Wednesday, January 11, 2012

Elizabeth May pleads for realism on Energy policy

By Elizabeth May, Green Party Leader on 9 January 2012 - 3:10pm (from her blog:

An Open letter to Joe Oliver, Minister of Natural Resources Minister of Natural Resources

“Unfortunately, there are environmental and other radical groups that would seek to block this opportunity to diversify our trade. Their goal is to stop any major project no matter what the cost to Canadian families in lost jobs and economic growth.
No forestry. No mining. No oil. No gas. No more hydro-electric dams.

These groups threaten to hijack our regulatory system to achieve their radical ideological agenda. They seek to exploit any loophole they can find, stacking public hearings with bodies to ensure that delays kill good projects. They use funding from foreign special interest groups to undermine Canada’s national economic interest.”

- From your open letter of today’s date, January 9, 2012.

Dear Joe,
Your letter caught my attention. I respect you and like you a lot as a colleague in the House. Unfortunately, I think your role as Minister of Natural Resources has been hijacked by the PMO spin machine. The PMO is, in turn, hijacked by the foreign oil lobby. You are, as Minister of Natural Resources, in a decision-making, judge-like role. You should not have signed such a hyperbolic rant.

I have reproduced a short section of your letter. The idea that First Nations, conservation groups, and individuals opposed to the Northern Gateway pipeline are opposed to all forestry, mining, hydro-electric and gas is not supported by the facts. I am one of those opposed to the Northern Gateway pipeline. I do not oppose all development; neither does the Green Party; neither do environmental NGOS; neither do First Nations.

I oppose the Northern Gateway pipeline for a number of reasons, beginning with the fact that the project requires over-turning the current moratorium on oil tanker traffic on the British Columbia coastline. The federal-provincial oil tanker moratorium has been in place for decades. As former Industry Canada deputy minister Harry Swain pointed out in today’s Globe and Mail, moving oil tankers through 300 km of perilous navigation in highly energetic tidal conditions is a bad choice. In December 2010, the government’s own Commissioner for the Environment, within the Office of the Auditor General, reported that Canada lacked the tools to respond to an oil spill. These are legitimate concerns.

Furthermore, running a pipeline through British Columbia’s northern wilderness, particularly globally significant areas such as the Great Bear Rainforest, is a bad idea. Nearly 1200 kilometers of pipeline through wilderness and First Nations territory is not something that can be fast-tracked.

Most fundamentally, shipping unprocessed bitumen crude out of Canada has been attacked by the biggest of Canada’s energy labour unions, the Communications, Energy and Paperworkers Union of Canada, as a bad idea. The CEP estimates it means exporting 40,000 jobs out of Canada (figure based on jobs lost through the Keystone Pipeline). They prefer refining the crude here in Canada. (The CEP is also not a group to which your allegation that opponents of Gateway also oppose all forestry, mining, oil, gas, etc is anything but absurd.)

The repeated attacks on environmental review by your government merit mention. The federal law for environmental review was first introduced under the Mulroney government. Your government has dealt repeated blows to the process, both through legislative changes, shoved through in the 2010 omnibus budget bill, and through budget cuts. In today’s letter, you essentially ridicule the process through a misleading example. Your citation of “a temporary ice arena on a frozen pond in Banff” requiring federal review was clearly intended to create the impression that the scope of federal review had reached absurd levels. You neglected to mention that the arena was within the National Park. That is the only reason the federal government was involved. It was required by the National Parks Act. The fact that the arena approval took only two months shows the system works quite well.

Perhaps most disturbing in the letter is the description of opposition to the Northern Gateway pipeline as coming from “environmental and other radical groups.” Nowhere in your letter do you mention First Nations. (I notice you mention “Aboriginal communities,” but First Nations require the appropriate respect that they represent a level of government, not merely individuals within communities.)

The federal government has a constitutional responsibility to respect First Nations sovereignty and protect their interests. It is a nation to nation relationship. To denigrate their opposition to the project by lumping it in with what you describe (twice) as “radical” groups is as unhelpful to those relationships as it is inaccurate.

