Canadian energy at a crossroads? Part 1
Stresses, strains and opportunities
Notes for Energy Council of Canada: Canadian Energy Industry - Updates and Insights
Ottawa, February 2, 2016
Many people talk about the continuing need for a productive energy dialogue to get at the many issues facing Canada but I want to get to some of the tough questions that we need to be willing to ask if we want to make real progress in such a dialogue.
First, let’s talk about some of the factors that I think will shape our energy future over the medium to long term. There are a number of trends (more on which ones in upcoming posts) whose combined effect could well be highly disruptive to both our energy industry and our energy systems more generally over the medium to long term and I want to explore some of those possibilities.
Before that though, it is not possible to talk about energy in Canada today without acknowledging the extraordinarily difficult patch we are going through in the face of the oil price collapse. However, the oil price collapse may be one of the least disruptive of the many forces in front of us and we need to guard against being short sighted. Prices will most likely return – although maybe not quickly - to levels that will keep Canadian production in the game for some time to come. And price shocks – both upside and down – will continue to be part of the game.
If anything is really shocking, it is the complacency of Canadians and their governments during the fat years that we experienced through much of the last decade. We all live in the short run but for much decision making, especially by government, it really is the long trends that matter. Are those trends pointing to fundamental change?
As it turns out, real transformative change in energy is kind of rare. The last people who actually lived through such transformations are mostly dead. I am talking about the widespread application of electricity and the emergence of the petroleum fueled internal combustion engine.
Nuclear energy was supposed to be transformative: some may remember the phrase “too cheap to meter”. But nuclear turned out to be just another power generation technology. So it is a bold forecaster who suggests that we really are on the cusp of a deep change in the energy landscape. But without exactly forecasting such a change I am going to make just that suggestion.
What if the energy world is changing fundamentally from the one in which Canada made its rather silly claim to be an energy superpower? What if we are not even close to being a superpower? What if we are missing the point?