I was there the time Canada almost got an energy policy.
It was July 2015. Provincial and territorial energy and mining ministers were gathered in Halifax for their annual ministerial. By tradition, the objective of this type of gathering within the federation is to show Ottawa a unified front on issues as a way to challenge the federal government’s tendency to balkanize its unruly junior members.
It’s almost built to fail, with control-freak federal civil servants mostly holding the reins. Occasionally the provinces do manage to pull off something really remarkable by working together (or, as the mandarins of Ottawa might put it, ganging up on the poor, defenceless federal government). Possibly the best example in living memory is the Health Accord of 2004, the $41-billion generational fix for wait times and patient care that today reflects well for Prime Minister Paul Martin’s legacy but in truth, as anybody who was in the room knows, was the result of provincial and territorial resolve to exercise unified power over a reluctant Ottawa, at a moment of political opportunity.
On the question of Canada lacking a proper energy strategy, by 2015 it had taken years for an overarching direction to develop that the conclave of sub-national jurisdictions might be able to agree on.
Memories were fresh of B.C. Premier Christy Clark’s scuttling the Alberta-led energy vision document that was tabled at the Council of the Federation in 2012. Clark’s grievance was the unwillingness of other provinces to recognize the special challenges in British Columbia of gaining social license for the ill-fated Northern Gateway Pipeline. East of the Rockies, her “five conditions” stand was regarded as a brazen overreach that could harm future projects involving complex approvals, contributing to the impression, especially in Alberta, that B.C. is indisposed to help its neighbours. (Ultimately, with the Clark conditions in place, the Northern Gateway project was approved in June 2014, though it continued to spawn litigation and political divisions until the Trudeau Liberals killed it in 2016.)
A lot had changed between 2012 and 2015. A year after the global energy price collapse of 2014, the Scotiabank Commodity Price Index remained at its lowest level since 2007. Alberta’s recent change of government, the significance of which was then still being mentally processed, brought a fresh face to the table. The mood in Halifax was that the provinces and territories had seen enough frustration. A federal election was only months away and by the middle of summer, the prospect of an NDP government was electrifying the political scene.
Here was a chance to try again to push forward a unified policy that could then be put to premiers at the Council of the Federation table. The moment seemed right to pull out all stops and push forward an energy policy that reflected a broad acceptance of Canadian energy development. To those aware of the nation’s fiscal realities, it was a chance to embrace a holistic worldview that embraces cleaner energy sources while also affirming what skeptics, then as now, denied: that fossil fuels create prosperity and would continue to be central, growing elements of the Canadian economy.
Getting oil and gas products to overseas markets would make the nation’s manufacturing industries more competitive, ensure the continuance of take-it-for-granted services like health care, and enhance the goods-and-services supply chain that creates jobs and spurs innovation from Bay Street to the Beaufort Sea.
The draft had its flaws. Among the goals was this elephant-in-the-room statement: “Build social license to support the efficient movement of energy products, technologies, and services across Canada.” Midway through 2015, the stark truth had already penetrated industry that using the concept of social license in its broad sense meant signing on to an impossible condition of nebulous meaning.
Months before, sitting in the coffee shop during Vancouver’s annual Globe conference, I had accidentally overheard one of the country’s most divisive and fact-free anti-fossil-warriors explain to an attentive suit from one of the world’s largest oil-and-gas companies that she was willing to “provide” social license for his project. It sounded a lot like a shakedown. I don’t know if a transaction ever resulted, but if it did the goods delivered were not satisfactory: the poor sap’s company has since exited the oilsands in frustration, abandoning one of the most innovative and enlightened energy systems in the world so that his head office can tighten its focus on oil development in Africa where the welcome mat is out for energy investment. Some call this progress.
In a commentary only a year before, I had flagged social licence as the public-policy buzzword of 2014. I wasn’t fully aware of how badly things were about to go. By mid-2015, facing intransigent opposition no matter what it did, industry had twigged to the inappropriateness of a term that had originated in the practice of building local relationships for mining in developing countries. Its utility as a meaningful term became so discredited that few in industry or government would be caught dead uttering the phrase. My impression from the corridors of the 2015 ministerial was that unless they wanted to spend forever on the social-license hamster wheel, premiers would need to go back and revise this part of their thinking by finding a more creative way to describe the urgent need to succeed with authentic energy dialogue.
