Straight talk on energy

Date: December 17, 2019

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I am a committed, first-generation Canadian. I care deeply for this country, which gave my parents a new start after Canada liberated the Netherlands in the Second World War. And, I should say, I accept the science of climate change. I believe we need solution-focused change on both the production and consumption of fossil fuels.

But I am deeply concerned about the future of the country, amid the alarming polarization in the discourse on energy development.

This debate is clear evidence that this country’s energy policy needs a rethink. Contrary to what many believe, oil demand has not peaked. In fact, within the context of a global shift to a low-carbon future, it will continue to grow over the next 10 to 20 years, according to the International Energy Agency, largely driven by increasing standards of living in developing countries.

Canada – as the fourth-largest oil exporter in the world – is positioned to play an important role in supplying the developing world. That’s certainly to our benefit. Within Canada, our oil-and-gas-extraction and pipeline industry is the second-largest subsector of the economy (based on GDP), employing 500,000 people across the country. It is also Canada’s largest employer of Indigenous peoples.

But it’s not enough to simply talk about the size and economic importance of the energy sector. It is also important to understand that Canada’s environmental, social and governance standards are world-class.

The commitment to upholding the highest standards for energy development includes our pipeline system, which is the safest in the world. When measured relative to production, pipeline incidents in Canada are about one-tenth that of the United States. We also have an enviable marine safety record. There are about 20,000 tanker movements a year, with 85 per cent taking place on the east coast, and there have been no significant oil-tanker spills.

When it comes to the oil sands, the gap between reality and perception is vast. Most people are surprised to learn that our oil sands account for only 0.15 per cent of global greenhouse gas (GHG) emissions. Moreover, the industry has been focused on reducing its GHG output. Emissions per barrel fell 29 per cent between 2000 and 2016, and a report by research firm IHS Markit predicts they will decline by a further 16-to-23 per cent by 2030.

New oil sands projects are generating GHG emissions that are on par with – or less than – the average barrel refined in the United States. On what basis, then, can it be argued that we should curtail production?

If the oil sands were phased out, as some are advocating, the lost volumes would merely be replaced by other heavy oil suppliers, such as Saudi Arabia, Iraq, Venezuela and Mexico. Where is the moral justification to allow other oil suppliers – with little to no environmental or regulatory oversight and, in some cases, a record of human-rights abuses – to capture markets that we can supply, with our world-class standards and high ethical approach?

Curtailing the growth of Canada’s energy sector would only translate into lost jobs and a diminished financial capacity to support our own social prosperity. It would also curtail the very investment in research and development that can further improve our environmental performance to support the global transition to a low-carbon era.

The media, activists, politicians and our own tendency to oversimplify complex arguments have driven us to position this as a black-or-white issue. You are either an environmentalist or not; pro-oil and gas, or not. My extensive research, along with my own personal experience, tells me we can be both.

 

FROM AN OP-ED IN THE GLOBE AND MAIL, MAY 17, 2019

Author

Mac Van Wielingen, Founder and Partner, ARC Financial Corp.

 

Engaging Canadians | 2018/2019 Annual Report
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