investors about capital intensive extreme resource extraction such as bitumen extraction, and recommends instead low cost companies with a “gas bias.”
Alberta needs more sustainable model: Conference Board
The Conference Board of Canada in an article entitled “Opportunity Lost? Alberta is Facing Short And Long Term Financial Challenges Despite its Oil Wealth” observes that Alberta is facing a $4-billion budget deficit, and recommends a “more sustainable fiscal model.”
Meanwhile, the International Monetary Fund (IMF), recognizing the imperatives of transitioning to a low carbon world, is urging nations to slash carbon subsidies, which would drastically slow bitumen extraction developments.
Unlike Norway, Canada’s economic and political self-determination is already curtailed by NAFTA, and by the time Harper’s next suite of corporate empowerment treaties (FIPPA, CETA etc.) are ratified, our ability to determine better political economies will be further hamstrung.
However, despite the restrictions, there still remain some possible alternatives to our current self-defeating political economy.
[quote]Alberta could collect nearly $11 billion more in taxes and still remain the country’s lowest tax jurisdiction.[/quote]
Clearly Canada’s economic direction, which is to increase rather than decrease extreme energy extraction, is hitting the wall.
Evidence shouts that we should be transitioning to a low carbon model. Creating a strong Federal Savings Fund, reducing carbon subsidies, and increasing taxes in certain jurisdictions (like Alberta and New Brunswick) would be a start, but we also need more evidence-based policy making, and therefore different governance.
The longer we wait before the inevitable and necessary transitions, the more it will cost.
As the publisher of an online journal focusing on Canada’s environment and resource economy, the issue of what to call Alberta’s oil patch is an increasingly, um, sticky subject.
Do we use “oil sands”, capitulating to the industry’s late but valiant rebranding effort, or keep to “tar sands”, which is how we’ve generally referred to it in the past? Or, like the Huffington Post and other newer, online publications, float between the two, depending on the story and author – which is what we’re doing more of lately.
Neither oil nor tar
The simple fact of the matter is that viscous, sand-encased substance lying under the Western Canadian Sedimentary Basin is neither oil nor tar. Which makes it hypocritical and disingenuous for industry advocates to dismiss their critics for using the word “tar”, while at the same time misrepresenting their product as “oil”.
One thing that substance is most definitely not is sweet, light crude. It’s bitumen. At best, after considerable refining, it will become synthetic crude (or “syncrude”) and various other fuels and petrochemical products. It is never, nor will it ever be oil.
I have always preferred “tar sands”, not because of its activist connotation, but because I believe tar more closely reflects the defining characteristics of bitumen than does oil. Of course, tar is not a single, naturally-occurring substance – rather “a very thick, black, sticky liquid…used especially for road surfaces”, as Merriam-Webster’s defines it. (On that note, a contractor I hired to patch a leaking crack between the asphalt and concrete perimeter at the rear of my building recommended a bitumen product for the job, which worked like a hot damn).
Says Wikipedia, “Tar can be produced from coal, wood, petroleum, or peat. It is black, and a mixture of hydrocarbons and free carbon.” A sticky, black substance often derived from coal or petroleum, which is used to patch roads. Sounds an awful lot like bitumen to me.
That said, I always want to reach new readers, especially with regards to the vital conversation on Canada’s energy future. And the fact is, the oil industry and Harper government, though late out of the gate, have been highly effective at marginalizing the term “tar sands” and those who use it as left-wing nuts and out-of-touch tree-huggers. I’m not saying they’re objectively right about this. Of course they aren’t, especially with the sort of polarizing language they increasingly apply to anyone who dares question the industry: “radical”, “extremist”, or the most egregious, “eco-terrorist”.
Nevertheless, the success of the oil lobby in terms of shifting the language paradigm around Alberta bitumen is a present reality which I feel compelled at least to confront.
American author stymied by oil sands/tar sands debate
Pulitzer Prize-winning American author Tony Horwitz encapsulated the issue on CBC radio’s The Current this past week while discussing his time in Alberta researching a new book. Host Anna Maria Tremonti asked, “When you got to Fort MacMurray, were you saying oil sands or tar sands?” Horowitz replied:
[quote]I was new to this topic and was sort of an agnostic on that question, but it quickly became clear to me that saying ‘tar sands’ would tar me as a hostile environmentalist. So, I began to say ‘oil sands’. Now that I’m back here in the US, I have to say most of the conversation, it’s ‘tar sands’ – but it’s a mark of how politicized this issue is that we can’t even agree on what to call this substance.[/quote]
Environmentalists frame tar sands early on
“Oil sands” wasn’t always the go-to moniker for Alberta bitumen. In a rare coup for the environmental movement, the early rounds of the PR war over Alberta’s massive bitumen deposits went to tree-hugging opponents. The term, “tar sands” stuck in the public consciousness, both in Canada and amongst a growing legion of international critics.