Surely, with advances in research, technology and regulation it would be feasible to see broad consensus on developing Canada’s domestic expertise and supply chain for the worldwide energy market? Halifax in 2015 seemed like a moment when the future of energy in all its economic, social, demographic, environmental and security complexity might finally resolve into a clear picture capable of accomplishing near-impossible coherence within a chronically dysfunctional confederation.
How hard could it be to acknowledge that fossil fuels from the responsible development of our energy sectors really do create prosperity and will continue to be central, growing elements of a lower-carbon future?
While the civil servants and their political masters closed the doors to hash things out, observers drifted away to the waterfront to wait. Outside, a boy stood fishing, Imperial Oil’s oil storage depot and former refinery visible across the water in Dartmouth.
At a pub across the street a few hours later, the band ended its final set with a raucous cover of Daft Punk’s Get Lucky:
We’re up all night ’til the sun
We’re up all night to get some
We’re up all night for good fun
We’re up all night to get lucky
Alas, staying up all night to get lucky with an energy policy did nothing for the ministerial pen-holders. The next morning, it was apparent no coherent national energy policy would be pushed forward in 2015. The communique, when it finally came, was a letdown. In the place of substantive progress toward a real national energy policy we got a list of platitudes, none of them particularly disagreeable but in aggregate amounting to a big fat meh.
A road map to strengthen the economy through wise energy development would have to wait for another time. Four years later, we’re still waiting, and our national standing has not improved.
According to C.D. Howe’s Grant Bishop and Grant Sprague in a February 2019 paper, announcements of new energy and mining projects plunged after 2015. Between 2017 and 2018, the planned investment value of major resource sector projects fell by $100 billion – an amount equivalent to 4.5 percent of Canada’s gross domestic product. According to the Office of the Superintendent of Bankruptcy, the number of Alberta insolvencies grew by 73 per cent from 2014 to 2018, or 13.5 times faster than the overall Canadian figure.
Despite this staggering loss, still we have no broad strategy on energy.
In the same period, it’s obvious that the United States has been executing a crisp, deliberate strategy that has brought almost unbelievable success. I would describe it this way:
Unapologetically develop lots of energy as quickly as possible and get it to the energy-starved markets where it will command high prices, while also increasing domestic energy self-sufficiency.
So simple. Why not just steal it, eh?
This isn’t even about politics. Under both Obama and Trump, the American zeal for energy success has transcended partisanship, just as Canada’s should.
To some extent, American success has been at Canada’s expense. We had the North American first mover advantage on LNG, but blew it. Only a few years ago there were multiple oil pipeline options, now because of deliberate decisions the short-term future of the oilsands has been dumped onto a single pipeline which, even if it is built successfully and soon, won’t even begin to solve the energy bottleneck.
Natural Resources Canada, long thought of as the yin to the environment ministry’s yang, is unable to offer anything useful since its mission now appears to be entirely based on the idea that Canada’s foundational commodity exports are bad and must be shut in as soon as possible. Every energy question now has to be filtered through climate, with insufficient consideration given to innovation.
For those wondering when, exactly, did things start to go off the rails such that in 2019 we find ourselves with no national energy plan, the fork in the road is the Canada’s Energy Transition: Generation Energy Council Report. This federal project was tied to the Generation Energy conference of 2017, in which two solitudes of Canadian energy were uncomfortably thrown together as hundreds of organizational heads and elected officials from across the country were invited to Winnipeg to see what was in store for Canadian energy.
Globetrotting green visionary Jeremy Rifkin was one of the first speakers. From the stage he proclaimed “the sunset of one of the great industrial eras”, and told us the lengthy anecdote of how he had fixed China’s energy problems by successfully counselling its leader to adopt solar panels.
While China has indeed pursued renewables as it should, Rifkin had to have been aware of what everyone else in the room also knew: that in reality, China is vastly increasing its use of crude oil, LNG and coal. Rifkin is the controversial futurist perhaps most to blame for the illusion that renewable energy is “free”. He brought a long track record of being wrong about every major socio-economic topic he has studied, from GMOs to the future of work.
