The future lies beyond oil and gas dependence

Political leaders prefer to squabble than face reality

Change is coming to Canada, and Western Canada in particular. The challenge now is to rise to the occasion and move ahead and not dwell on the past.

Western Canada is in crisis because the hydrocarbon economy that has been a golden goose for Alberta, northeast British Columbia and parts of Saskatchewan is landlocked and a sunset resource.

In the past, Canada had one customer for its oil and gas — the United States. Now the U.S. has become self-sufficient in oil through new technologies such as fracking and new fields such as the Williston basin in North Dakota.

Because we are a captive market and the Americans don’t need our oil, we are at the mercy of American pricing. The Canadian oil industry is witnessing a steep drop in the price of crude oil. While the American price for a barrel of benchmark west Texas crude is around $50 a barrel, the Canadian equivalent is around $20. A barrel of oilsands crude is around $14. Heavy crude at Lloydminster is worth about $10 per barrel. Both heavy oil and oilsands crude are now worth less than the cost of production.

The demand for a pipeline to the Pacific is a simplistic solution when the oil industry worldwide is changing. Demand for oil is shrinking and will shrink even more in the future.

The growth of solar energy and electric vehicles is reducing the need for oil as a source of energy. China is producing fleets of electric buses that will be used domestically and available for export. Transport trucks can be retrofitted to run on LNG. This use of alternate energy will result in an oil glut, and oil that is expensive to produce, such as Canada’s oilsands and heavy oil, will be the first to feel the pinch.

Meanwhile, the cost of production of a barrel of crude in Saudi Arabia is about $9, and they have access to a world market.

Which raises the question: Will Canada even be able to ship enough oil to pay for the pipeline to the west coast?

When the provincial premiers and opposition parties lash out at the federal government it is just so much short-term politics. Alberta is facing an election this year and British Columbia is in a precarious minority government that prevents any serious self-reflection.

Rather than examining the role of oil in the future and facing reality, they prefer to place the blame elsewhere and demonize another government.

Which brings me to the events at the Wet’suwet’en territory in British Columbia. While the provincial and federal governments are looking at the short-term economic crisis, the Wet’suwet’en people at the Unist’ot’en camp are fighting for their land rights and the rights of their children to come.

They are playing a long game while Canada and the provinces are only looking a few months ahead.

I have been to the Unist’ot’en camp and they are in beautiful country. Unfortunately, it is not pristine. Part of the area has been logged off and replanted with pine trees. A few years ago, pine beetles came through and decimated the forest.

This beautiful territory is feeling the effects of global warming since the warm winters are unable to kill off the beetles and they continue their relentless swath of destruction.

The Coastal Gaslink pipeline is one more addition to the looming disaster of global warming.

The other issue is both legal and obvious. The Wet’suwet’en are among the First Nations of British Columbia that never signed treaty with the Crown and never gave up their title to the land. The Delgamuukw case in the Supreme Court recognized this fact and the Wet’suwet’en have been able to assert sovereignty over their traditional lands.

Also, the United Nations Declaration on the Rights of Indigenous Peoples states that Indigenous people cannot be forcefully removed from their traditional land.

We are entering a time of change and as Canadians will have to reduce our focus on the oil economy; we are in danger of becoming an economic backwater. We must move into the new economy of alternate energy sources and the protection of our beautiful land.