If you were running a country, and you’re not sure of the best path forward, a good piece of advice might be: What would Putin do?
I get it, he might not seem like the best example. The Ex-KGB despot’s tactics tend to be a bit on the barbaric side, like explaining nature to a kindergarten class by releasing a bunny and a wolf into the classroom simultaneously. But hear me out.
First and foremost, I’m no politician, and lobbing advice is easy, and I know that. But some things are self-evident, or should be, and if you sign up for the job, certain expectations come you way – such as that a country’s leader should understand the country, should understand its strengths, and learn how to use those strengths to national advantage on the world stage.
Putin gets it. He knows what Russia is good at, what it is not, and how to play his hand to maximum advantage. Is it pleasant? For Putin, hardly. Ask the Ukraine, who lost a portion of their country for whatever ancient reason when he annexed Crimea. Or Europe, when he shut off the flow of natural gas in the dead of winter to prove a point.
Of course, we don’t have to act like that, like the foul-tempered villain in a Marvel movie. That doesn’t mean we have to bumble around the world stage, trying to lead the world by being nice, and lecturing them for not being so. Giving away all our wealth to anyone who asks would be nice, but that doesn’t necessarily make it wise policy.
Our country seems proud of the image of niceness, and current leadership seems to be using that as the playbook. Consider the problems it causes when that is the only guide.
Trudeau takes the ‘high road’ on any moral issue, claiming superiority on any front that has strong political/media currency. He has lashed out at China and Saudi Arabia for human rights issues, which, particularly in light of the body count at government-sanctioned residential schools, seems a bit unwise.
Even pragmatically speaking, these tongue lashings are not valuable, because they just tend to enrage the accused, who simply point out Canada’s shortcomings. But Trudeau’s comments do make sense when one considers the source – his idea of leadership is to impress the world with his qualities, not his country’s. He vaulted onto the world’s stage, determined to show what a great guy he was. Thus, he speaks endlessly about how he embraces every noble ideal, every social justice cause, every current trend that will show he is a cutting-edge good guy.
He does this with climate change. This past spring, he came out of left field with a pledge to hasten Canada’s already ambitious climate goals by increasing Canada’s 2030 emissions target to a dizzying 40-45 percent. There was no sense or science or plan. “If major economies in the room were to follow Canada’s lead and adopt a rising price on pollution and commit to phase out coal plants, we would accelerate our global path for a safe, prosperous net-zero future,” Trudeau lectured the world, while skillfully avoiding the hard talk about how all this would be accomplished.
The goal seems outlandish considering that, per his own government’s website, in 2019 67 percent of Canada’s electricity was from renewables, and 82 percent was from non-GHG emitting sources. To get where he wants to go is going to decimate the country, but no matter – a stage is a stage!
It’s easy to stand there and glibly dole out advice about how the world should act. It’s easy to tell the world you stand for everything that is good and nothing that is bad and to adjust these values according to which way the wind is blowing in the media. But it’s not leadership.
Here is what a wise national leader should be doing. He/she/they would be thinking at least a bit like Putin – how does this [fill in the blank] work best for the country?
A wise leader would catalogue what the nation is best at, and compare that to what the world needs. What the world needs from Canada is natural resources, to a large extent, because we have such a massive resource base, few people to use them, and (for now) the skillset to access them in a well-regulated manner. Even if one’s framework is singularly focused on GHG emissions, which ours seems to be, there is still a reasonable expectation that at least some wisdom should be evident.
Consider minerals. The IEA put out a report this past spring that included bombastic predictions about the staggering quantities of minerals that will be required to meet the very climate ambitions Trudeau has signed us up for. Consider lithium. The IEA report projects that global lithium demand will increase 40 times by 2040. Graphite demand will increase nearly as much.
Many in the oil patch have heard the word lithium more in the past five years than in the 50 prior. Sharp business minds spotted the potential of extracting the metal from produced well water, and new companies are currently exploring the potential of actually drilling wells to tap underground lithium concentrations.
It’s not like industry is ignoring the potential, but where is the support offered to, say, wind or solar?
