Winnipeg Free Press - PRINT EDITION
Harper's 'lurch' strategy failing
Canada's energy strategy is failing on all fronts. In effect, Canada's energy policy or strategy is a Stephen Harper construct, focusing on specific projects of short-term political expedience, and largely ignoring environmental issues.
It makes no effort to acknowledge or reflect the priorities and requirements of each region of Canada. Ad hoc and sporadic, it is doing Canada a disservice politically and economically, causing loss of respect as a global citizen.
Growing global concerns, particularly around the subject of climate change, set the stage for all other considerations. Climate change can no longer be denied: The increased frequency of severe weather incidents worldwide should be sufficient to draw the attention of anyone paying heed. When we find major storms moving up and across eastern North America carrying a magnitude of water comparable to the Mississippi River becoming airborne, while areas to the west face drought, it's time to take note.
Environmental, economic and energy concerns are interrelated: Touch one and the others feel it.
Although there will always be some kind of "environment," not all possibilities may accommodate human existence. Over the millennia, the environment of the world has varied considerably, in several instances quite dramatically due to forces external to the planet (extinction of dinosaurs).
The next major ecological disaster, however, could well be driven by human activity. The complex ecological systems that have absorbed virtually all mistakes of humanity to date are reaching the edge of their capacity to adapt to the impacts of both the rapidly increasing numbers of people and, more importantly, the exploding pace of their use of technology and indiscriminate use of resources, with accompanying pollution. The evidence is there to see: disappearing Arctic sea ice, more severe weather incidents and a massive glacier melt that will raise sea levels. The risks of sea-level change, now evident along the eastern U.S. seaboard and Gulf states, are finally getting attention.
In Canada, major impacts will be felt in northern areas, particularly the tundra permafrost and the Arctic Ocean, although the Prairies and all northern regions will be significantly affected. Greater variability in water levels and flows will be challenging and difficult to forecast.
Individual countries show signs of concern from time to time, but usually with accusations of wrongful resource management by another country, the EU ban on natural furs being one example. The assertions of activists and governments (U.S. and EU) surrounding the oilsands don't account for the CO2 generated and pollution impacts from oil imported from the heavily oil-soaked marshes of Nigeria. Nor does the U.S. acknowledge that taking the tops off mountains to strip mine coal for electricity generation produces huge quantities of CO2.
As is so often the case, major environmental issues are always someone else's problem. It's easier for U.S. activists to rally against the Keystone pipeline (Canada) than address problems within their own country.
As a country, Canada does not have the political and policy infrastructure in place to deal with complex energy, environmental and economic realities among divergent regions.
Each region has unique resources, environmental and economic dimensions, interrelating only to a degree. External global circumstances impact each of them in different ways. Canada's Constitution Act of 1982 does not specifically provide for such political infrastructure, but it does not prevent it from being developed. In its absence at this time, however, we are left with Stephen Harper to take the initiative.
Canada is experiencing massive pressure to implement environmental measures soon, or suffer trade impediments. U.S. President Barack Obama, has come out clearly on the issue of global climate change. The U.S. is going to act and it will act in its own interest.
This response will focus on clean energy, but also will in some way accommodate the coal industry, in response to massive pressure from the coal lobby. Canada's economy will experience turbulence from actions south of the border. If it does not pay close attention, Canada will find itself playing catch-up with its neighbour, to the real detriment of its resource-based sectors. Americans will always look after their own first.
This needed reaction may be a poor way for Canada to engage and act over concern for the global environment, but it is certainly better than continuing to ignore it. The argument that Canada was instrumental in the Kyoto accord has no relevance to today's situation; moreover, the then-prime minister signed it knowing at the time Canada could not possibly meet the targets.
Since Kyoto, much has changed, but the economic role played by energy has grown considerably. Negative impacts on the environment are greater, even though other efforts are reducing CO2 outputs from other sources (more efficient cars, better home insulation, efficient appliances). New sources of energy, particularly shale gas from fracking, as well as wind and solar technologies, have reduced CO2 emissions overall, but also impacted the potential rates of return on long-term large investments in hydro-electric and nuclear projects.
These newer technologies appear benign in terms of environmental impact, but it is important to remember the wind does not always blow at the preferred speeds, and the actual environmental impact of solar must take into account the alternate uses of the land upon which they are installed.
For example, high subsidies from the Ontario government have resulted in solar panels replacing agricultural uses of high-productivity lands in the Windsor area.
The interconnections of energy, economy and environment must be taken into account together, not separately. It is a synergistically interconnected system. For example, ethanol produced from corn has impacted agriculture as well as food supply.
Energy issues facing Canada today require well-informed and considered approaches. Co-ordinated effort on the part of all governments and the private sector is the needed basis for action. The latter go well beyond just energy companies. Financial institutions, housing, social services and infrastructure needs will deserve attention. Processing and refining industries need to be looking for Canadian locations for their operations. Excuses about unused capacity on the Gulf Coast, for example, reflect poor judgment on the part of the industries themselves. There is no excuse for deferring future refining needs within Canada. Governments generally are financially stretched, but cannot cut too deeply without affecting economic health. The challenge will be to identify the highest-priority policies and projects and stick with them -- a tough action in a democratic system.
Almost a year ago, Stephen Harper went on record as questioning what an energy strategy might be and why it might be useful.