“Radical” is defined as “relating to or affecting the fundamental nature of something; far-reaching or thorough.” (Merriam Webster).

By that definition, it is not First Nations, conservation groups or individual opponents that are radical. They seek to protect the fundamental nature of the wilderness of northern British Columbia, the ecological health of British Columbia coastal eco-systems, and the integrity of impartial environmental review. It is your government that is radical by proposing quite radical alteration of those values.

Your government has failed to present an energy strategy to Canada. We have no energy policy. We are still importing more than half of the oil we use. Further, we have no plan to reduce dependency on fossil fuels, even as we sign on to global statements about the need to keep greenhouse gases from rising above 450 ppm in the atmosphere to keep global average temperatures from exceeding a growth of 2 degrees C. The climate crisis imperils our future – including our economic future – in fundamental ways which your government ignores.

By characterizing this issue as environmental radicals versus Canada’s future prosperity you have done a grave disservice to the development of sensible public policy. There are other ways to diversify Canada’s energy markets. There are other routes, other projects, and most fundamentally other forms of energy.

I urge you to protect your good name and refuse to sign such unworthy and inaccurate missives in the future.


Elizabeth May, O.C.

Member of Parliament

Saanich-Gulf Islands


Green Party of Canada

Comment: Once again, in the use of loaded language - "radical", the deilberate misrepresentation of the intentions of environmentalists as threatening jobs, etc - we catch the Harper government stooping to cheap populist demogogy. This is the "politics of fear", a tactic employed in the 20th century by totalitarian governments  at both extremes of the political spectrum (fascist, communist). Such language should be taken as an insult to the public intelligence. It is inevitably a smoke screen used to deflect public attention from the real issues at stake. In reality, green energy will produce the greatest number of stable, permanent jobs: virtually all the economic studies I have encountered conclude that green energies - not centralized, capital intensive fossil energy projects - produce the greatest number of jobs per dollar invested. Green energies are labor intensive, fossil energy is capital (infrastructure, financing) intensive. Populists though are interested in Power, not Truth..

Thursday, January 5, 2012

Shedding light on Peak Oil

            This is an important book on energy, how much it will cost in the future, what this will mean for our "way of life". The Harper government is in bed with the Oil corporations: they provide a very one-sided perspective on the energy future of this country. To counter this slanted presentation of Canada's energy future, we are reproducing a review of an important book on Peak Oil here.
Book review: Jeff Rubin: Why your world is about to get a whole lot smaller, Oil and the end of globalization (Random House, Canada, 2009) 265 pages; notes and index. Rating 8.5 / 10

HEADLINE: Summer, 2008. Spike in oil prices to $145 / bbl announces the end of the Era of Cheap Energy

             Economic insider, Jeff Rubin, former chief economist at CIBC World Markets, has written a very readable, accessible introduction to "Peak Oil" and its future impacts. Although we have doubts about Rubin's cheery "business (almost) as usual" prognosis, he does nail down the basic mechanics and, for this, he gets close to full marks.

             Peak Oil refers to human rationality: humans will pick the "low hanging fruit" first; they will first extract the most accessible, cheapest to exploit, reserves of a non-renewable resource  (petroleum). This is logical: low production costs mean higher profits. Only later, when cheap reserves are depleted, will producers willingly switch to more risky, expensive reserves. To maintain profit margins they will pass on the increased cost to the buyer. Prices will rise, establishing a new market equilibrium of supply, demand and price.

             In extreme cases, such as the contemporary global oil market, supply may become so constricted - "tight supply" - that even exploding demand for oil in emerging markets (China, India) cannot conjure oil out of the ground faster than it's coming already. Supply curves flatten - before, eventually, declining - despite rising prices and demand. This peaking and subsequent flattening of oil production is colloquially referred to as "Peak Oil".

             In effect, the problem the globalized world economy faces today is simple: we've put all - or most - of our eggs in the basket called "fossil energy supply" and now that basket is falling (this is why granny used to say: don' t put all your eggs in one basket!) As easy to access reserves of fossil energy deplete, prices will rise, stiffling the economic growth our economic system requires in order to function - or merely survive.