This was the kind of rebranding exercise that is so often the province of “free market” conservatives and their pollsters – like Frank Luntz, who advised the Bush Administration to substitute “climate change” for global warming, in order to make it sound less alarming.
Sometime around the 2009 publication of National Geographic’s groundbreaking photo essay, titled “Scraping Bottom”, the oil lobby recognized it had a real branding problem on its hands. The cover story used the term “oil sands”, but the moonscape images it yielded fit perfectly into the environmental movement’s framing of the “tar sands”.
Somewhere in there, the industry got its act together and decided to go public with a multi-million dollar rebranding effort. This included the “Ethical Oil” concept (though you’ll never get any of them to admit a direct connection between this group, the Harper government and the oil industry). But, more importantly, it revolved around a massive advertising campaign – encompassing print, online, radio and television – dousing the Canadian public in saccharine ads extolling the virtues of improved technology, remediated wetlands and indispensable economic benefits. All emblazoned with two words: “OIL SANDS “.
This on top of paid speaking engagements for two of the CBC’s most prominent on-air talents, National anchor Peter Mansbridge and pundit and radio host Rex Murphy. Neither of these newsmen and none of these outlets has seen fit to acknowledge any impropriety or ethical conflict in these situations.
So today, a survey of the nation’s leading media publications reveals that essentially all of them have chosen “oil” over “tar”. For Sun News and the CBC, “oilsands” is the most consistent choice – with the occasional “oil sands” mixed in.
The Globe and Mail prefers a space between oil and sands, as does the National Post, though parent Postmedia doesn’t appear to have a national policy on the subject yet, as The Vancouver Sun usually opts for “oilsands”. Meanwhile, CAPP itself uses “oil sands”.
Bigger than Po-tay-to/Po-tah-to
As author Horwitz noted, it’s pretty well impossible to engage in a sound debate about the oil sands/tar sands if we can’t even agree on what to call them.
Defaulting to oil sands may ensure a wider readership for our stories at The Common Sense Canadian, but in capitulating to the oil lobby’s choice of language, I recognize would be helping to legitimize its corporate, PR flack misnomer, the “oil sands.” Moreover, calling it “oil” glosses over the important differences between these two products – from the water and climate issues, to the properties which may very well make bitumen more prone to spills and more difficult to clean up. The consequences of this word choice are far more serious than po-tay-to/po-tah-to.
So how about we split the difference and call them what they really are: The Bitumen Sands?
Maybe not as catchy, but a hell of a lot more honest.
FORT MCMURRAY, Alta. – Canadian Natural Resources Ltd. is facing 11 environmental charges over the release of a potentially deadly gas near an aboriginal community in northern Alberta.
The Alberta government said the charges stem from the release of hydrogen sulphide gas on August 2012 from the CNRL Horizon oilsands upgrader facility north of Fort McMurray.
The province said it learned of the leaks after getting complaints from the Fort McKay First Nation and reports from air monitoring stations.
“These are definitely serious charges,” Nikki Booth, a spokeswoman for Alberta Environment said Friday.
“It is something that we felt we needed to do to ensure that there is environmental responsibility on the part of the company.”
The province alleges that CNRL (TSX:CNQ) released the gas, failed to use its equipment properly, failed to report what happened properly and provided misleading information to the government and the Fort McKay First Nation.
There was no information on how much gas was released.
Each charge carries a possible maximum fine of $500,000.
Environment Minister Robin Campbell was not immediately available for an interview. He instead issued a written statement that doesn’t mention CNRL or the charges, but says the government takes environmental protection seriously.
“Our ability to open new markets for our oil — or to maintain the markets we have today — depends on our credibility when it comes to responsible oilsands development,” the statement says.
“Alberta is a leader when it comes to having stringent environmental monitoring, regulation and protection legislation. We are proud of this and remain committed to ensuring that we develop our resources in a responsible and sustainable way.”
Officials with Calgary-based CNRL and the Fort McKay First Nation were not immediately available for comment.
Alberta Environment says hydrogen sulphide can be highly toxic and smells like rotten eggs. Exposure at low concentrations can irritate the eyes, nose and throat or cause headaches, dizziness, and nausea.
Exposure at higher concentrations can result in sleepiness, blurred vision or death from respiratory failure.