Despite this, his actions indicate he has been implementing his own strategy. As a reaction to corporate interests, Harper has jumped on selected projects, Keystone being one example, and sought to bring benefits to Canada by supporting these interests.
When the Keystone decision was deferred, he reacted by suddenly looking for markets in Asia. There's nothing wrong with this; such markets deserve investigation. This provided a rationale to support a gas pipeline from Alberta to the Pacific Coast, without any apparent thought to the complexity associated with the idea, aboriginal, intergovernmental, environmental issues as examples. The appearance was that the government was simply lurching from one project to another without any overriding strategy except just that: the "lurch strategy."
With no apparent framework or national strategy, it is impossible to prioritize, coordinate, plan, finance and execute projects needed to ensure Canada's place as an energy-exporting nation. A political apparatus is needed to develop such complex strategies. That would include Parliament and provincial legislative assemblies, but also first ministerial co-operation will be essential.
Absent this, enter the implementation phase of Harper's apparent strategy.
The "lurch strategy" was to be backed up by decimating environmental legislation and funding. Even though the "spin" for this endeavour was to curtail the interference of "foreign" (read U.S.) environmental activist organizations while speeding up due process on environmental assessments, the devil was in the details. Some of the details deleted were reasonable (drainage ditches are not streams in terms of the original intention of the Canada Water Act), and U.S. activists were clearly supporting local efforts to frustrate local environmental assessments.
Ultimately, the overall effect leaves open the strong likelihood of serious environmental degradation and pollution in the future.
Concurrently, budget cuts to key environmental programs were implemented. Closing the Experimental Lakes Area Research Program is the best example of this. The "whole lake" research done there over several decades illustrated the benefits from using real settings that cannot be replicated in a lab. Research findings at the ELA were recognized internationally and are essential to continuing improved understanding of lake ecology. Interestingly, this research and its results are critical to addressing concerns over water quality associated with the oilsands.
The implied objective of these legislative and budgetary actions suggest environmental issues need to be suppressed if economic development is to flourish, and that means energy, specifically oil export, must be encouraged at all costs.
Nowhere is there a co-ordinated process in place to plan, articulate and implement sustainable economic, environmental and energy priorities. The latter is possible, but only when open discussion is encouraged in order to find the best of all options.
This strategy reflects an approach that the Bruntland Report finally put to rest in 1987. Implied is the notion that pollution is a problem we'll deal with later -- now we want to sell the energy so the economy can improve. This is not reality. It's a bit like St. Augustine asking God for "chastity... but not now."
The economy and energy situation will improve only if the environmental impacts are addressed up front. That's the reality, and it can be done if everyone considers changing their "mental model" to one that consistently puts environmental factors in the mix by listening, considering and discussing.
A U.S. decision on Keystone is still being considered, but it may be made soon, and if Obama's intentions about climate change are implemented, it might be rejected. If approved, there might well be some quid pro quo attached. At a minimum, some clear direction on climate change will be needed. This is a weak and reactive way to develop a comprehensive strategy to ensure Canada's best interests into the future.
In the meantime, the Gateway pipeline proposal is meeting resistance on environmental grounds, but a pipeline to the east may well evolve, thanks to the premiers of Alberta and New Brunswick, not the federal government.
Virtually all provinces are struggling to deal with their own unique situations. In some cases, concerns vary from increasing energy costs to consumers to how to meet growing domestic demand.
The solutions may lie in large measure within Confederation itself. The needs of one region may be met within Canada, if goodwill can break out. Several provinces rely heavily on the energy sector for revenue and jobs, and major developments carry with them the camp followers of drug, alcohol, and other social issues connected to rapid change or anomalies in demographic structure. U.S. markets have almost dried up, except for existing oil and gas exports. Due to the shale gas developments, this picture is not expected to change significantly in the coming years. But other world markets exist, and together the regions of Canada can take advantage of these by working together.
The Arctic Ocean is becoming more accessible, and it holds considerable oil and gas potential. It will also be affected most severely by climate impacts on species and on permafrost (shorelines undergoing significant changes as well as the tundra). The term 'security' covers a wide range of issues in the Arctic, deserving of immediate strategic action.
Aboriginal issues need attention, and that begins with listening. The First Nations, Inuit and Métis of Canada must to be part of the broader conversation on energy, environment and linkages to economic activities.
So far, all of this is going on with very little discussion among the players, except for occasional acrimonious statements where apparent conflicts or overlaps occur. Although each jurisdiction may have its own strategy (stated or implied), the lack of coherence affects the viability of local as well as the Canadian economy, and frustrates access to export opportunities.
Some premiers, particularly those of Alberta, Saskatchewan, New Brunswick and Newfoundland and Labrador, are trying their best. Theirs is not a national responsibility, but Canada should be grateful for their efforts.
It doesn't have to be this way.
If all the players got together to find solutions of mutual acceptability, Canada would be better off. The result should not, however, be just a dog's breakfast of projects across the country, or a continuation of the "lurch strategy." It needs to begin with a framework within which all initiatives can be considered, a true "national strategy." It means all players need to come to the table with the idea that together they can make Canada a better place. In the absence of Harper taking the lead on this, continuing and greater provincial efforts are needed to put Canada on the right track.
Jim Collinson is a management consultant specializing in the complexities surrounding energy, economy and environment issues. For two terms, he was president of the UNESCO World Heritage Committee.
Republished from the Winnipeg Free Press print edition February 23, 2013 J1