XL delay targets Canadian energy policy
Premier Brad Wall spoke recently at the Manning Networking Conference in Ottawa together with former federal environment minister Jim Prentice.
They noted that Canada must do more to both strengthen and trumpet its environmental credentials if it expects to fight off international climate criticism and achieve its energy and economic goals. Their comments were clearly directed toward the Keystone XL Pipeline project, and were amazingly prescient.
As North America was observing the Good Friday holiday, the Obama administration quietly announced that its decision on Keystone would be delayed by unresolved legal issues in Nebraska. The delay, which many expect will be for at least a year and which some believe is permanent, was despite a State Department ruling in January that found the climate change impacts of XL would be negligible.
It would be rash, as many Keystone proponents have done, to dismiss the Good Friday statement as that of an ideologically driven, left-leaning President who’s pandering to a vocal and misguided environmentalist minority. The reasons run much deeper and merit serious consideration, given the momentous nature of this outcome.
Prime Minister Stephen Harper’s entire policy agenda is unashamedly focused on oil and gas extraction in Alberta. Albertan oil and gas is dominated by Keystone, which is why President Barack Obama’s decision is momentous. Its true significance will become obvious only over time, but that the decision took this direction points to the fact that current Canadian energy policy is flawed.
To understand that policy, one needs to understand Harper. His world view is shaped by petroleum economics. Harper’s father was an accountant for Imperial Oil (part of ExxonMobil), he was educated at the University of Calgary and strongly influenced by Alberta’s contempt for the Liberal government’s 1980 National Energy Program.
These issues are compounded by the fact that, when Harper was sworn in as PM in February 2006, American energy security was worse than it had been for years. U.S. crude oil production, as a percentage of consumption, had been falling steadily, from 83 per cent in 1967 to a minimum of 54 per cent in 2006.
In this environment, Harper likely calculated that Canada finally would be able to sit at the table with the U.S. as an equal. It was this perception that defined his negotiating stance on Keystone which, throughout, can best be characterized as “irritate rather than accommodate.” This was epitomized by his inflammatory comments, in New York of all places, in September 2013 when he said: “We will not take no for an answer.”
It also explains why Canadians increasingly have to suffer the demeaning sight of their prime minister acting less as the PM and more as lobbyist-in-chief for oil and gas.
Hydraulic fracturing in the U.S. marked the beginning of the end for Harper’s policy agenda. It was the stunning technological success of this process, together with massive deployment of energy efficiency and new renewables (initially wind, and increasingly solar) that has reversed and fundamentally strengthened America’s energy position since 2006.
It is the Harper administration’s inability to recognize this shift and change its negotiating stance that resulted in this latest setback for Keystone.
This brings us back to Premier Walls’ perceptive advice to the Manning Conference in February. The defining issue of our time is climate change, and the reality is that Saskatchewan and Alberta produce per capita greenhouse gas emissions that are among the highest in the world. Current actions, notably the Boundary Dam carbon capture and storage project, are doing little, at great cost, to change that.
Wall has no doubt considered Obama’s oft-repeated energy mantra, “All of the above.” So why then do our world-class wind and solar resources provide less than three per cent of Saskatchewan’s electricity? The U.S. precedent conclusively demonstrates that there is no economic or technical reason why they should not supply at least 25 per cent.
Along the way, this approach could retain hundreds of millions of dollars within Saskatchewan, significantly empower rural economies, provide thousands of lowand high-skilled jobs, and reduce GHG emissions by millions of tonnes annually.
The Keystone decision demonstrates that not just Saskatchewan voters but also President Obama are asking why this province is reluctant to use its wind and solar resources. For the sake of our energy and economic goals, someone needs to answer that question.