Tuesday, March 29, 2016

After the Sands

Many of us Canadians are embarrassed about the Alberta Tar Sands, but the whole issue is more complex as described in "After the Sands" by Gordon Laxer.  Elsewhere I have written about the central role it has played in the Canadian economy.  As the price of oil takes a downward swing it causes a different set of concerns.

These days unless you are a climate change denier you are focused on developing renewables and for the time being conservation, when you are forced to use fossil fuels.  Canada is at a very awkward point in that recently our economy was very dependent on the Tar Sands and now that the price of oil has declined severely our economy is hurting, at least in terms of importing goods.

I should have known that while western Canada is exporting to the U.S., eastern Canada has to import much of its oil which means we are not as oil secure as many thought.  Laxer goes into a history of how we arrived at this situation, but it boils down to the Americans have negotiated that buying Canadian oil gives them oil security.  This the author asserts should be re-negotiated and points out that Mexico had successfully rejected American demands that would have impacted their energy security.  Canadians are one of the few industrialized countries without a Strategic Petroleum Reserve.

Laxer refers to Jeff Rubin who has thought higher prices for oil would force more manufacturers to locate closer to their customers.  Labour costs are also rising in some developing nations such as China, but it seems global countries are always looking for cheaper labour from more desperate countries.

Norway has set a model for the rest of the world setting aside oil revenues for the benefit of their citizens and with transition plans.  They asserted their national rights to natural resources and held out for higher royalties.  They have been careful that local manufacturing not be harmed by the oil business.  Alberta in contrast has lowest taxes in Canada and argued against higher royalties.  Oil extraction equipment for the most part is purchased in the United States.  Caterpillar supplied much equipment, but has pulled out of Canada.

Laxer points out situations that could cause a problem.  Strikes in Britain at one time jeopardized oil supplies.  Something like 11% of oil to eastern Canada passes the Strait o Hormuz which is only 3 kilometres wide at one point between Saudi Arabia and Iran and subject to Middle Eastern politics.

Although an Albertan, Laxer has long seen the importance of dealing with climate change, but sees that at present the Americans have a stranglehold on conventional oil from western Canada as well as Newfoundland.  He also believes in renewables, but thinks a more important strategy would be conservation.  There is not as much energy in renewables as in fossil fuels and we can never achieve as much efficiency as from the original source.  He points out that much of the rest of the world has learned to live with limited supplies.  During World War II we all lived with rationing.   BC Hydro (where a good friend of mine worked) has a strategy to save capital costs by encouraging conservation.

Laxer would gradually cut down the Sands Oil, and thinks Canada should assert its right to provide energy security with conventional oil.  Pipelines from west to east go through the United States, but he would like to see more all Canadian routes.  He points out that Bitumen corrodes pipes more than conventional oil.  Residents along pipelines are naturally concerned about leaks.  Harper tried to change laws so that natives could not stop pipelines and environmentalists have increasingly aligned their efforts with indigenous groups.

Jobs are a concern and Laxer sees education as critical and for re-training.  Intensive farming and improved transit are key strategies.

For me a key thought was that we should strive for sufficiency as much as  efficiency.  He quotes Gandhi:  "The world has enough for everyone's needs, but not enough for everyone's greed."  Another quote used by George Monbiot:  "It is a campaign not for more freedom, but for less.  Strangest of all it is a campaign not just against other people, but against ourselves."  As always it seems most crises come from greed--someone wanting a bigger share.

Gordon Laxer has another big idea that you can read about.  Tradeable energy quotas he believes would have more impact than cap and trade or taxing fossil fuels.

For up to date views of Gordon Laxer go to:  http://www.gordonlaxer.com

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