Mike Hudema with Greenpeace Canada said the allegations show that the oilsands industry needs much heavier oversight, and the policy of simply trusting oil companies to do the right thing has to end once and for all.
He said what happened could have been very serious.
“The fact CNRL not only released a deadly gas but allegedly misled Fort McKay First Nation about it is deeply troubling and begs the question of whether monetary fines go far enough,” he said.
CNRL already faces three environmental charges over a similar release of hydrogen sulphide gas that occurred in May 2010.
Those charges allege the energy company released hydrogen sulphide gas into the atmosphere and failed to report it. These charges are still before the courts.
The company is to appear in Fort McMurray provincial court on the latest charges on April 14.
CNRL’s website says its Horizon operation includes surface oilsands mining, bitumen extraction and upgrading plants.
TORONTO – CBC News anchor Peter Mansbridge defended himself Thursday after a report that he made a paid speech to petroleum producers, saying he has never publicly promoted or opposed oilsands development.
“If I leave a speech and those in attendance think they know where I stand on any controversial issue, then they’re guessing. Because they won’t find it in the words I’ve spoken,” he wrote in a blog post on the CBC website.
[quote]I would not, do not, and have not, given a speech either promoting oilsands development or opposing it.[/quote]
The anchor of The National said he gives about 20 speeches each year, about half of them unpaid. When he receives a fee, he often donates part or all of the money to charity, he said.
Mansbridge said the network’s senior management has always approved his speaking engagements and known when he is paid for them.
Some media watchers have suggested it’s not appropriate for journalists to accept money from groups or industries that are the subject of their reports.
CBC management vetted speech
On Wednesday, a CBC report on its president Hubert Lacroix’s appearance before a Senate committee said the anchor’s speaking engagements are vetted in advance.
“And each one is looked at to make sure there is no conflict of interest with respect … to editorial coverage and to make sure that our rules are respected,” Lacroix told the committee.
“He knows that he never offers up his opinion or takes a position on anything that is in the news when he makes those speeches.”
Murphy, Mansbridge both paid to speak by oil industry
Murphy stood by his comments in a column published last week in the National Post, saying he always speaks his mind and his opinions can’t be bought.
To suggest otherwise is “an empty, insulting slur against my reputation as a journalist,” he wrote.
News Ombudsmen beg to differ
The executive director of the Organization of News Ombudsmen told CBC Radio that neither journalist should have accepted money — and that in doing so, they’ve undermined the broadcaster’s credibility.
“The problem is in the money received,” Jeffrey Dvorkin, a former managing editor for CBC Radio, told “As It Happens.”
“In the end, there is a suspicion laid on all of the CBC,” he said.
[quote]It’s about reputation here and what Rex has done, he has, frankly, I think, sullied the reputation of all CBC journalists by doing that and Peter Mansbridge hasn’t helped particularly in taking money from that source either.[/quote]
CBC defends Murphy
The CBC has defended Murphy’s actions, saying he is a freelance commentator paid to take a “provocative stand” on issues.
In a blog post published earlier this month and updated Thursday, CBC News editor-in-chief Jennifer McGuire said freelancers are given more leeway to express their views.
Full-time staff, however, must abide by an internal policy that states “CBC journalists do not express their own personal opinion because it affects the perception of impartiality and could affect an open and honest exploration of an issue,” she said.
EDMONTON – New federal research has strongly backed suspicions that toxic chemicals from Alberta’s vast oilsands tailings ponds are leaching into groundwater and seeping into the Athabasca River.
Leakage from oilsands tailings ponds, which now cover 176 square kilometres, has long been an issue. Industry has acknowledged that seepage can occur and previous studies using models have estimated it at 6.5 million litres a day from a single pond.
The soil around the developments contains many chemicals from naturally occurring bitumen deposits and scientists have never able to separate them from contaminants released by industry.
The current Environment Canada study, accepted for publication in the journal Environmental Science and Technology, used new technology to discover that the mix of chemicals is slightly different between the two sources. That discovery, made using a $1.6-million piece of equipment purchased in 2010 to help answer such questions, allows scientists to actually fingerprint chemicals and trace them back to where they came from.
“Differentiation of natural from (tailings water) sources was apparent,” says the study.
The scientists took 20 groundwater samples from areas at least one kilometre upstream and downstream from development. They took another seven samples from within 200 metres of two of the tailings ponds.
Samples were also taken from two different tailings ponds.
The analysis was focused on so-called acid-extractable organics, which include a family of chemicals called naphthenic acids.
