Carving out a place for Canada's energy in an unkind world

Compared to energy giants like Saudi Arabia and the USA, Canada is a pipsqueak at throwing its considerable weight around. If there is a time for that to change, now is it. Let's look at a blood tax, argues Stewart Muir.

Which world leaders would be happy to see Canada stop producing its own energy?

post-image.jpgDon’t miss a new PBS exposé out March 29 featuring human rights abuses in Saudi Arabia, which sold $100 billion worth of crude oil to Canada between 2012 and 2015. Those who have seen the documentary say the footage is shocking to behold. 

It’s a mystery why Canada is content to import billions in blood oil from Saudi Arabia while at the same time pursuing policies at home aimed at eliminating Canadian oil from the market.

Just before Christmas, the Saudis beheaded Filipino Joselito Lidasan Zapanta because he could not pay a ridiculous $1 million fine. 

Policies aimed at curtailing western Canadian energy development will only make us more dependent on bloodthirsty Saudi oil, while eliminating tens of thousands of our best-paying jobs.

If we are content to let eastern Canada source its oil from a country that executes citizens who question the government, and at the same time sell armaments to Saudi Arabia, what does that say about our own democratic system? 

Yet, if Ottawa has any particular concern over the soaring suicide rate among Canadian oil patch workers, that would be news to me. 

For those who don't believe you have to give up the economy to save the environment, the resulting question is simple: What is the way to stand up for Canadian families and stop rewarding Saudi princes for their despicable practices?

One practical step we can take today is simply to ensure that every Canadian policy on fossil fuels applies equally to all of our energy imports.

Until 100% of our imported products are in compliance, no Canadian products should face domestic prejudice.

I understand we need international trade, but Ottawa’s eagerness to source oil from a savage regime while taking measures to curb the oil sands remains a sore point with me.  

One possibility is imposing a blood tax, much like a carbon tax, that rewards social responsibility. Our Charter of Rights and Freedoms, our Parliament, and our courts provide a yardstick that we could use to measure others against. 

Obama’s Arctic vision and what we could learn

On a similar topic, last week saw a major existing supplier of Canadian oil take strides to massively increase its own oil production. I’m talking about the United States and its decision to pursue a long-term exploration plan for the high Arctic.

Come again? Isn't President Obama a climate crusader working hard to end the burning of hydrocarbons and stop Canada from building pipelines?

No, actually, he's not. In case you thought moral suasion from Canada on addressing climate change was having any effect whatsoever on the United States, think again. The fact is, the United States is obsessed by its own energy security and there is no way it will jeopardize a long-term supply of the fossil fuels that provide about 80 per cent of its needs. 

arctic.jpgLast week’s news from the U.S. Bureau of Ocean Energy Management will result in new oil and gas leases off the coast of Alaska. The map of the area that could be opened to drilling includes offshore territory Canada claims as its own. 

Why is the United States doing this now? Simple: because Americans have a long-term plan for energy.

"If development starts now, the long lead times necessary to bring on new crude oil production from Alaska would coincide with a long-term expected decline of U.S. Lower 48 production,” reported the National Energy Council, which advises the U.S. government. "Alaskan opportunities can play an important role in extending U.S. energy security in the decades of the 2030s and 2040s.” (See page 13 of the report).

So while the U.S. is taking pragmatic steps for long-term viability as an energy-intense nation-state, in Canada we seem to be at risk of basing energy planning on “100% carbon-free” slogans that appeal strongly to some voters. Tuesday's federal budget was heavy on climate and clean-energy promises that require (and deserve) focus. Yet as the budget also recognizes, our national future depends on the ability to evolve and improve the solutions we already have in place.

A National Energy Council for Canada

Much work is now required for Canada to figure out what it means to look for new ways to "expand and green" the economy and create opportunities for citizens. For now, the lack of a coherent Canadian energy strategy also means, as CBC pointed out last week, that questions are being raised as to whether U.S. energy development in the north threatens our very sovereignty. 

Americans are no fools. They know that the longer time frame required for Arctic projects is the result of remoteness, long supply chains, short exploration seasons due to ice, regulatory complexity, and potential for litigation. The Americans know that it can take more than 30 years to line up all the necessary success conditions and that’s why they are getting cracking now.

In Canada, we also have the potential to ensure that beneficial energy sources, ones that will be subject to unwavering environmental controls, are developed. 

What we totally lack is a coherent national political vision - one that acknowledges the need to green our energy supply and lower our impact on the planet, one that also recognizes the economic realities of the present day.

An attempt at a national energy strategy, developed by the premiers at the Council of the Federation, represents a weak vision compared to the clear path that American energy planners are following. Placing national sovereignty far down the list of priorities is not a mistake that other countries are making today. Also unlike most countries, Canada also occupies an enormously privileged position when it comes to the natural assets it possesses. 

Last week, the National Energy Board reported that a heretofore wallflower of Canadian natural gas plays, the Liard Basin, is suddenly the belle of the ball. This source of gas (the cleanest fossil fuel) turns out now to be one of the biggest in the world. It straddles Yukon, BC and NWT. The upgraded estimates says the Liard has enough natural gas to meet Canada's needs at 2014 levels of consumption for nearly 70 years. Meantime, NWT is sitting on 200 billion barrels of oil identified in two NWT shale formations alone. 