Or consider graphite, a critical component of batteries and absolutely essential to the transition the world’s governments are pledging. From the website of a Canadian graphite developer, “While there are approximately 20 public graphite companies with advanced stage, feasibility level projects it is relatively easy to pare the list down. Fourteen are in Africa with varying degrees of security/stability risk… The number of high quality, advanced stage graphite companies located close to infrastructure in politically stable countries can be counted on the fingers of one hand with some leftover.”
OK, it is a penny stock, but it has been around for a decade, and is devoted to production of this critical material with a high-grade deposit. And our governments are rolling out nearly pointless (from a global perspective) emissions reduction schemes by the dozen.
A wise government should have been years ahead of this curve. Canada is one big ball of metal, mineral, and hydrocarbon potential. Yet it took until February of this year for the federal government, in conjunction with one of the provinces, to announce plans for a “Canadian critical minerals inventory.”
That is indeed a great idea – but why is it happening now, many years after the launch of what seems to be hundreds of climate change initiatives, cc media blitzes, studies, EV subsidy programs, etc.? The architects of these climate change programs had to have known the potential for these minerals – why isn’t Canada at the forefront of these markets? Why didn’t the government shovel a fraction of the billions at these industries that they did to subsidize emissions reductions schemes that are pointless from a global emissions perspective?
Like Russia, China is no grinning idiot. Consider what they’ve done with regards to lithium: A recent National Bank Financial report points out that, while China produces only about 9 percent of the world’s lithium, it has acquired significant equity positions in the world’s largest lithium projects. For example, Australia and Chile are two of the largest lithium producers; China has a stake in >60 percent of their lithium output.
Canada is chasing battery manufacturing facilities, because that is part of the glory game. But according to research firm Benchmark Minerals Intelligence, raw materials account for the largest share of the cost of a battery, as much as 80 per cent. And even more stunning, according to the same source, “While Canada is rich in copper, nickel, cobalt, lithium and other raw materials needed for electric vehicle batteries…there are still unresolved questions about whether these can be produced in a cost-competitive way that will attract EV makers.”
What the hell? We are pumping tens of billions into schemes to reduce emissions; pretty much any scheme that shows any promise at all is eligible for between one and fifty different funding programs…and we don’t even have an understanding of how we fit into that supply chain, when Canada is such a natural resource powerhouse?
The reason is that there is no critical thinking evident in our leadership, anywhere. Alberta just threw $1.5 billion into the obviously doomed Keystone XL a few months before it was cancelled. I can think of a few places where that might have been better spent; how about taking 10 percent of that and getting a new lithium industry underway, based on the copious amounts of the stuff well-documented by the AER in known reservoirs?
If there was a proper vision for Canada in this upcoming world, a vision that utilizes our strengths, it might look something like this: build pipelines to markets that earn the highest return. Build them on a national infrastructure corridor that cuts decades from approval times. Funnel tax dollars from these extractive industries, which should be thriving now in this price environment, into development of industries that are critical to the world’s ambitions, and industries in which Canada has a formidable advantage over most nations.
For example, we should be developing the country’s lithium/graphite/whatever’s resources like our national life depends on it (which it does). Use those metallic contributions as part of our contribution to global emissions schemes, and demand that we get credit for them emissions-wise, because developing low cost sources of these materials will do more towards lowering global emissions than will trying to convince prairie farmers/northern miners/industrial businesses of all stripes that they will need to be using EVs by 2035 (the rebellion against this madness will be in full swing by 2030 or so).
We are trying to out-shout other countries with ever-wilder emissions reduction pledges, with nearly zero thought going into how the big machine is supposed to keep turning over the long haul.
I’m aware also that asking for wisdom from this current batch of political leaders is a cruelly unfulfilling pastime. But some of you out there have their ear. Some of you have think tanks and organizations and channels and contacts that can penetrate those grinning, glad-handing, poll-driven skulls. If you can, please do so, before it is too late.
Oh, we will transition away from hydrocarbons…just not as soon as anyone thinks. Without them, there is no system at all. Find out why – pick up “The End of Fossil Fuel Insanity” at Amazon.ca, Indigo.ca, or Amazon.com. Thanks for the support.
Read more insightful analysis from Terry Etam here, or email Terry here.