Why a Canadian energy strategy makes sense
West’s leadership brings sense of urgency, risks
One of the surprising things about the growing discussion of a Canadian energy strategy is that so much of the leadership is coming from Western Canada. It comes from provincial governments, and particularly Alberta’s new Premier Alison Redford, from regional think- tanks such as my own, from industry organizations embedded in the West, and from individual leaders within the oil- and- gas sector. This regional leadership of a critically important national policy debate brings very real advantages but also some very real risks.
But how did this leadership emerge in a region where the ghost of the 1980 National Energy Program still stalks the land and regularly springs to life in pub conversations and boardrooms?
Part of the answer is that 32 years have elapsed since the NEP and the world has changed. Jimmy Carter is no longer president of the United States, Pierre Trudeau is no longer prime minister, the Cold War is over and the Internet has arrived. It’s time to move on without dragging the policy ghosts of the past along with us.
Moreover, just because we screwed up so spectacularly in the design of the NEP — sorry for the language, but screwed up is the best I can do — does not mean that we will do so again. This time we can get it right if all regions and governments are at the table, and if we begin with the affirmation of provincial ownership of natural resources.
Beyond this realization that the world has changed in fundamental ways is the recognition that energy developments cannot be bottled up within provincial jurisdictions. Firms operate nationally and internationally, and within this broader context the government of Canada is an inevitable player, and a potential asset.
The decision of the Obama administration not to approve the Keystone XL pipeline also drives home the precarious nature of North American markets, and thus the need to develop alternative markets in Asia. This will not be easy as the Keystone decision will only strengthen attacks by the environmental community on Canadian resource industries. Without an encompassing national energy strategy, the development of alternative markets could be next to impossible.
Certainly the Alberta government realizes that its energy ambitions must be embedded within national ambitions, that major infrastructure challenges such as pipelines to U. S. and Asian markets, and the international marketing of the oil sands, are beyond the reach of individual firms or provinces. Alberta cannot take on the world, and thus has to convince Canadians at large that they have a stake in the Alberta economy and energy resources.
All of this reflects a growing self- confidence among Western Canadians, a belief that they can be the architects of tomorrow’s national policies just as they were the victims of national policies in the past. The mantra today is more likely to be “bring it on” than “go away.”
Strategy that does not work for the West will not work for Canada
Finally, Western Canadian leadership brings a sense of urgency to the energy- policy file, a sense that may not be felt elsewhere in the country.
It is important to recognize, however, that Western Canadian leadership is not without significant risks. One is that it tends to direct our policy attention toward hydrocarbons rather than to the vast array of energy resources that Canada has. It also directs our policy attention toward upstream production and away from downstream consumption. If we are serious about the role that energy production and consumption play in GHG emissions, we must design our energy systems with reduced consumption in mind. This means bringing into play the bulk of Canadian consumers living outside the West, and particularly those living in large urban environments both inside and outside the West.
The greater risk is that Western Canadian leadership will convince other Canadians, and perhaps even Western Canadians themselves, that energy policy is more of a regional interest than a truly national interest. It is not. An energy strategy that does not work for the West will not work for Canada, but neither will a strategy that works only for the West work for Canada.
The Canadian energy system — its reliability, sustainability, efficiency and contribution to the national economy through both industrial inputs and trade — is of critical importance to Canada’s long- term economic prosperity. Admittedly, a national energy strategy may have its most immediate impact on the West, but we would be deluded not to anticipate national benefits and costs. Canada is blessed with an abundance of energy resources across the land, and a national energy strategy fixated on Western Canadian hydrocarbons will not take us where we need to go.
Western Canadian leadership must therefore be seen as leadership, and no more than leadership, for what must be a truly Canadian policy conversation. True, many Western Canadians are eager to hold the pen, or the keyboard, for the first draft of a Canadian energy strategy, but the final document must be written for a larger, national audience. If not, it will fail as a policy and we will fail as a country.