By David Yager
A month after the discouraging federal election it is time to acknowledge even our most supportive politicians cannot protect Canada’s oil and gas industry from the vocal, powerful and intellectually disingenuous climate alarmist movement.
The pursuit of better treatment for the west in Canada by the political leaders we support – Jason Kenney, Scott Moe and Andrew Scheer – are comforting and enjoy broad support. But they won’t move the needle quickly on the issues that matter, like jobs and corporate survival.
Therefore, it is time to commit to speaking louder but in other ways. Think about that famous quip from the Monty Python TV comedy series, “And now for something completely different.”
For the most part petroleum politics has been simple. The industry has loyally and stubbornly voted small “c” conservative (or the closest thing on the ballot to it) through its various federal and provincial manifestations; Social Credit, Progressive Conservative, Reform, Conservative Party of Canada (CPC), Saskatchewan, Wildrose and United Conservative.
But with the Trudeau Liberals returned to office, the relationship between the oilpatch and domestic politics remains very challenging.
The results of the October 21 election were the most polarizing since Pierre Trudeau’s Liberals won a majority government in 1980. That year the Liberals won only 2 of 77 seats west of the Ontario border, both in Manitoba. Last month team Justin Trudeau carried only 15 of 104 ridings in the four western provinces, somewhat better than 1980 but identical in Alberta and Saskatchewan; zero.
A different outcome for the federal vote seemed possible for a while this year due to Justin Trudeau’s well-publicized and self-inflicted meltdown. Because he was so plagued by scandal, corruption, incompetence and abysmal judgement that no sitting Prime Minister has endured in recent memory, I went on the record stating that the Trudeau brand was so badly damaged that no thinking Canadian could possibly reward him and his government with a second term.
Wrong. When the votes were counted the Liberals were returned to office with a minority government, 157 of 338 seats. Nearly two-thirds of the voters, 66%, rejected Andrew Sheer and the CPC which won 121. The Liberals were down 20 and the CPC were up 26 which looks good. But only on paper.
The three parties that won the remaining 59 seats – Bloc Quebecois, NDP and Green – are committed opponents of new oil pipelines. They care much more about pleasing their political power base than what that might mean to the people and economy of Alberta.
This was called the first climate policy election and the CPC chose not to participate. Scheer campaigned on ending the Liberal carbon tax. The rest of the CPC climate platform was continuing to charge levies on large emitters, exporting low-carbon technologies to other countries, and the vague concept of an energy transportation corridor in the middle of nowhere, whatever that might be.
For the Liberals, Bloc, NDP and Greens, climate was front and centre. Each of these parties assured Canadians that they would be safer and protected if they trusted the government to legislate changing the chemical composition of the atmosphere, starting right here in Canada.
That this was impossible for Canada to do alone is irrelevant. As has been written many times in many ways, elections are no place for serious policy discussions.
Worse yet, the CPC was all but shut out of the three giant urban centres that are home to 35% of Canada’s population; Montreal, Toronto and Vancouver. Over 65% of Canadians live in 100 cities of 50,000 or more and only 19% live in areas that are today classified as rural. Outside of western Canada, the CPC did poorly in all of them.
Urban Canadians have no idea where their resources come from. Gasoline is at the corner. Jets are miraculously always fuel of fuel. Food is on the shelves, clothing in stores. Public transit works. Doesn’t everybody have bus service? City dwellers can easily get what they need without being troubled by the complexity of the supply chain since virtually none of its is permitted within urban city limits.
If you look at the October 21 as a national referendum on carbon taxes and the future of Canada’s oil and gas industry, we lost hands down.
A year ago I finished writing a book about Alberta, its oilpatch and climate change. Furious about the shallowness of the public debate and shameless partisan politics, I wanted to explain to myself and everyone else how we got into this mess and my conclusions on how to get out of it. After months of research to fully understand how oil had gone from miracle to menace (the book’s title), I wrote the following in the Epilogue, my personal summary of months of work and hundreds of pages of words.
“What conservative politicians must do—for the benefit of the country and the world—is admit climate change is a problem, not a socialist plot. Having conceded there is cause for concern, they must further concede the solution lies in government policy and provide the appropriate direction. People want to hear that. They want leadership. They want peace of mind. They also want to help. If they believe it will work, they will do their part. If conservative governments don’t provide leadership voters will migrate to those who will.”
This followed my earlier observations where I wrote, “…I found personal responsibility for fossil fuel consumption was sorely lacking. I encountered little understanding that a rapid phase-out of fossil fuels without an economically viable replacement would have a huge negative impact on billions or people…I had no idea of the vastness of the chasm that exists between what people want the world to be and what the world actually is. Whatever the science, or the allegations, or the cause, climate change is real if for no other reason that millions of people in Canada and hundreds of millions more around the world believe it is.”
Facts don’t matter in modern politics. We stand reminded of that today.
