Energy Perspectives

Canadian Energy at a Crossroads? Part 5

Canada has been trying for over a decade to engage an energy strategy discussion but we have been mainly avoiding the tough questions. Here are a few of the questions that I think we need to ask:

- How do we generate an honest public debate on climate and energy in place of the denial – of energy realities every bit as much as climate realities - that has characterized the past 30 years and may yet characterize the next decade?

- How do we address ourselves to intolerant consumers for whom even weak prices (as today) for petroleum and natural gas are never weak enough and who do not deem it their responsibility to square the circle on GHG emissions? How do we overcome consumer resistance to the price increases that are inevitable from truly aggressive GHG emission reductions?

- What do we do to cool the ardour of expectant stakeholders? Even in a recovered price world for oil and gas, Canada’s inherent high cost structure and many future cost challenges probably mean that the goose that lays the golden eggs has flown. But many Canadian stakeholders and taxpayers seem to have missed the departure announcement and expectations remain high with respect to royalties, benefits and revenue sharing.

- How do we manage the necessary corrective respecting the role of citizens and local communities in determining our energy future? Communities and citizens have to be more fully and effectively engaged. But at the same time we need to respect the bargain of Confederation. And we need to maintain public approval and regulatory processes that acknowledge that there will be some unavoidable disruption of the landscape and some risk and that respect the need to move energy over long distances, attract investment and get the job done in a timely fashion.

- How do we create more effective processes of policy and planning – at both urban and regional scales - that are essential to resolving many issues? These processes are inherently difficult in a market based economy and within Canadian cultural norms. The world of low risk tolerance, twitter speed communications, and nine second attention spans does not make them easier.

We talk a great deal about innovation but it is far from clear what we need to do to mobilize innovation in the Canadian energy space, fund that activity and ensure that Canada is a technology maker, not just a technology taker in the emerging energy world.

Deep electrification, a process that is probably essential to any deep reduction in greenhouse gases over the medium to long term, also poses challenges since it implies winners and losers and Canadians don’t like those sorts of conversations.

The political-economic environment for energy development is as tough as it has ever been. Sources of risk have multiplied with local communities and governments increasingly being the biggest culprits. And it won’t get easier quickly.

But rebuilding public confidence in public institutions, sustaining investor confidence in Canadian energy resources, reducing greenhouse gas emissions and moving closer to the leading edge of technological change are actually mutually compatible objectives as long as we approach them with common sense and realism about what is achievable through deliberate policy and in various time frames.

Finding the path forward will require a certain amount of political courage and that in turn requires a public debate which generates more light and less heat.

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