Are we dinosaurs already?
That is the question that has been on my mind since I read a report released this November by an organization known as Blue Green Canada, a coalition including Environmental Defence, Pembina Institute, Columbia Institute, a section of Tides Canada known as Clean Energy Canada and a pair of trade unions, the United Steelworkers and the Communications, Energy and Paperworkers Union of Canada.
The report – More Bang for Our Buck: How Canada Can Create More Energy Jobs and Less Pollution – basically argues that the federal government should redirect subsidies that currently go toward the oil and gas industry toward the renewable energy sector because that investment would actually spur greater job creation, simultaneously improving the health of our environment.
That may be true, although I never fully trust reports released by organizations with obvious agendas that almost certainly affect their methodologies and consequently skew the results of their studies to match their biases.
And I would have to truly scrutinize the report and the sources of information that support its thesis prior to endorsing its conclusions.
But one table of data taken from a Pew Charitable Trusts report titled Who’s Winning the Clean Energy Race really caught my eye.
The table lists the top ten nations in terms of investment in what they call clean energy in 2011. The United States sits at the top of that list with an investment of $48 billion. China is second with an investment of $45.5 billion.
The United States is currently our biggest customer for our oil and natural gas. And we obviously hope that they will continue to purchase our abundant resources if pipeline projects such as Keystone XL are any indication, despite claims that the United States could be energy self-sufficient in the not too distant future thanks to their large oil resources, the shale gas revolution and that level of investment in renewable energy.
China is seen as our market of the future, which is why all the talk is about heavy oil pipelines from the Alberta oil sands to export facilities on the Pacific Coast and the burgeoning LNG export business in British Columbia saving the provincial natural gas industry from low commodity price and poor market access issues.
Two other target markets for our oil and natural gas – India and Japan – sit at sixth and eighth on that list with 2011 clean energy investments of $10.2 billion and $8.6 billion, respectively.
Canada is eleventh with a paltry $5.5 billion investment in clean energy in 2011.
That is a serious issue.
As we seem to be pinning the faint hopes of our national economy on an oil sands industry that faces stiff moral opposition from all manner of environmentalists across the globe and an LNG export industry that is probably six years away in a best case scenario at this point, our target markets for those products – especially the United States and China – are investing massive amounts of money into ensuring that their demand for oil and natural gas is going to be steadily decreasing.
The Chinese demand is likely to last for a long time still, but we are also competing with other resource-rich countries such as Australia and the United States for that particular market.
And the United States can play that game because their demand for our oil and natural gas is likely to disappear.
We could easily lose that race.
One might respond to that news with the notion that it is perfectly fine to keep our oil and natural gas in Canada because we need those resources, too. But that ignores the huge cost of developing the oil sands and improving refining capacity to process the bitumen, the cost of building new pipelines and transporting oil and natural gas across the country, the cost of producing natural gas in remote northern locales when the domestic price of natural gas is far below the world price for LNG.
That explains the need for foreign investment and the need to secure access to new foreign markets.
But only if we insist on being a petro-nation first and foremost.
It is a difficult thing to say when living in the oil and gas town that is Fort St. John, but we should probably just admit that the oil sands and LNG dreams are dead.
That future that we are trying to build is already the past.
But that isn’t to say that we should stop developing Alberta oil and British Columbia natural gas. They should still be important sources of energy for many years as we slowly transition to solar power, as we perfect wind power to address public and environmental health issues, as we redesign our transportation so that vehicles run on everything from natural gas to methanol to clean electricity, but not conventional gasoline, as we construct new houses and office buildings that are not only energy efficient, but energy self-sufficient.
The problem is that we probably won’t see the fate that we are about to suffer and consequently change our path because we are seemingly all too happy to wander into the new world basing our economic strategies on old world paradigms.
The age of petro-nations is over.
And if we don’t accept that fact now, we are dinosaurs.