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A pump jack works near Granum, Alta., on May 6, 2020.Todd Korol/Reuters

Nick Schumacher is a master of public policy candidate at the University of Calgary’s School of Public Policy and an associate editor at the university’s student policy blog, YYCPolicy.

These are bad days to be an oil and gas producer. The COVID-19 crisis has brought the global economy to a grinding halt, and for a while the price war between Saudi Arabia and Russia made a barrel of oil about as cheap as a set of the Hasbro game Barrel of Monkeys. With the price of Western Canadian Select, the benchmark for Alberta crude, dipping into negative territory at one point, many oil and gas producers are at serious risk of bankruptcy. Norway’s recent announcement that its US$1.1-trillion sovereign fund will divest from four major Canadian oil companies further dented the outlook.

But of course the past has seen bad days, too. In 2018, oil and gas investment declined as a share of total capital investment in Canada to 14 per cent from 28 per cent four years earlier. Investment has fallen, at least in part, because of shifting investor preferences toward industries with less risk and higher environmental, social and governance (ESG) standards. Major oil and gas developments faced serious opposition from Indigenous peoples and environmental advocates across the country, slowing the development of TMX and Coastal GasLink projects and contributing to Teck Resources’ decision to withdraw its application for the Frontier oil sands mine.

The federal government has announced a $15-billion aid package to help reduce the financial strain, along with $1.7-billion in funding for orphan wells. But while a bailout may prevent at-risk companies from going bankrupt in the near term, it’s only a band-aid solution. The buyout does not address the long-term viability concerns of the industry. The Alberta oil and gas industry was already struggling before we entered the age of COVID-19. None of the core issues that plagued the industry have changed, and this bailout for oil and gas producers does not address them.

What Alberta’s oil and gas industry really needs is serious public investment in green technology to diversify the province’s asset mix and reduce emissions. This would enable companies to attract investors concerned with ESG performance to become less susceptible to oil price drops and mitigate opposition from the environmentally minded. Furthermore, public investment in clean technology could create more jobs than similar investments in fossil fuels.

What might these investments look like? Tax credits for carbon capture and sequestration (CCS) technology, fugitive emissions monitoring and more efficient production technology could reduce emissions from oil and gas production. Procurement for renewable and alternative energy sources such as solar, wind and hydrogen might help diversify the asset mix of energy companies. Many of the major oil and gas companies are rebranding to become energy companies – such as BP, Chevron and Shell – and the federal government should support them in that transition. Public investment in clean energy could provide desperately needed economic opportunities to struggling Canadians.

There will undoubtedly be opposition to government investment in the energy industry from either side of the political spectrum, but the move would not be unprecedented. Indeed, Albertans may remember that the oil sands themselves were born from public investment by Peter Lougheed’s Progressive Conservative government in the 1970s, when the conventional oil and gas industry was struggling and unemployment was rising. Direct investment in oil sands technology development helped create the industry as we know it today, and that approach – looking to other opportunities in changing times – might work again.

But why now? Don’t we have enough to handle with the COVID-19 crisis and the associated accruing of debt? It’s indeed true that mounting health care costs and government supports will be a difficult financial problem for future governments to address, but that doesn’t mean we shouldn’t do more. Interest rates are near zero. The low cost of borrowing makes incurring debt less expensive today than in the future. Significant investment in green technology might strengthen a powerhouse industry generate government revenue to assist in overcoming the rising debt.

Prime Minister Justin Trudeau and his government have been looking for ways to better appeal to Western voters. They’ve also made commitments to act on climate issues. Investing in clean energy technology would do both. If the federal government wants to help the oil and gas industry survive, it should invest in clean technology solutions that will provide economic opportunities today and into the foreseeable future.

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