What would Obama do?

One can only guess what President Obama would be saying about these extraordinary deposits were they on American territory. I bet he’d be shelving his difficult and costly Arctic ambitions in favour of something so accessible.

Instead, he wags his finger at Canada for producing its own oil, resulting in a bizarre energy policy that makes eastern Canada reliant for oil on the savage oligarchs of Saudi Arabia; increasingly, unless Canada gets its act together and builds pipelines, we will also see the United States turn us into customers for their fuels. 

We do have elected leaders at the provincial level – Premiers Clark, Notley, Wall, Pasloski and McLeod come to mind – who grasp the significance of energy security, environmental protection, and economic progress. Our prime minister has articulated good intentions, but the country is still waiting for decisions that will stabilize national prosperity and challenge our dependence on Saudi blood oil, while also assuring Canadians that progress is being made on greening the economy.

Here’s a suggestion. Let’s create a National Energy Council for Canada that is external to government and can provide trusted advice on energy security. Such a body would need to ensure that the various interest groups were consulted, in particular First Nations.

An aboriginal-led vision for the future of energy

Recently I spoke to Matt Vickers, an entrepreneur with Tsimshian/Heiltsuk and Haida roots. His concept for an all-commodity rail line from Fort MacMurray to tidewater in Alaska may provide the breakthrough concept that puts Canada back on the map as a nation with a long-term energy vision.

The Generating for Seven Generations project aims to secure the support of First Nations, building an alliance that will unlock the resource bottleneck and enhance Canada’s environmental reputation. 

Like President Obama, Vickers takes a multi-decade approach and no doubt such an ambitious project will require many years of development. 

For the time being, however, Canadians do need to ensure that landlocked Canadian oil and gas is able to reach markets. I’ve calculated that what some lobbyists are demanding Canada do by shuttering its petroleum industries is equal to vaporizing the entire economy of Vietnam. 

One thing we should be reminding ourselves is that Canada already stands apart as both an environmental and an economic leader. Recently I examined data showing the performance of the world’s top 20 nations on these fundamental metrics. It turned out that no other country outranked Canada for a combination of economic and environmental performance. The diagram here tells the story (click on the image to expand it).

CLIMATEPROSPERITY.jpgYes, it’s true that there will always be the motivated interests who insist that Canada is a bad actor on the environment. In fact, Canada deserves kudos, not condemnation, for its environmental record. More Canadians needs to be saying this. Money being spent today to denigrate Canadian workers and industries would be much more productively employed in places like Saudi Arabia where human rights are not respected, and the truly committed might be able to save some lives.

Ottawa’s recent decision to approve the Woodfibre LNG project is a glimmer of hope. Although the project is relatively small in scale, it’s still an important bellwether to indicate where the federal government will land on bigger decisions. At Resource Works, we were quick to congratulate the environment minister for doing the right thing.

In the face of climate change, we know that investing in improved technology is the key to reducing the harmful side-effects of our fossil-fuel reliant society. Recent stricter rules for methane emissions, for example, should be understood as a challenge to be inventive – not an anchor being tied around the neck of the energy economy. At the recent Protohack event in Burnaby, I met with a group of young innovators working on a plan to monitor methane escape from above. This is the kind of thinking we need more of. 

A cri de coeur from working families

We also need to respect the views of northern residents, including aboriginal residents.

FNforLNG.jpgLast week, across rural and urban northern British Columbia, many hundreds came out to show their support for liquefied natural gas exports. Their voices, supported by federal scientists who weighed in favourably about the Pacific NorthWest LNG project after examining all the evidence, will likely be important ones over coming weeks as  cabinet prepares to make a decision on what is said to be the largest capital investment in Canadian history. We have also seen the coastal Lax Kw’alaams First Nation throw its support behind the project.  

Politicians following the polls might calculate they can ignore rural interests and pander to the urban voter. Ignoring the root creators of national wealth – that is to say, our resource toilers – would be a disastrous move, since about one-third of the economy depends on their foundational work. 

The choice is clear.

We can lavish our hard-earned money on the Saudi princes who killed Joselito Lidasan Zapanta (little known fact: the Saudis behead people like others take vitamins: once a day).

Or, we can sustain a homegrown industry that builds aboriginal self-reliance and dignity for tens of thousands of Canadian families, while respecting the environment. 

Sending the wrong signal to global investors at this delicate time for the world economy would be devastating for a generation of Canadian economic hopes.

Many countries try to treat their own products preferentially over imported ones; for Canada today, all we need to do in the case of Pacific NorthWest LNG and other energy projects is to ensure that we don’t treat home-grown energy products more harshly than identical goods we import from abroad.  

I'd be seriously astonished if our federal cabinet really prefers to buy Saudi blood oil over Canadian oil. The new leaders we have in Ottawa may not have chosen these conditions, but they do have the power to make change. 

The solution is simple: a blood tax to eliminate Canada's unacceptable $100-billion Saudi oil habit, combined with a level playing field for our own goods. 

Stewart Muir is an environmental historian, journalist and founder of the Resource Works Society based in Vancouver, B.C. 

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