CALGARY — The World Energy Outlook 2012 report by the International Energy Agency has gotten a lot of ink in Canada because of this prediction:
"By around 2020, the United States is projected to become the largest global oil producer... and starts to see the impact of new fuel-efficiency measures in transport. The result is a continued fall in U.S. oil imports, to the extent that North America becomes a net oil exporter around 2030."
Obviously, if this is correct, it has tremendous implications for Canada, because of the expected double whammy of lower oil prices and less American demand for Canadian product. Developing new markets will be essential, which will require creativity and respectful collaboration, not rhetoric and character assassination.
I would, however, enter one caveat about the projected increase in production. It depends on continued fracking. But whereas early wells were fracked only once or twice, the process is now being used up to 40 times in one well. Since American public opinion is already becoming increasingly resistant to the technique, governments will no doubt respond to this increased intensity with tighter regulations. Thus, straight-line projections of future U. S. oil production may not be the best guide to the future.
Perhaps another part of the IEA report, about climate change — the defining issue of our time — should worry us even more.
According to the report’s executive summary, "the climate goal of limiting warming to 2 degree C is becoming more difficult and more costly with each year that passes. Our 450 Scenario examines the actions necessary to achieve this goal and finds that almost four-fifths of the CO2 emissions allowable by 2035 are already locked-in by existing power plants, factories, buildings, etc. If action to reduce CO2 emissions is not taken before 2017, all the allowable CO2 emissions would be locked-in by energy infrastructure existing at that time. Rapid deployment of energy-efficient technologies — as in our Efficient World Scenario — would postpone this complete lock-in to 2022, buying time to secure a much needed global agreement to cut greenhouse-gas emissions.
No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °degree C goal."
These facts, from a much-respected middle-of-the-road agency, should give pause to the business-as-usual advocates of expanded oil sands production, who seem to live in a cocoon of blissful denial of both the need to limit production for reasons of climate and the fact that "the economy is the wholly-owned subsidiary of the environment" (an aphorism attributed to both professor at the school of public policy of University of Maryland Herman Daly and chairman/chief scientist of the Rocky Mountain Institute, Amory Lovins).
At the moment, the mindless rush to expand oil production is being rethought, but merely for economic reasons. Maybe economics will save us, where the threat of widespread and catastrophic global warming will not. For when the price of oil declines more, due to increased supply and energy conservation, pie-in-the-sky profit projections and their attendant expansion plans may melt away. Add to this labour and material shortages and maybe oil sands greenhouse gas emissions will be reduced to acceptable levels in spite of ourselves.
Stabilizing oil sands production would also help us deal with the tremendous cumulative impact of past development practices.
Meanwhile, Saudi Arabia — yes, Saudi Arabia! — intends to spend more than $100 billion on solar electricity generation. Yet Alberta still has its collective head in the (oil) sands. Why can’t we help shape a new, diversified, energy future, instead of being immersed in steadily-increasing high-carbon energy production?
Let us remember that solar gain is much greater in Alberta than in one of the world leaders in renewable energy, Germany. Alberta could become a diversified energy powerhouse, instead of just an oil and gas hinterland.
When will we begin an adult conversation on energy policy in Alberta and Canada? Apparently we can’t depend on governments to initiate it. Maybe the Pembina Institute or Canada’s Green parties can lead it. Visionaries in the oil patch would probably also participate.
Alberta can do better — indeed, this could be our century — but only if our people make their voices heard.
Phil Elder is a former federal Liberal assistant (1967-70), NDP Alberta provincial candidate in 1982, and was a strategic Green voter in the last federal election.