Fuelling Disaster: Beyond Alberta’s Culture of Resource Dependence
by Gordon Laird, Parkland Institute Editorialist Alberta
Alberta’s prosperity myth had formed the core of Ralph Klein’s long tenure as premier. For example, “Everybody’s working, everybody’s happy” is the party line I heard on several occasions during the November 2004 provincial election. I’ve come to wonder about this perspective, not only because it omits hard facts about, say, growing rates of homelessness and high incidence of family violence, but because it contains a fundamental insight about Alberta. There is a vocal minority of Albertans, mostly associated with the current government, who simply confuse wealth with a flourishing province, extraction with development.
At present, anyone who questions such assumptions is typically bullied or treated with derision. Such hostility and defensiveness, of course, cannot entirely deflect attention away from the mounting public policy deficit that has increasingly left Alberta without a recognizable plan for the future. Former Premier Klein’s apparent dislike of the homeless and handicapped – mirrored in the low priority that one of North America’s richest jurisdictions gives to affordable housing and income security – is, in this sense, simply one sign of an overall vacuum of leadership and long-term vision on broader questions of social and economic welfare in the province.
If Alberta Conservative government does, in fact, have a socially rejuvenating coherent plan for the future, it has not yet been unveiled. Yet there are growing clouds on our horizon, the looming consequences of low resource rents, growing reliance on unconventional sources of oil and gas, water scarcity, and the static performance of the Heritage Trust Fund, among other things. Instead of grappling directly with these problems, former Alberta Premier Klein’s vision for the future had leaned heavily on frontier gambits that are neither diverse nor sustainable.
As it stands, over the next few decades Alberta will shift from dependence on conventional oil and gas royalties to mega-projects in the oil sands, gambling, and speculative ventures such as coalbed methane. The wilful disbelief in resource scarcity, the strong desire to drill, dig and extract as though it was still 1972, suggests that Alberta’s leadership is in the thrall of some sort of cargo cult, one that seems to presume that whatever difficulties that conspire to undermine our future will ultimately be abrogated by the windfall of wealth that comes from allowing people to take our resources from us.
In other words, Alberta has given away too much for too long, all in the name of prosperity. According to a 2004 Pembina Institute study, Alberta collected a meagre 69% of available oil and gas revenue between 1995 and 2002. In contrast, Norway collected 88%, Alaska 99%, and British Columbia 93% during the same period.
Questions of economic diversity and Alberta’s economic future have dogged the province since the 1970s. Ours is a province caught in perennial adolescence, with all of the ongoing issues of delayed democracy, under-investment in public welfare, environmental absenteeism, and cheap resource rents that are familiar to resource-rich jurisdictions in the developing world.
This is a problem, not simply because our immense resource wealth clearly hasn’t benefited all Albertans, but because it is, simply put, non-renewable. Everyone knows that conventional oil and gas is disappearing; yet this doesn’t seem to rile our current leadership. And we are enabling this dysfunction with a new wave of mega-projects that, unlike many of the mega-projects of the 20th century, offer questionable public benefit.
For example, much of the natural gas from the Mackenzie pipeline could be consumed by the burgeoning energy needs of oil sands producers, half of whose synthetic crude is already bound for American export. In other words, clean-burning natural gas, which has only recently become one of our most strategic energy sources, is being turned into fuel for a continent whose auto fleet is as inefficient as it was in the 1970s, thanks to a lack of political will to enforce consistent efficiency requirements on SUVs and minivans.
Alberta’s energy policy hardly reflects the reality that natural gas has become the lynchpin commodity of the 21st century. Gas prices are increasingly tied to electricity and crude, subject to sudden short supply with no major new supply until later this decade. Governments don’t seem to understand the need to better manage declining non-renewables at a time of increased demands on continental energy trade. Contingent commodities, contingent markets, and high prices translate into not only economic consequences (such as high energy prices and potential recession), but the possibility of complete destabilization. This approach to economic development compounds our dependence on fossil fuels, offers greater price volatility and, perhaps most importantly, does nothing to ensure a future that isn’t fraught with energy scarcity and the environmental consequences of climate decline and endemic pollution.
The question of alternatives and diversity is now paramount. Alberta’s dependence on non-renewable resources forestalls many alternatives, and keeps our political culture in a state of immaturity, underdeveloped and sometimes intolerant of differences. We could be world leaders in wind power, energy efficiency, community economic development, and sustainable agriculture – but all of these require public leadership. Instead, we still seem to be stubbornly banking on non-renewable resources and the gold rush that has sustained us thus far.
One long-term solution is to better insulate ourselves from the high prices Albertans will inevitably pay for their own energy resources. Within a future of chronic short supply and ongoing demands for energy exports, energy efficiency is a neglected but necessary policy to ensure energy security for both Albertans and Canadians. And there is an economic multiplier benefit to energy efficiency. A 2003 American study found that by 2008, energy efficiency measures could reduce natural gas consumption by 4.1 per cent. With a slight rise in renewable generation, these changes would reduce wholesale gas prices by approximately 22 per cent.
Another long-term alternative is to produce infrastructure required to diversify and add value to our economy. Wind power is one prime example, since much of the technology and expertise has been imported from Europe. “By 2010, the Canadian Wind Energy Association (CanWEA) hopes to increase Canada’s total wind power capacity to 10,000 MW or about five per cent of the country’s total electricity production,” noted Alberta’s Climate Change Central in 2004. According to its calculations, this is “the equivalent of about 30 million-megawatt hours of electricity per year -- sufficient to meet the electricity needs of nearly four million homes.” According to CanWea, Climate Change Central reports, this would “create 80,000 to 160,000 permanent jobs and generate $10-$20 billion in economic activity, predominantly in rural Canada. At the same time, this level of production would reduce greenhouse gas emissions by 15 to 25 million tonnes per year.”
Alberta would also be well served by fortifying local production and consumption of energy, an alternative to continental pipelines and power lines that have long served large corporations and utilities. In particular, renewables tend to localize energy production and consumption: hydrocarbons are well suited to long-distance transport; renewables are often better suited to regional and local networks. The next energy revolution is not hydrogen – a fuel medium that’s only as sustainable as its energy source – but distributed networks: local production, local consumption, and people making choices about their energy and having substantive input. Our current trade regime not only exacerbates hydrocarbon dependency on a global basis, it works to forestall the development of alternatives. Trade reform is needed at the international level to moderate the balance of energy trade, alongside domestic policy reforms designed to ensure a more diverse, secure, and sustainable livelihood for Alberta and Canada at large.
Alberta’s culture of resource dependence is the embodiment of larger, more continental trends. North America’s excess – and its inability to comprehend the limits of the energy status quo – is essentially the dilemma of Alberta’s future. The debate over energy supply is far from over; indeed, I contend that we will see chronic and debilitating high prices instead of any catastrophic disappearance of oil and gas. All the same, the degree to which we’ve built our economy upon non-renewable resources, and the degree to which we literally fuel continent-wide dependence on non-renewables, is Alberta’s great political question of the 21st century.
About the writer:
Gordon Laird is an award-winning writer and photo-journalist based in Calgary. His books include Power: Journeys Across and Energy Nation and Slumming at the Rodeo: the Cultural Roots of Canada’s Right Wing Revolution. This article has been adapted from a forthcoming chapter in the second edition of The Trojan Horse: Alberta and the Future of Canada (ed. Trevor Harrison), issued by Black Rose Books.
http://www.agoracosmopolitan.com/home/Frontpage/2007/12/18/02016.html
