Divestment hurts people

The International Energy Agency predicts world oil consumption will hit 105 million barrels of oil daily by 2040. to fly airplanes or the diesel that trucks use to transport food, medicine and consumer goods. Anyone who believes the end of fossil fuels is near is not operating in the realm of reason.

It is why the International Energy Agency, which even though it wants more renewable and other alternative energy, is also realistic that oil and natural gas consumption is forecast to triple between now and 2040.

Even California governor Jerry Brown, a champion of green energy, has continued to encourage oil and natural gas development. That is why California remains the thirdlargest oil-producing U.S. state. As 60 Minutes noted in a recent profile of Brown, “he refuses to curb oil production until there’s a viable alternative.” produce even more will be additionally costly. Also, as I detail in my recent report Corporate Welfare Cash (for the Canadian Taxpayers Federation), alternative energy is already much more subsidized in Canada than is oil and gas. (That noted, oil, gas and renewable energy companies alike should all be cut off from taxpayer-funded subsidies; that would help even the playing field among all potential energy suppliers.)

Lastly, the notion that building subsidized wind turbines and solar panels in Canada can replace the jobs, incomes, exports and tax revenues of a long-profitable sector is folly. From Newfoundland to northern British Columbia, there are 300,000 people directly employed in the oil and gas business with 650,000 spin-off jobs. Oil and gas products represent $136-billion in exports to the United States and $22-billion in annual tax revenues to governments.

Which brings us back to advocacy against investment in the energy sector, the socalled divestment movement. In a rebuke to the divestment demands, Quebec credit union Desjardins Group recently ended its moratorium on pipeline project financing. Depending on where Desjardins goes on a more general social and environmental framework, that decision could be positive or merely a prelude to anti-energy investment decisions.

Meanwhile, calls are growing for the Canada Pension Plan to divest of energy investment. If that ever happened, a useful investment criteria — returns — would be sacrificed to junk science.

Plus, Canadian employment and income would be reduced by such a decision. It would harm the middle class and the poor. That’s the problem with anti-consumer and anti-empirical advocacy dreamed up in academia and furthered by reality-blind activism. Ideas have consequences. Bad ideas, especially.

Yet the economy achieved the “major feat” of three per cent growth in the second quarter of 2017, Trump’s first full quarter as president. And then in the third quarter, it hit 3.3 per cent. In December, the New York Fed projected that growth in the 4th quarter could reach four per cent.

That was before the Trump administration passed one of the largest corporate tax cuts in U.S. history. This week JP Morgan CEO Jamie Dimon, bullish on the tax legislation, told Fox Business that “If we have a couple of years of good growth, that could justify the markets where they are. Four per cent economic growth this year is possible.” Various economists are also warming to the prospect of four per cent growth and few now doubt the feasibility of three per cent growth. In less than one year, Trump has shattered the notion that low growth is inevitable in a modern economy.

Oh, one last indication of how the zeitgeist has changed. A speaker last month at a global conference of mayors in Chicago took credit for the economic growth now seen, characterizing it as a continuation of the Obama policies. That speaker, former president Obama, may have been joking when he quipped “Thanks, Obama,” but he was also conceding that the Trump normal — a robust economy — is no joke.