The event also featured Fatih Birol, head of the International Energy Agency. “There are some blind spots in the energy debate,” Birol told us in what was a huge understatement, pointing out for example that Canada is one of only four countries with efficiency standards for trucks.
He added: “What I’m not sure is what will be the pace of transition.”
It was instantly clear that these two men were meant to function as in-the-flesh representations of two competing visions of energy – the feel-good Rifkin vision of boundless free renewables, versus the boring analysis of Birol with his embarrassingly reality-based take on how the modern world is powered.
In the media availability afterwards, Rifkin and Birol flanked then-minister for natural resources, Jim Carr, as if to symbolize that it was possible to balance these positions. If it looked like statesmanship, in reality the Winnipeg conference represented a carefully stage-managed shove out of the way for fossil fuels. The conference was intended to be a culture-jamming fusion action that would contrast these apparently competing views to reposition Canada’s energy system.
Accompanying the conference was the release of a citizen consultation process claiming to show that by adopting a path of renewables groupthink, Ottawa was merely reflecting what a cross-section of Canadians wants to see. That they commissioned the renewables advocates at Vancouver’s SFU Centre for Dialogue – yes, the same place that hosts renewables lobbyist Clean Energy Canada – to do this work speaks volumes. It was clear where this was meant to be headed. All of the policy stagecraft we have seen since that time has been focused on plumping up the energy transition mythology by adopting the Rifkin’s wobbly platitudes as our energy compass, while passing seemingly random laws like Bill C-48 and C-69 that ban or restrict activities (oil tankers and pipelines) that don’t fit the rosy energy vision. To make this observation is not to be unkind toward those who rightly desire a better world. Canada can do a lot more good through prosperity than through decline.
Our national energy policy today, inasmuch as we have one at all, is the creation of whoever decided it was a good idea to spend a million bucks to seed a series of country-wide focus groups with wind-energy talking points, and call that a consensus. Man, oh man.
The inexplicable exclusion of the foundational oil & gas sector from the national supercluster program is a case in point. This is exactly what you get when your policy advisors are renewables zealots devoted to extinguishing the use of hydrocarbons, who view any improvements in how fossil fuels are used as a major threat to their goals.
If you actually care about being able to fund an energy transition, not to mention a country’s social programs, maybe throw one of those billions in the direction of R&D for the country’s number one commodity export?
This is not to say that a lot of work done by the federal government to tighten up the hydrocarbon system isn’t welcome and worthwhile. Failing to respond to a wide range of pressures was never an option. On the trade front too, an enormous amount of important work and engagement on trade and the economy has been commissioned and delivered, such as the Economic Strategy Tables. We have the real numbers about energy in the economy, the problem is that none of this amounts to a strategy that addresses the growing energy competitiveness problem.
This has happened because Ottawa took the social license bait in its entirety, without factoring in economic policy. Judges, not regulators or cabinet, are now effectively the ones in charge of major energy projects. Minuscule but politically powerful groups that have nothing to contribute to economic or social well being have a veto over policy. Energy investors have marked down their Canadian assets and turned their attention elsewhere. The predictable result is that Canadians are now suffering because of the continuing deadlock over what the future of Canadian energy should look like.
There is politics in all this, but culture too. I can’t think of Halifax without recalling Atlantic Canada literary icon Hugh McClennan, the originator of that nation-defining phrase two solitudes, which of course to him referred to the French-English divide but functions equally well for the predicament in which we now find ourselves. “We have contrived to solve problems which would ruin other countries merely by ignoring their existence,” wrote MacClennan, evidently with pride. If that was ever true, clearly it no longer applies today. Canada’s transition talk might feel good, but what it amounts to is running away from the truths of energy dependency and trade as they still exist. Whether it is how to deliver finished pipelines, offer alternatives to costly imports of murder oil from Saudi Arabia, or increase electrification of the energy system wherever it is appropriate to do so, a fresh strategy for energy is overdue.
Canada has a climate policy. It nearly had an energy policy in 2015, but instead got the death-by-focus-group climate/energy porridge of 2017. This is what is driving all the decisions today, and clearly it’s not working. A task-specific energy strategy is urgently required, and whoever comes to power in Ottawa next month should make this one of their top priorities.
Stewart Muir is a Victoria-based writer on energy and natural resources.