This is part of Fort McMoney, an interactive documentary game that lets you decide the future of the Alberta oil sands, and shape the city at its centre. Columnists Margaret Wente and Eric Reguly will be writing about their evolving views as they play along. Read Mr. Reguly's first take.
I’m always amazed by the propaganda and parochialism that swamp our debates over energy development – especially when it comes to the oil sands, or Keystone. Too many people frame the issues as a medieval morality play – as if deciding to develop our abundant natural resources and send them to market is a pact with the devil.
Well, oil is not the devil. In fact, oil and other energy resources are the salvation for billions of impoverished people in developing nations. You can’t have human development without energy. And without energy – which, for the next few decades, mostly means fossil fuels – they will continue to lead miserable, degrading lives. So the next time you hear someone argue that we should leave our oil in the ground, give a thought to the people sleeping in the streets of Calcutta. It would be nice if they could cook their food with solar energy. But that day is still a long way off.
The biggest demand for energy no longer comes from the developed nations, where carbon emissions are actually in decline. It’s coming from India, China and the rest of the developing world, which now account for the majority of global emissions every year. China now emits as much CO2 per person as the European Union. This dramatic shift in global emissions makes the Kyoto Protocol – which is based on the global distribution of emissions in 1990 – hopelessly obsolete.
By 2030, the world will be using a lot more energy, but the mix won’t be too different from what it is now – mostly oil, natural gas and coal, with a bit of help from renewables. The oil sands are an important but not very big part of that mix. And they are not a significant factor in global warming, according to the International Energy Agency’s Fatih Birol, a leading climate economist. Whether we extract the oil doesn’t make much difference to the planet one way or another.
While we’re on the subject of myth-busting, here’s another reality check. Canada is not a petro-state. We aren’t Venezuela, or Saudi Arabia, or even Norway, whose economies are dominated by resource development. Our economy is among most diversified in the world. And we are less dependent on resource extraction than we’ve been in many years. Oil, gas and mining account for 8.3 per cent of the total economy – far less than manufacturing does. The oil sands make up only 1.8 per cent of GDP. The share of Canadians working in these industries is just 1.5 per cent. The oil sands are less important to the economy than either the environmental lobby or the energy lobby want you to believe.
Some people argue that resource development hurts manufacturing. But our manufacturers don’t oppose resource development – just the opposite. They enthusiastically support it, because the oil and gas industry is a huge market for them. All three national political parties support the oil sands too, including (with not very much enthusiasm) the NDP. No federal government of whatever stripe is going to shut them down.
Resource extraction today isn’t simply the rape of Mother Earth. It’s a highly sophisticated, technologically advanced field that has yielded astonishing breakthroughs and totally upended the world’s geopolitical energy equations. Canada has expertise that’s the envy of the world. We also have some of the most stringent environmental regulations on the planet. That’s as it should be. Energy and environmental interests don’t have to be a zero-sum game. Most Canadians believe – rightly – that responsible energy development is an achievable goal.
Sure, we face a pile of challenges. As U.S. demand for Canadian energy declines, we’ve got find a way to get the stuff to Asian markets. That means pipelines and tankers, and rigorous safety standards. It means engaging aboriginal groups as full partners. In Alberta, it means saving up some of those royalties for a rainy day – something the province has failed miserably at in the past. I still remember those bumper stickers after the crash, the one when Dome Petroleum went bust: “Dear God, I promise not to piss it all away next time.”
But I also remember Alberta’s other oil shock – the hated National Energy Program, imposed by Pierre Trudeau in 1980. The NEP redistributed (Westerners would say “expropriated”) oil revenues from west to east. In its wake, housing prices crashed and bankruptcies soared. “Let the Eastern bastards freeze in the dark,” the bumper stickers said. Even today, there are Westerners who can’t utter the name “Trudeau” without a curse.
Modern economies face all kinds of hazards. There are boom-and-bust hazards, but there are also policy-induced hazards. By now we know plenty about both. I think Canadians are entitled to a vigorous, serious, substantive debate about resource development – a debate that’s framed by reality, not by quasi-religious battles over good and evil. It’s about time to start one.