“Their enhanced water solubility makes them prime candidates for possible migration beyond containment structures via groundwater,” the report says.
Those toxins were found in groundwater both near and far from development. But their chemical composition was slightly different nearer the mines — closer to that found in the water from the ponds.
“Analyses all demonstrate a close similarity between these two (near) samples and (tailings water), as opposed to the natural far-field groundwater,” the report says.
“The resemblance between the (acid-extracted organics) profiles from (tailings water) and from six groundwater samples adjacent to two tailings ponds implies a common source. These samples included two of upward-flowing groundwater collected (less than) one metre beneath the Athabasca River, suggesting (tailings water) is reaching the river system.”
The study doesn’t quantify the amount of tailings ponds water that is escaping. It noted that even at the sample sites near development, pond water was diluted by natural groundwater.
The research was conducted under the auspices of the Joint Oilsands Monitoring Program run by the federal and Alberta governments and funded by a $50-million levy on industry.
Industry is working to address the tailings issue, budgeting more than $1 billion in tailings-reduction technology.
Groundwater is monitored at all tailings sites to ensure it’s flowing as expected.
Operators use ditches and cut-off walls to capture seepage and runoff water, and install groundwater interception wells. Captured water is pumped back into tailings pond.
Mark Cooper, spokesman for the Canadian Association of Petroleum Producers, said the quality of water in the Athabasca River remains good.
“Current tailings pond and groundwater monitoring in the oilsands shows no substances being released or predicted to be released in quantities or concentrations that would degrade or alter water quality,” he said. “This study does not change that.”
Cooper said the association supports research such as the Environment Canada study and echoed its call for more research in the same vein.
“While the research technique used in this study shows some potential, further detailed work is required to evaluate its accuracy and adequacy for tracking oil sands process water.”
FORT MCMURRAY, Alta. – The First Nation that was the main focus of Neil Young’s recent concert tour about Alberta’s oilsands has withdrawn from a government environmental panel.
The Athabasca Chipewyan First Nation announced Friday that it is pulling out of the Joint Oil Sands Monitoring program.
The program is the showpiece of federal-provincial efforts to monitor environmental change in the oilsands region.
A spokesman for the First Nation says it made the move because the program lacks meaningful input from aboriginals and doesn’t deal with concerns about treaty rights.
Last year the Fort McKay First Nation north of Fort McMurray pulled out of the program.
Bruce Maclean, a spokesman for the Athabasca Chipewyan, says the Alberta and federal governments aren’t serious about keeping tabs on the oilsands industry.
“It appears that the Alberta government and Environment Canada see the monitoring program as a way to assure Canadian and foreign investors that the oilsands are being developed in a sustainable way,” Maclean said.
Officials at Alberta Environment and Environment Canada were not immediately available for comment.
The First Nation said monitoring programs should include clear directives to address their concerns about land use and the environment, especially how the oilsands affect air, water and wildlife.
Maclean said the monitoring program did not include enough government money to allow First Nations to have an effective role.
Earlier this month Young played concerts in four Canadian cities to raise more than $500,000 to help the Athabasca Chipewyan band pay for a legal attempt to protect its traditional land north of Fort McMurray.
Young played in Toronto, Winnipeg, Regina and Calgary, and drew fire from politicians and industry over his comments likening the oilsands to Hiroshima.
The group includes creative and performing artists, authors, scientists, a lawyer, and Order of Canada recipients.
Actor Neve Campbell, Booker-prize-winning author and Officer of the Order of Canada Michael Ondaatje and musician Gord Downie of the rock group The Tragically Hip are among those who have signed the letter.
It says that Young’s tour raised more than $500,000 to help the Athabasca Chipewyan band pay for legal fees to protect its traditional land north of Fort McMurray, Alta.
The letter also says that Canada must decide if it wants to support First Nations rights and protect the environment.
[quote]The time has come for Canada to decide if we want a future where First Nations rights and title are honoured, agreements with other countries to protect the climate are honoured, and our laws are not written by powerful oil companies. Or not.[/quote]
“Instead of focusing on Neil Young’s celebrity, Prime Minister Harper should inform Canadians how he plans to honour the treaties with First Nations,” the letter said.
Campbell said in a written statement that while she has always been proud to call Canada her home, “now as a Canadian I feel deeply ashamed to see that our government has allowed the selfish profiteering of powerful oil companies, and blatantly ignored the health, well-being, and lives of our country’s First Nations, as well as of the well-being of our world’s climate.”