The reaction to the re-election of the Trudeau Liberals in Alberta and Saskatchewan has been loud and harsh. Cries of righteous indignation fill the mainstream news media and on-line outlets. An increasing number of people believe separation from the rest of the Canada is the only solution, a move coined “Wexit”. Gatherings of the disaffected are becoming increasingly common where participants fulminate about the terrible treatment the west endures from the rest of the Canada.
On November 9 at a convention in Red Deer, Premier Kenney announced the creation of a “Fair Deal” panel of important Albertans and MLAs to explore “Firewall 2.0”, an update of a famous letter published by Stephen Harper and others in 2001 outlining a new definition of “fairness” for Alberta in Confederation. This would involve Alberta taking over its public pension plan, police force and tax collection and even writing a provincial constitution. These are hardly radical as Quebec and Ontario already most of these things.
A list of demands of what Alberta needed to be less recalcitrant in the Canadian federation included many pro oil and gas positions including completing Trans Mountain, repealing the Bill C-48 tanker ban, amendments to the “no pipeline act” Bill C-69, transition funding for displaced oil workers, acknowledgement that Alberta’s large-emitter carbon tax regime does not need replacement, ensuring Teck Resources’ Frontier oil sands mine gets built, and creating green jobs by accelerating abandoned well retirements.
All good stuff.
But this rarely makes the front page because of more juicy news items like the barely civil war of words between Alberta and Quebec, the injustice of equalization, separatism, and the costs associated with an Alberta pension plan, tax collection and police force.
The shallowness of the public debate is appalling, even in Alberta. It is all “gotcha” politics at its worst and most trivial. One of Premier Kenney’s investment banker global ambassadors – David Knight Legg – is under fire for spending $18,000 for short trips to London to persuade major financial institutions to not withdraw financial support from Alberta.
What followed was predictable public outrage with the NDP demanding an investigation of reckless spending in times of budgetary restraint. In a province that has seen $30 billion in oil sands investment flee and many times that amount destroyed by insolvencies and plunging share values, $18,000 is scarcely a rounding error. When the NDP ran a $10 billion budget deficit it borrowed more than $18,000 every minute of every day.
Meanwhile, climate change alarmists are ramping up the war on natural gas, a fuel that just the other day was an obvious lower carbon substitute for coal and oil. There is stubborn opposition to LNG exports to replace coal in Asia because of alleged massive fugitive emissions of methane. In California bans are appearing to stop the use of natural gas for stoves because of methane leakage in the moments between opening the gas valve and ignition.
Due to relentless pressure from the anti-carbon movement, the European Investment Bank has joined the carbon capital squeeze and vowed to end all loans to all fossil fuel projects by 2021. A November 16 article in oilprice.com read, “This is meant to force European countries to put an end to new gas-fueled power projects and keep in line with the Paris Agreements and EU CO2 emission targets…it will bar investments or financing for most fossil fuel projects, including those that employ the traditional use of natural gas.”
There are two LNG export projects in the works on Canada’s east coast, Pieridae in Nova Scotia and Energy Saguenay in Quebec, intended to supply Europe. The message from some voices Europe is “Thanks, but we’d rather freeze and support the Russians.” Incomprehensible political decisions are no longer confined to Canada.
The battle continues. As Saudi Aramco moves to go public, it is claiming it the world’s lowest-cost, lowest-carbon petroleum source. Its prospectus advises Saudi oil has less full-cycle carbon emissions than oil sands and that Saudi Arabia will a reliable supplier of cheap and green oil until technology renders petroleum obsolete. Notwithstanding security supply and human rights issues (no bombing of production facilities for two months, no murders in foreign countries for over a year), we’re now competing with the Middle East for the moral high ground on crude and climate.
Canada’s oilpatch must quickly move from being policy takers to policy makers. We must change the channel. Everyone knows producers and politicians are trying to explain how we’re producing cleaner oil, but it is still oil. Everyone knows our opponents will never actually quit using carbon resources, but the relentless anti-oil barrage continues. Everyone should also understand by now that facts don’t matter because, in the absence of the scarcity of anything, modern society is all about feelings and perceptions.
How do capture the imagination of those who have their minds made up about oil and gas, even when you know they are wrong? How can Quebec trash Alberta oil yet import it from the Middle East?
In mid-November Shell Canada issued a public statement about its long-term commitment to Canada. One line in a Bloomberg News report read, “…hydrogen refueling stations for fuel-cell vehicles.” Hydrogen is the most plentiful clean-burning energy source in existence, leaving nothing behind after combustion and heat-creation except water.
Two countries without any domestic natural hydrogen supplies (90% comes from methane) are Japan and South Korea. Yet their two major carmakers, Toyota and Hyundai respectively, are investing heavily in hydrogen fuel-cell automobiles as a substitute for conventional ICE or electric vehicles. There are already 100 hydrogen refueling stations in Japan, and Hyundai is planning to produce 700,000 hydrogen fuel cell cars annually by 2030.
Where is our industry and province on retail hydrogen? The “hydro” in “hydrocarbon”? Natural Resources Canada has a map showing all the hydrogen refueling stations in North America. It shows one in Burnaby operated by Shell – Hydrogen Energy and Technology Company. There are several in California but that’s it for North America.
