May 8, 2020
Over the past few months, Canadians have been through a life changing crisis.
From the COVID-19 pandemic’s 4000-plus deaths across the country, to its preventative lockdowns, physical distancing and economic devastation, most of us have never experienced anything remotely like it.
The same holds true for several Canadian industries, especially the oil and gas sector which has faced not just lower demand for petroleum as a result of the virus, but also a virus-related price war between two of the world’s largest crude oil producers – Russia and Saudi Arabia. The historic one-two punch has been devastating for one of Canada’s most important sectors.
What else could possibly go wrong? Well, consider the latest onslaught: When Canadians appear largely committed to working together to support our disintegrating economy irrespective of his or her job, industry or personal values and beliefs, the oil and gas sector and its hundreds of thousands of workers are facing a barrage from a third front.
I’m referring to the reckless assault from former Green Party leader Elizabeth May and current Bloc Quebecois leader Yves-François Blanchet, in which they recently claimed “oil is dead” and warned the federal government against providing support for this critical sector.
Have COVID-19 and the price war created serious concern over the short-term health of Canada’s and the world’s oil and gas industry? Yes! Should we follow May and Blanchet and simply abandon one of our most important sectors without a fair assessment of the facts? Of course not.
At their controversial news conference, Blanchet and May claimed there’s no advantage to supporting fossil fuel energy. “If we want to get out of this pandemic with a healthy global economy, don’t put money in fossil fuels at all – it won’t work,” May claimed, preferring public investment in renewables, energy efficiency and a low carbon economy.
May and Blanchet might wish to look at the Short-Term Energy Outlook prepared by the US Energy Information Administration (EIA) in early April, which states, “EIA expects global petroleum and liquid fuels demand will decrease by 5.2 million barrels per day (b/d) in 2020 from an average of 100.7 million b/d last year before increasing by 6.4 million b/d in 2021.”
In other words, oil demand is projected to recover post COVID-19, increasing by 1.2 million barrels per day in 2021 over last year.
I’ll agree with May and Blanchet on one point: Canadians would be wise to continue investing in renewables and energy efficiency, but realists acknowledge it’s not enough. A strong post-COVID-19 recovery of Canada’s economy requires our entire resource sector, and our oil and gas industry plays an outsized role in our economic prosperity.
In inviting May and Blanchet to tour the oilsands once it is safe to do so, here’s how the leadership of McMurray Métis Local 1935 explained matters recently.
“Yes, we need to look at other ways to diversify the economy, but for now oil is going to remain a major commodity,” McMurray Métis CEO Bill Loutitt said in a story in Fort McMurray Today. “It’s there and we should continue producing it in a safe, reliable way.”
I couldn’t agree more. We can’t turn a blind eye to the oil and gas sector and its 530,000 employees and contractors, many of whom support families across the country. Nor can we ignore the combined contribution from the upstream and pipeline sectors to our national GDP in 2018 of $132 billion. (According to Viewpoint Research, the number increases to $200 billion once you add related downstream activities and power generation).
According to the Alberta Government, the province has made a net contribution to Canada of more than $600 billion over the past several decades – largely a result of the prosperity created by the oil and gas sector.
Additionally, the oil and gas sector has made incredible technological innovations and advancements over the past few decades. For example, the emissions intensity per barrel produced in the oilsands dropped by 29 percent between 2000 and 2018 and is expected to improve by another 16 to 23 percent by 2030, according to IHS Markit. Our oil and gas industry is the largest spender on environmental protection and clean technology in Canada, and we are global leaders on ESG rankings compared to other producers.
Despite COVID-19, all indicators point toward an oil industry with growing demand for many years to come. Maybe May and Blanchet should do their homework before wrongly predicting the sector’s demise. More than ever we need to work together and we need leaders to bring people together.
Cody Battershill is a Calgary realtor and founder / spokesperson for CanadaAction.ca, a volunteer organization that supports Canadian energy development and the environmental, social and economic benefits that come with it.