English | 中文版

Sebastian Gault, PhD
Energy Bridge Magazine

The American public intellectual Fareed Zakaria recently noted that a country can only prosper in the 21st century if it is a source of ideas and energy for the world. Whereas the "ideas" route may be more attractive to many, Canada has a better chance of really excelling at being a source of energy. The country has, in fact, already done very well at it.

Its reputation as an excellent supplier of energy comes by virtue of its global ranking in the production of hydroelectricity (#1), uranium (#2), natural gas (#3) and oil (#7). Already impressive, its production of energy is set to keep rising well into the future, with possible profound effect for the country's identity.

Ever since Prime Minister Pearson coined the term, we have embraced the notion of Canada as a global "peacekeeper". I suspect though that as the country's circumstances change this notion will be superseded by a more relevant one. Might it not be worthwhile to perform the thought experiment of re-branding Canada in another way, perhaps as an "energy power" or even "energy powerhouse"? I'm loathe to use the term "energy superpower", but that too might one day become a reality should Canada's growing share of globally exportable energy tempt it to use muscle in seeking foreign policy goals.

In the country's proverbial house of power, oil and gas are undeniably the most talked about, especially here in Alberta, where the business of their extraction, transport and refining form the indisputable mainstay of the provincial economy. For an Albertan "Alberta is Energy" is a widely accepted slogan. But it is not likely that a civil servant will be posting a "Canada is Energy" button on federal government website any time soon.

Amazingly, some Canadians are not aware of the country's staggering scale of oil & gas production. The broad energy sector comprises around a quarter of the market capitalization of the Toronto Stock Exchange. Oil and gas is an over $100 billion per year industry, more than double the size of the next industrial sector, automobile manufacturing. And all indicators point to the industry getting steadily bigger.

This development is, of course, not universally welcomed. Most irksome is that this trend toward higher hydrocarbon production rates runs at cross-purposes to the worldwide pursuit of a low carbon economy. For many, the attempt to reconcile these two developments is like trying to mix oil and water, but our Prime Minister (not by accident an Albertan) has, with his expression of a "clean energy superpower" inspired hope of their eventual reconciliation. If achieved, would then Canadians look more kindly upon the industrial extraction of hydrocarbons?

Pure laine peak oil theorists would consider this a wager on the wrong horse. They believe the petroleum industry is gradually collapsing as global petroleum extraction passes inexorably into its decline phase. The vacuum left by the slow end of this amazing energy carrier would then be filled by the so-called "renewables" like solar and "alternatives" like nuclear.

Actually, peak oil did happen, but what "peaked" was not oil in toto but inexpensive oil. Vast reserves of unconventional, and expensive, resources — like the oil sands and shale gas — became industry's alternate target and it innovated ways to tap them profitably. Fortunately, solar will soon be priced competitively with coal for electricity generation, but it will be a long time before solar and the other renewables will hold a significant piece of the gargantuan global energy supply pie.

Facing those who rally to end "the tyranny of fossil fuels" are the 800-pound gorillas of India and China. In the very early stages of industrialization, these emerging economies are acutely dependent on oil as a "GDP booster". For Canada's energy industry this is big news. After all, crude oil is a fungible commodity — and natural gas qua LNG is rapidly following suit — so China and other rapidly modernizing nations are turning eagerly to Canada as supplier. In fact, Asian petroleum companies have already made several ice-breaking billion dollar investments in Canada's oil and gas sector.

Canada's role in the 21st century as an important international energy supplier is an inevitability. Some may even regard it as an obligation. Criticism about the industry environmental record is becoming less tenable as regulations become stricter here than anywhere else. And relentless pressure from without the industry — and within  — keeps raising the bar.

The reticence of Canadians about turning our number one wealth creator into our national brand has, on the one hand, much to do with the perceived unclean quality of subterranean organic chemicals. Add to that hydrocarbon energy's inability to exemplify the "altruistic moment" Canadians so prize in our national character.

To make the energy brand more broadly acceptable I would like to lend my support to a proposal already made by others, namely to make it our nation's overriding goal to become global leader in energy efficiency. The goal of achieving a 80-90% increase in energy efficiency would turn an aspiration that is so often formulated negatively into a positive. This approach has the added benefit of focusing attention more on consumption behaviour and not just on the practices of those whose business is to fulfil a market demand.

To borrow a phrase from energy economist Peter Tertzakian, Canada is an "energy obese" nation, so this challenge would not be a walk in the park. But by emphasizing in all activities the great utility and value of each energy form throughout their respective life cycles, Canada may begin to more readily accept what it has nevertheless already become.