According to Toyota’s website, you can already buy a fuel cell powered Toyota Marai in Vancouver. Marai is the Japanese word for future. https://media.toyota.ca/releases/toyota-mirai-fuel-cell-electric-vehicle-for-sale-in-b-c-starting-in-july
Why doesn’t Alberta’s oilpatch – under a name like “Canada’s Cleanest” – open free hydrogen refueling stations in downtown Toronto and Montreal? The world’s cleanest fuel. No charge, courtesy of your fellow Canadians. Why don’t we have one of these today in what is surely the hydrogen capital of Canada, Fort Saskatchewan?
If nobody uses them once they exist then finally we can ask, “What’s wrong with you people? Don’t you care about the planet?”
Not economic? Is the current heavy oil differential or the exodus of capital from the ‘patch because so many Canadians despise our product and industry economic? Imagine how it could change the discussion about hydrocarbons when young Canadians learned one of the largest sources of the world’s cleanest energy is in their country.
What about carbon, the other half of hydrocarbon? The element that is the essential building block of life? When you say want to eliminate carbon, are you sure you know what you’re talking about? Your body is 18% carbon. Better keep some of it. Graphene. Nanotechnologies. Carbon fiber enforced composites began replacing high energy-input aluminum for airplanes years ago. Where is our leadership and communication on all the incredible things that can and should be done with carbon?
Not economic you say. Too expensive. Surely the billions and billions the country is vaporizing through lost investment or subsidizing through interruptible renewable electricity and electric vehicles should help a few more people realize that cost no longer matters.
Alberta is the country’s leading source of hydrogen and carbon, the world’s cleanest energy and the essential building block of life and most promising source of new and advanced materials on earth. Destroy our economy and industry at your peril.
E&P companies are hydrocarbon producers. It is insurmountable to split a few more molecules and become pure hydrogen and carbon producers? Or put others into the business?
The last election proved many Canadians are terrified of the future. This is the same country most of the world would love to live in (except for the weather – we’ll never depopulate the more temperature climatic regions). Greta Thunberg’s main message to our youth is they are doomed.
Surely we can shape a more positive future for our own resources, our own people and our own country. One that is entirely within our grasp.
In the book I wrote extensively about replacing prayers with plans. It reads, “….while Alberta must continue on the path of contributing towards reducing emissions to combat climate change, the province must do it differently…Canada’s carbon resource industries should not be penalized…they should be encouraged to find, foster, develop, and commercialize products, processes, and technologies that can make the production, transportation, and consumption of fossil fuels as efficient as possible and with increasingly lower emission levels.”
“The real solution to the climate change challenge lies with research, development, technology and the private sector. There is an enormous economic opportunity for the dreamers of the world today. The prize for inventing and commercializing a replacement for fossil fuels with a reliable, affordable, and benign energy source could be the greatest financial home run in history. The flaw is so many people remain convinced government knows best, and so many of the thought leaders on the subject either blame or don’t trust the private sector.”
“Alberta’s carbon-resource industries can and should be rebranded from the world’s enemy to its salvation. Alberta companies, educational institutions, entrepreneurs, inventors, and scientists must be challenged, encouraged, and supported to be recognized as world leaders in low-emission hydrocarbon exploration, production, transportation, and by-product refining and manufacturing processes.”
“The private sector has done this many times before. It was industry, not government, that created the food, medicines, shelter, and clothing that has enabled the world to support many more people in more safety, security, and comfort than ever before at a population level predicted to be impossible.”
“This will result in hundreds, perhaps thousands, of tiny economic decisions that will collectively have an enormous impact on the atmosphere and the economy…The government’s obligation will also be to ensure there is enough liquidity in the system so that when entrepreneurs go looking for financial support, somebody besides the government actually ponies up some risk capital.”
Moral oil. Cleaner oil. Safer oil. Responsible oil. Canadian oil. It doesn’t matter. This won’t work. It’s still oil, and oil is dirty.
And now for something completely different. Not hydrocarbons, but hydrogen and carbon. Same product, different packaging.
Are we up for real change? Talk not about how awful things are but how good they could be? Stop calling people who don’t understand they can’t live without carbon resources hypocrites and instead figure out what they need to hear to change their minds?
Don’t get me wrong. I support Firewall 2.0. Fighting back in the same political arena that is senselessly collapsing our economy is essential. The foundations of Canadian climate politics are fundamentally disingenuous; that more and bigger government, stronger political will and sacrificing the Canadian fossil fuel industry will take us painlessly to a cleaner future.
And hearing lectures from Quebec’s transfer-payment loving oil-burners about how we should conduct our affairs drives me nuts. Made me so mad last year I wrote a book about it.
But our industry must understand and acknowledge the power and direction of the anti-carbon headwinds and do something different. Our fellow Canadians cannot and will not survive without our oil and gas. Let’s do a better job explaining how and why.
Living in Calgary, David Yager is a retired oil service executive, long-time oil writer and author of From Miracle to Menace – Alberta A Carbon Story. More about the book at www.miracletomenace.ca