Hello fellow Canadians,
Greetings from Western Canada. Allow me to introduce myself. I’m a peculiar energy writer from out west, affiliated with no one, and I have some energy points I’d like you to consider.
First, Exhibit 1 of said peculiarity, a thought exercise.
Have you ever contemplated, while sitting on a plane taxiing for takeoff, how the tube full of people you’re sitting in has to hold up those long heavy wings full of fuel, but the second you are airborne those wings hold you and everything inside the tube aloft?
Do we always know who’s carrying us and who we’re carrying, and when?
Changing track for a second, here are a few observations of the mighty Quebec City-WIndsor Corridor. It’s amazing for anyone who’s never been. An unbelievable number of cars whip down those monstrous freeways, weaving in and out of the relentless stream of big trucks. The horizon is an endless ocean of warehouses and loading bays and industrial parks. I don’t mean that in a bad way; the whole scene is a dizzying economic powerhouse.
Heading towards Toronto, the freeways get bigger and crazier. What the hell is a collector lane? And there’s the legendary 401, apparently the busiest freeway in North America; in some places, 16 lanes wide.
Here in Calgary we think/know Deerfoot Trail is nuts, but is a mere walking path next to the 401. Even Vancouver pales in comparison. Nothing across Canada comes close; Vancouver, Edmonton, Calgary, Winnipeg and Halifax combined would equate to the industrial/commercial bombast that is southern Ontario and Quebec.
The Quebec City-Windsor Corridor contains about 18 million people – half of Canada’s population.
I get it. We get it.
You hold voting control of the country; you hold the cards. Collectively, that massive localized swarm of human activity and enterprise will dictate Canada’s path when at the voting booth.
That control extends to energy. Yes, the western provinces will fight hard indeed to exercise their constitutional right to resource development, and resource development will remain an incredibly powerful economic engine, not just for royalties and taxes and spin off activity but for cheap, reliable energy supplies.
But the people you vote into office speak for Canada internationally, and will set a tone that will attract or repel capital. As a simple example, I spoke with someone related to a US entity that was raising cash for energy investments. The financial backers had one stipulation: none of it could be invested in Canada. And now federal leaders are setting an even more alarming tone.
I’m sorry to say it, but even more responsibility rests on your shoulders: The world is in a global energy crisis, primarily a shortage of natural gas (If you don’t want to take my word for it, how about this guy: “The world is having an energy crisis,” Japanese Prime Minister Fumio Kishida said. “We also want to have a closer relationship with Canada in the area of energy.”).
For the past several years – predating Putin’s war – natural gas has been in critically short supply, to the detriment of both wealthy countries (Japan and Germany have come to Canada seeking LNG) and poor developing ones (Bangladesh’s critical textile industry, responsible for 90 percent of exports, is operating at one-third capacity solely because poorer nations are outbid for LNG by richer ones).
The people that Canadians have voted into office refuse to come to their aid, on the grounds that decarbonization is a priority. When Germany, Japan, Bangladesh, Pakistan, and any other gas importer lines up to say those priorities are incorrect and inhumane, we should listen.
Most Canadians (or any country’s population) do not understand energy – how it works, how it is financed, where it comes from, the benefits it brings to Canada, the magnitude of our reliance, the challenges of an energy transition, etc. I know you don’t know because I don’t fully understand it either, and I’ve been directly in the business for 3 decades. It may be a leap of faith but please trust that many who have spent their careers in energy have a better view than those who get their understanding from the media or politicians. It is easy to fall for the stereotypes put forward by powerful/loud anti-hydrocarbon commentators that the sector is some sort of villain that is fighting an energy transition and needs to be legislatively brought to heel.
If anyone found substance in our federal government’s refusal to talk LNG supply for Germany and offer green hydrogen as a substitute, they are disturbingly deficient in energy literacy. That proposal made no sense on any level – green hydrogen would be at minimum a decade away, and Germany has the same raw ingredients Trudeau’s government touted – lots of wind, water, and a motivated workforce. Considering that German built an LNG terminal in 5 months, their motivation clearly dwarfs ours.
If anyone sees sense in the about-to-be-unveiled “just transition” federal plan to retrain oil patch workers to renewables, again, energy knowledge is comprehensively absent. That is not a plan to provide workers for a new industry; it is a plan to decimate an existing one. It is an attempt to dissuade hydrocarbon knowledge from producing hydrocarbons, in some loony scheme to have them, what, install solar panels? Do they understand at all where energy bottlenecks are, and how to resolve them?
By the way, droves of oil patch workers are engaged in energy transition work already, if not flat out renewables. An Alberta solar directory lists 120 members. By 2025, Alberta will lead all other provinces in renewable (wind/solar) power capacity generation.
