The narrative when I worked at Syncrude during its construction phase in the 1970s was that the world was running out of oil, and direct government investment to save the oil sands was critical. It was also just after OPEC was created and Americans had lost control of cheap Middle East oil.
My mother pooh-poohed the idea that the world was going to run out of oil. Seems she had learned the lesson that I would soon learn—don’t trust everything a party seeking cash tells you. And, alas, she was right. The world wasn’t short of oil, we just needed new ways of getting at it. Fracking, three decades later, opened up yet another oil bonanza.
Our provincial government continues with this singular narrative. The world will always need oil and we’re the ethical guys. We bemoan the loss of Energy East, Gateway and Keystone pipelines and believe the resurrection of these shelved pipelines will make us rich again. We can’t see beyond drilling, mining and fracking every last drop of oil out of Alberta.
It’s an easy narrative for Mr. Kenney and Conservative MPs, but it’s an unfair narrative for Albertans. It is true, 40 years of environmentalist’s actions and scientific evidence incubated the new narrative.
Certainly, both the Ottawa Liberals and the Alberta ND’s accepted this new narrative more readily and passed important, but unpopular legislation. But today, it is the powerful institutional investors and financial institutions that are turbocharging the green revolution.
One of Premier Kenney’s first actions when elected was to send a delegation to London, England to scare up investment dollars for our oil patch. They came back empty-handed and over the past decade, European, American and Asian energy companies have been divesting from the oil sands in droves.
There is also a world-wide trend for Big Oil majors to write down the value of their oil and gas reserves. They have accepted the carbon budget agreed to under the Paris Accord and have begun to acknowledge most of their reserves will remain untapped.
The financial pages, on a regular basis, report companies turning reserve assets into liabilities including BP and Royal Dutch Shell who each wrote down their reserves by $17.5 billion and $22 billion, respectively.
In Canada, our largest oil sands producers announced an unprecedented alliance to achieve net zero greenhouse gases by 2050. In layman’s terms, Albertans have been told that these operations have 30 years left to make substantive changes or fold.
Institutional investors and financial institutions have accepted carbon emissions as a significant risk when determining a corporation’s financial worthiness. Corporations that need equity and credit to operate and grow have no choice but to step up and mitigate carbon emission risks.
Unfortunately, Alberta isn’t an island and our continued denial and inaction around climate change policies will have perilous consequences. If Mr. Kenney and his insiders don’t own up soon to the turbo-charged transitional shift in energy production, we will become the next have-not province.
Don’t be fooled by the sharp increase and demand for oil and gas that will occur with pandemic re-openings; it is temporary. It will be our last hydrocarbon hurrah as we speed towards the 30-year window to save the planet from unsustainable warming.
The degree of energy transitional risks facing Alberta demands powerful and immediate action. But that would require Premier Kenney, the Conservative Party of Canada and the Canadian Association of Petroleum Producers to shape the future, not just react to it.