Downie of The Tragically Hip said, “I stand in support of the Athabasca Chipewyan First Nations and all Canadians who find themselves with no voice in our present version of democracy, who are trying to come up with the entry fee that gets them a seat at the table where their pollution future is being discussed.”
On his Honour the Treaties tour, Neil Young is doing what poets do – forcing us to examine ourselves. This is hard enough on a personal level and it can be even more difficult when we are being asked to examine the direction in which our country is headed.
The time has come for Canada to decide if we want a future where First Nations rights and title are honoured, agreements with other countries to protect the climate are honoured, and our laws are not written by powerful oil companies. Or not.
Neil’s tour has triggered the Prime Minister’s Office and oil company executives. They have come out swinging because they know that this is a hard conversation and they might lose. But that should not stop the conversation from happening. Instead of focusing on Neil Young’s celebrity, Prime Minister Harper should inform Canadians how he plans to honour the treaties with First Nations. This means ensuring the water, land, air, and climate are protected so the Athabasca Chipewyan First Nations and other First Nations communities be able to hunt, fish, gather plants and live off the land. Canada signed a treaty with them 114 years ago, and this must be honoured.
The world is watching as we decide who we will become. Will we disregard the treaties we have with First Nations? Will we continue to allow oil companies to persuade our government to gut laws, silence scientists, and disassemble civil society in order to allow reckless expansion of the oil sands?
We are proud to stand with Neil Young as he challenges us all to think about these larger, more profound and humane questions.
Now is the time for leadership and to honour promises that we have made, not personal attacks.
Michael Ondaatje, author, Officer of the Order of Canada
Margi Gillis, dancer, Member of the Order of Canada
Clayton Ruby, lawyer, Member of the Order of Canada
Dr. David Suzuki, scientist, Companion of the Order of Canada
Dr. David Schindler, scientist, Officer of the Order of Canada
Stephen Lewis, Companion of the Order of Canada
Joseph Boyden, author
Gord Downie, musician
Sarah Harmer, musician
Naomi Klein, author
Dr. John Stone, scientist
Tzeporah Berman, author
Amanda Boyden, author
Neve Campbell, actor
Wade Davis, author
Dr. Danny Harvey, climate scientist
J.B. MacKinnon, author
Dan Managan, musician
Sid Marty, author
Andrew Nikiforuk, author
Rick Smith, author
John Valliant, author
Ronald Wright, author
“As long as the Federal Government chooses to defang and denude, rather than uphold, our once-strong Environmental Laws – to whittle them down to mere speed bumps in the way of anyone who wants to make a buck at nature’s expense – then increasingly, we must look to the courts for recognition of our treaties, for recognition of our basic human rights, namely our right to a swimmable, drinkable and fishable water future for all.
I stand in support of the Athabasca Chipewyan First Nations and all Canadians – who find themselves with no voice in our present version of democracy; who are trying to come up with the entry fee that gets them a seat at the table where their pollution future is being discussed. Every community has the right to be heard, to be able to ask, ‘Is this safe, for us?’ We should all watch the Athabasca Chipewyan First Nations and their struggle very closely and with great interest, for their struggle is coming to us all, if it hasn’t already. The day will come when your community will want to ask for truth from power; ‘Is this safe for us? For our children?’ That day you will want to be ready for the answer power gives you.”
Gord Downie, Singer – The Tragically Hip
“I fully support and stand behind ACFN and all First Nations in our country in what shouldn’t be a struggle to defend their treaty rights made in good faith with our federal government. The direction this current government has taken undermines the very values our democracy is built upon and as a Canadian and an artist I must stand up and make my voice heard. Honour the treaties, Mr. Prime Minister. Canadians are listening and are watching and soon will be voting in the name of justice.”
Joseph Boyden, Writer/Author of “The Orenda”
“I had the honor years ago to fly to Fort McMurray to sit with some of the Cree Miskisew First Nations and to hear their plight. I was appalled to hear how our country has dishonored treaties formed with the Nations 114 years ago. Appalled at the effects the toxins from the tar sands are having on their land, their water and now tragically their health. Appalled that our country has turned a blind eye on these issues and a Nation of people for the sake of greed. I have always been so very proud to call Canada my home, and now as a Canadian I feel deeply ashamed to see that our government has allowed the selfish profiteering of powerful oil companies, and blatantly ignored the health, wellbeing, and lives of our countries First Nations, as well as of the wellbeing of our world’s climate. Surely there must be other ways for us to achieve our countries energy independence without sacrificing the health and way of life of our countries’ people? I fully support Neil Young in his tour to bring attention to these issues.”
Neve Campbell, Actress “Party of Five” and “Scream”