Saskatchewan hosts the world’s largest CO2 storage field at Weyburn that has been operational for 21 years, and Alberta is home to the world’s largest dedicated carbon capture and storage project (Alberta Carbon Trunk Line). Alberta currently has a total of 25 carbon storage hubs approved and/or under development. The Pathways Alliance is developing a plan to sequester CO2 emissions from the forever-tarred oil sands.
Alberta was the first province to have a carbon-based pricing mechanism in…2007 (thanks William Lacey).
You may say yeah, so what, Alberta produces a lot of emissions too. True: that’s what happens when any jurisdiction produces far more than it consumes. Alberta and Saskatchewan together produce almost 5 percent of global oil supply, and the three western-most provinces produce about 4 percent of global natural gas supply. Those provinces also produce massive exports of lumber, agricultural products, upgraded petrochemical products, and manufactured goods, far beyond levels of consumption.
That is why emissions levels are high. Consumers have no right to hurl stones at producer emissions when they consume the very product in question, unless they could do better themselves.
Yet the people currently in power are not satisfied. They are actively undermining and chasing away investors (and employees), such as when Canada’s spokesperson tells Germany there is no business case to provide them Canadian LNG (Germany subsequently signed an LNG deal with Mexico, a country that consumes more gas than it produces, a particularly ironic LNG supplier).
Federal officials are looking to pass legislation to get workers out of the hydrocarbon sector, and federal agencies pressure young people to exit any petroleum related education or enterprise.
Anyone implementing energy policies for industries that they do not like and do not speak to will create disastrous consequences, particularly something as critical as energy.
Trust me, i’m not doing this for fun – a deluge of crankiness will no doubt come my way for stating (from the heart of the oil patch) that someone else controls our fate – but it’s true. It is concentric circles of power. Wawa is neglected compared to Thunder Bay which is neglected compared to Hamilton which is neglected compared to Toronto. It’s played out everywhere.
Those on the outer fringes of the circle of power tend to produce more than they consume – farmers, energy workers, miners, fisherpeople, lumber workers – and, because these activities happen in sparsely/lesser populated areas, their views/votes are not normally relevant to the big storylines come election time. But those views and votes are ignored at our peril.
What does modern society need? Or, phrased differently, what does modern societies need that you don’t think about every day?
Where does it come from? Who gets up every day to provide it?
What do you think of someone that turns a wrench for a living? How much do you need that person?
Put another way, if all welders went on strike you – all of us – would be so screwed so fast we would be stunned totally and completely.
Do we always know who’s carrying us and who we’re carrying, and when?
And while the concept of who-carries-who is in mind, consider another angle where you could be the hero/heroine/hero(x). The world is in an undisputed fuel shortage, where the poorest will pay most dearly. You, voters that are not involved at all in the LNG chain, have within your hands the power to do something about it.
Canada could be charging to the rescue of desperately poor nations by ramping up LNG exports with the same enthusiasm that saw Germany construct an LNG terminal in 5 months (normally a multi-year process). We COULD be doing that here. We could be exporting massive amounts of clean burning fuel to prevent poor nations from reverting back to coal.
Instead, we offer our trading partners lectures and platitudes. We tell them to forget about LNG, green hydrogen and batteries are the future, come see Canada when you need those things. Whether Canada builds batteries in the next ten years is inconsequential globally, and green hydrogen promises are presently as real as Sasquatches. Real solutions to global energy shortages however, are right at our fingertips.
To be clear, vote for whoever you want. Depending on the party of your choice, anywhere between maybe 5 and 95 percent will wish to see the petroleum sector cease to exist. And many of you have very firm beliefs in that arena. So be it. Some hate-filled marketing campaigns have been very effective.
For the rest of you, the free thinkers, please know that the second and third order consequences of a global natural gas shortage are far beyond what you (or I) can imagine. What does it mean to Germany if there is a “wave of shutdowns amidst mid-sized companies” and behemoths like BASF announce that they will be “permanently downsizing operations in Europe” due to high energy prices/lack of LNG? What does it mean to poor countries like Bangladesh, where it’s main industry is operating at one-third of productive capacity? That’s the scary part – what sort of social safety net do Bangladeshis have, and many countries like theirs?
A global natural gas shortage will mean immense human misery, and the burning of much more coal. The human and environmental toll is hard to imagine.
Understand clearly: that will be Canada’s legacy out of this current energy policy mindset.
To some extent, those scenarios are up to you.
On the other hand though, think of how cool that is: those potentially nation-saving energy developments are in your hands. Vote for whomever you like, but now you know, and please let them know you know.