While I hate to say, “I told you so“, the astute reader will note that The Globe and Mail is reporting what I wrote about two and a half weeks ago: the coming metamorphosis of our biggest customer into the world’s biggest exporter of the very thing we sell them: oil.
The United States currently imports close to three million barrels of oil per day from Canada. By 2020, the International Energy Agency predicts, the US will have increased its domestic oil production by three million barrels a day while US demand for oil will drop significantly. The IEA is predicting a “transformative shift in global energy efficiency.”
This is a major wakeup call, for the energy industry and for Alberta. To summarize: Our only major customer is soon going to want a lot less of our product We can’t move out product to other customers anytime soon That’s because our product has a bad environmental reputation
Don’t jump. You’ve still got your whole life ahead of you, Alberta, and as near as I can tell, things aren’t going to grind to a halt overnight. But we have been warned – it’s time to take action.
So, what do we do?
Well, let’s start at the root of the problem. We might be able to develop a Plan B that lessens our addiction to oil as the source of most of our wealth in a relatively short time. But executing that plan will take years. For the forseeable future we’re stuck with oil – both as the thing we do that pays today’s bills, and as the source of the wealth we’ll need to invest in building Plan B.
Given that, and given that the US will soon want a lot less of our oil than we thought it would, we need to find a practical, reliable, acceptable way to move our product to new markets – or else, no new markets.
But here is where we run into the nut of the thing: that way forward to the Pacific is being blocked by a popular belief that Alberta bitumen will poison if not the entire planet, at least the west coast, and if not the west coast, someplace pristine along its overland route to the coast. When it comes to the oil sands and the environment, Alberta is losing badly in the court of public opinion.
The oil sands remain crucial to our prosperity for years to come. We live in a free society where critics can say what they want about the oil sands. What matters is not whether what the critics are saying is true, but whether enough people believe it to be true. None of those factors is going to change.
What is needed to turn public opinion is not a public relations campaign extolling the benefits of the oil sands. We’ve had two years of that already, and it has failed to change the public’s perception. Had it succeeded, the people of BC would be welcoming the Northern Gateway pipeline, not opposing it. What is needed is dramatic, meaningful, — if you will, believable – action on the environmental front by the Government of Alberta.
This means doing things demonstrably differently and demonstrably green. First, acknowledge that oil sands development is a major contributor of the greenhouse gases which contribute to climate change. I’m sorry, Danielle Smith, but the science on that is clear. Acknowledge as well the impact that intensive development like we are doing with the oil sands has on the physical environment – the land, water, air, and the birds, fish, animals and humans who live in it.
Then set a goal to reduce those impacts. The goal should be “land a man on the moon” ambitious – I think making Alberta bitumen the “cleanest” (i.e. lowest-impact) oil in the world is appropriate. Set a deadline for achieving it. Then set tough rules and hard targets to get us there, similar to those imposed on the auto industry regarding safety and energy efficiency.
Alberta also needs to do something of environmental note and lasting value to mitigate our energy production – and do it with some of the money we make from being an energy producer.
An Alberta Land Stewardship Program funded with 10 cents a barrel from royalty revenues would generate $50 million per year to conserve both wilderness and working landscapes such as rangeland. It would create a conservation legacy.
While we’re getting to Plan B and a future in which our prosperity is not dependent on oil, we Albertans want to acknowledge with pride that we are an energy producer, and we want to be proud of our environmental record. We can take pride in these actions, and probably, sell a lot more of our product to plenty more customers.