What Now for Canadian Energy?

 

Alberta’s NDP government released its much anticipated Climate Leadership Plan on a Sunday afternoon when the Edmonton Eskimos were playing the Calgary Stampeders in the CFL western final. It looked like an attempt to bury the story, but it probably wasn’t. Premier Rachel Notley had to get the Plan out before heading to Prime Minister Justin Trudeau’s first First Ministers’ Conference in Ottawa the following day. Besides, Albertans would have noticed the announcement of an economy-wide carbon tax and a death sentence for the province’s coal power industry even if Notley had rolled it out on Christmas eve during an epic snowstorm.

The Eskimos whupped the Stampeders pretty good, but it was nothing compared to the thumping Calgarians took in the Climate Plan. Already bruised from the year long slump in oil prices, the corporate and personal tax increases in the NDP’s first budget, the crash in capital spending plans by oil patch majors, tens of thousands of job losses, and this year’s defeat of Calgary-based Conservative federal and provincial governments, long-swaggering Calgarians must now feel like Canada’s biggest losers.

It will be tempting for Edmontonians and other Canadians chronically afflicted with Calgary envy, and, in some quarters, Calgary loathing, to celebrate Cowtown’s comeuppance. But that would be dumb, especially for Edmontonians, who will also pay an average of several hundred dollars a year in carbon taxes on everything under Notley’s plan. It would also be dumb for Canadians in every other province and territory who have benefitted for decades from the jobs and wealth generated across the country by Alberta’s dynamic carbon-rich economy, and whose governments currently subsidize their social programs with about $20 billion a year in net tax and equalization transfers Ottawa siphons from the flow of Alberta oil.

It is perfectly natural for humans who live off handouts to redirect some of their self-loathing at their benefactors, but in nature, most parasitic organisms take care not to kill their hosts. Alberta’s energy sector has been the milch cow of confederation for decades, and but for a few occasions when Ottawa squeezed its teats too hard, it has been content to share its bounty and contribute to their general growth and prosperity of the country, while growing ever stronger and richer itself.

This may be about to end.

For now, in a grotesque distortion of facts and reality, Alberta has become public enemy number one, at home and abroad, in the fight against climate change. To James Hansen, one of the world’s chief prosecutors of climate criminals, the oil sands are a “carbon bomb” that will destroy the planet. No less than President Barack Obama, leader of the most powerful country on earth, has slammed the door on “dirty oil” from Alberta. It doesn’t matter that the province produces a milli-fraction of the world’s greenhouse gases; every fiction has its villain, and Alberta is the Salem witch of our current Gaia fantasy.

In defiance of this long, slow process of stigmatization of the Alberta energy industry, the now-departed and thoroughly demonized Conservative Prime Minister Stephen Harper set out a decade ago to persuade his country and the world that Canada would be an “energy superpower”. His evident strategy was that the best defence is a good offense, and he gave offence to everyone who stood in his way, including the “no brainer” in the White House and the “radical foreign special interest groups” who plugged our pipelines with rhetoric and red tape.

Overall, Canada’s energy sector grew under Harper, most prolifically in the oilsands. But no major pipelines got built, big plans for west coast LNG exports went nowhere, the coal industry flatlined, the defamations worsened and, by the end of his time, the prices of almost all energy commodities were in the tank.

Canadians threw Harper out for many reasons, just as Albertans angrily dumped their provincial government for innumerable real and imagined sins last spring, but you have to think that in both cases, part of their voters’ calculation was that these Conservative guys were responsible for the mess in the energy industry.

So, with the superpower stalled, Albertan and Canadian voters have chosen a very different approach to energy and environmental policy. New carbon taxes, shuttered coal power plants, subsidized renewables, cap and trade schemes and much more are all coming or have arrived at a jurisdiction near you. Prime Minister Trudeau is leading a huge Canadian delegation to the monster Paris climate summit where, it is hoped, they will make some progress in healing Canada’s wounded brand and buying the social licence we need to continue competing in the global energy market.

It is a pivotal moment for not only Canada’s oil resource industry, but for our entire economy. And it is the theme of the Winter 2015 Edition of C2C Journal. Over the next few weeks we will publish 10 stories and essays about what happened to the energy sector during the Harper decade, what our new governments are signing us up for in Paris, and what the future holds for Canada in this tumultuous period of the Age of Oil.

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Paul Bunner is the editor of C2C Journal.

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