            In theory, way back in the 1970s - when people began to realize that we had demographic / environmental problems, we could have "converted" our remaining reserves of cheap fossil energy (coal, oil, gas..) into green energy infrastructure. Waiting until production costs of newly exploited oil fields becomes prohibitive is obviously not an intelligent strategy. Paradoxically, this imbecilic, "wait till the free market provides price signals for green energy development" strategy - promoted by the fossil fuel lobby - has been the policy followed for the last 40 years in first world economies. As Rubin indicates, rising production costs of newly exploited reserves - offshore reserves, tar sands.., will stiffle the transition to a green energy economy. In addition, our margin of error has now shrunk to the vanishing point. We have neither the time, the money, nor the resources to make mistakes. If we had begun a programmed transition to green energy back in the 1970s, we could have avoided the urgency to "get things right the first time". Letting things go to the last minute is dangerous and stupid if you life depends on making right decisions.. In addition, it is more costly to convert to a green energy economy today: the energy "embodied" in the construction of renewable energy infrastructure is more expensive than 40 years ago.

           One of the main victims of cheap oil's demise will be the globalized economy itself. The analysis of the impacts of Peak Oil is indeed one of the strong points of Rubin's book.

            During the Golden Era of Deregulation - the Reagan / Thatcher era, international trade barriers fell. Blue collar - and eventually white collar - jobs were exported overseas to 3rd world sweatshops, call centers and software writers. When energy is cheap and tariffs non-existent, this makes (short-term) economic - if not moral or strategic - sense: wages and environmental  costs associated with regulations are lower (or nonexistent) in the 3rd world. As a result of "outsourcing", profits, dividends to shareholders, obscenely inflated salaries and "bonuses" to megacorporation plutocrats shot through the ceiling. The rich got richer and the poor got poorer - bigtime! The rustbelt spreading through disaffected industrial towns of America marked the demise of the "American Dream" for the little wo/man.. As peak oil now rears its ugly head, we are forced to recognize that the Cheap Energy Binge is over. Now we have the hangover, the cops and the landlord to deal with.. (So hungover, you fear you are going to die. And then it just goes on and on and on, and now you're so sick you really are scared you're NOT going to die..)

             As the world economy attempts to recover from the "Great Recession", oil prices will spike again - since supply remains "tight", prices will be driven up by scarcity. Speculation may further inflate prices, repeating the boom-bust cycle of summer / autumn 2008 (which was the cause of the construction bubble collapse in the USA which, in turn, brought down the globalized financial sector, triggering the Great Recession) - this is one probable scenario. Another possible scenario - the economy will be stiffled by higher "new oil" costs and will never recover but continue its death spiral. This latter scenario now seems the more probable one. Only time will tell..

             Regardless of which scenario materializes, the globalized economy is cooked. It will be too expensive to ship cheap rubber bath duckies and steel from China to N. America and Europe. As Rubin says, we will have to get used to producing / consuming locally and regionally as people did in the past. We will relearn the virtues of local food: it will be too expensize to ship mangoes to MontrĂ©al from tropical plantations employing massive inputs of expensive fossil fuel energy in the form of fertilizers, pesticides, fungicides, insecticides and transport. We will have to reopen rusting N. American steel mills if we want steel, buy N. American vehicles if we want travel and transport.

              For me, the weak point of Rubin's analysis: where will all the locally / regionally produced energy come from? Can we get enough renewable energy online, fast enough to avoid really serious economic and social disruption? If we can, at what price? Will that price be too high, stiffling any hope of long term economic recovery? I am not sure that even "green" Western Europe has enough installed green energy infrastructure to make the transition a peaceful one. It is for the perceived weaknesses of Rubin's analysis of the long term situation, that I withhold full marks: 8.5 out of possible 10.

               As a general introduction to the subject of Peak Oil, especially for younger readers, it's hard to beat this book - despite its weaknesses.