Rethinking Alberta's energy sector
Oilsands and emissions are key issues in report from a think-tank funded by BlackBerry billionaire Jim Balsillie
By Deborah Yedlin, Canwest News Service June 16, 2010
There are a number of interesting, if not controversial, assumptions made in a study released last week by the Canadian International Council, the think-tank funded by Research In Motion billionaire Jim Balsillie.
The report, issued on the eve of the Canadian G8 and G20 summits, covers a number of important aspects of Canada's economy and makes suggestions as to what needs to change for this country to position itself for success in the global context.
No surprise, the 100-page study titled Open Canada: A Global Positioning Strategy for a Networked Age -- written by a panel chaired by former Globe and Mail editor Edward Greenspon -- hits on nine key themes such as the need to foster stronger nationalist sentiment, the lack of investment in innovation, the economic dependence on the United States, the need to rebuild diplomatic influence in the world, leveraging economic relationships and, of course, there's a section on energy.
"Today, Canada's energy resources earn enormous export revenues, fuel the broader economy and position this country beautifully in an age of intense global competition for resources."
Nicely put, by any measure.
But a scan of panel members reveals nary a representative from the energy sector -- though three were involved in the panel's consultative process. Even more curious is that a representative from the World Wildlife Fund Canada is one of the study's authors.
Equally unfortunate is that the term "fair share" is included in the discussion regarding Alberta's energy resources, though it is in the context of the pace of resource exploitation for future generations and not royalties.
From a positive standpoint, however, the study takes the position that it's in Alberta's and Canada's best interests to maximize the value of its energy resources. To do so, something very big and important needs to take place -- the development of a National Clean Energy Strategy.
Easier said than done, acknowledges Greenspon, because of the ghost of the National Energy Program and the persistent "allergy" Albertans have developed to anything that would see energy and national uttered in the same breath.
And there's no question when Albertans look at what is proposed, they'll spit it out. The key components proposed include a carbon tax that feeds a Clean Energy Fund; Albertans will say there already is a $15 per tonne tax and a clean technology fund has already been established. The purpose of the fund under the National Clean Energy Strategy would be to work at decreasing oilsands emissions, with the goal of shaking off the "dirty oil" moniker.
But as many are only too aware, emissions aren't the only flashpoint in the oilsands.
Then there is the fact Alberta is referred to as being the biggest per capita carbon emitter in the country -- when that dubious honour belongs to Saskatchewan -- without an explanation as to why this is the case, it's bound to get the fur up on the backs of Albertans reading the study.
Alberta's emissions issue has to do with the province's addiction to coal-fired electricity.
Intended or not, the omission of facts including Alberta's dependence on coal for electricity, presents an incomplete picture and implies the villain is the oilsands.
"The emissions reductions opportunities are largest in the electricity-generation sector, through fuel switching -- from coal to natural gas," said Janet Annesley, vice-president of communications at the Canadian Association of Petroleum Producers.
The strategy contemplated in the report also includes a commitment to diversifying the market for Alberta's oilsands production to enhance Canada's negotiating position and decrease its vulnerability to political whim.
While the notion of diversification makes eminent sense, the suggestion to moderate development "to keep it roughly in line with the pace of technological advances and emissions reductions" is bound to raise blood pressures in some parts.
This statement suggests a lack of understanding about how oilsands projects are approved, how markets work, the progress that has been made to date in terms of decreasing emissions intensity and the continuing research efforts throughout the sector all aimed at decreasing the environmental footprint. It's not perfect, but it is on the radar screen in a big way.
Moreover, it ignores the reality that oil production from deepwater reserves could be compromised as a result of what is taking place in the Gulf of Mexico -- which could have an impact on oilsands production; more, not less, might be needed to avoid anything resembling an oil price shock.
While some might see the energy piece of the study as incomplete -- and it is, because there is no discussion surrounding the role of coal or natural gas -- the notion of a national energy strategy that also addresses the challenges facing the oilsands from both the production and perception perspectives isn't necessarily a bad thing.
"The oilsands are vulnerable to political attack because of how they are being exploited," says Greenspon. "It's time for a mature discussion to happen because we don't want to repeat the mistakes of Kyoto ... the oilsands are a great resource for Alberta and Canada.... What's going on in the Gulf of Mexico doesn't change the basic fact that we need cleaner oilsands."
Done right, development of the oilsands can generate benefits for future generations, for the province and country.
It's a perspective CAPP's Annesley calls refreshing.
It can easily be argued that the position taken in the study about the way Alberta's oilsands are being developed -- and should be developed -- suffers from an almost eastern Canadian bias. But on a broader level, beyond energy, the study is an important one because its purpose is to get leadership across the country -- whether political, business, non-governmental or labour -- to understand that the old metrics for prosperity have changed because the world is changing; that Canada risks being left behind if it doesn't recognize how it needs to change.
© Copyright (c) The Vancouver Sun
http://www.vancouversun.com/opinion/Rethinking+Alberta+energy+sector/315...
