The Biden administration’s quick cancellation of the Keystone XL pipeline’s permit came as no surprise. It was a marker for his party’s climate progressives who fervently believe that conventional hydrocarbons are warming the planet, bringing on a “climate emergency” requiring aggressive world-wide government actions. The climate progressives advocate phasing out all hydrocarbon energies. It is an ambitious goal since fossil fuels are the lifeblood of modern society —powering about 84 percent of the world’s economy in 2020—warming our houses, schools, and workplaces, and fuelling our factories and transportation systems.
The climate progressives’ plans to substitute solar and wind for conventional energy sources have been embraced by the media establishment, Canadian political parties, the corporate establishment, and, rather oddly, the adherents of the “go along to get along” philosophy—Canada’s oil and gas industry.
If you are on the traditional big-government left, an ambitious endeavour to wipe out cheap energy, the foundation of our high living standards, is a handy proxy way to crush the capitalist system that has served Western society’s living standards so well. Expanding political control of our energy economy to “save” the planet requires a highly activist government model. It is a central planner’s nirvana—regulate and “educate” energy users, for example, while creating massive subsidy and handout programs for their politically favoured energies (solar and wind).
Until COVID-19 came along, it was also a ticket for reordering modern society, densifying cities, fighting sprawl, investing heavily in mass transit, and so forth.
Today’s COVID pandemonium has parallels with the left’s climate change project. The lockdown model essentially quarantines healthy populations who are not at significant risk from the virus. It has caused enormous damage to the economy and government finances, including bankrupting thousands of small businesses. Places without lockdowns have seen lower death rates without these catastrophic costs. The COVID disaster found its stumbling start in grossly inaccurate computer modelling that vastly exaggerated death rates—350,000 projected in Canada against 19,000 actual so far.
Climate change models are similarly based on fishy computer models that connect rising temperatures to increasing levels of carbon dioxide which, according to parameters programmed into the models, entrap the sun’s heat in the atmosphere, eventually causing dangerous warming. Carbon dioxide (often more sinisterly referred to as “greenhouse gas”) just happens to be a by-product of burning hydrocarbons—hence the computer model’s case for their elimination.
In fact, there is little correlation between C02 and global temperatures in the real world outside of the climate modellers’ computer models. Unfortunately, most people only hear one side of the story, even though there are thousands of credible critics of this greenhouse gas theory. Patrick Moore, one of the original environmentalists and the co-founder of Greenpeace, aggressively makes the case that carbon dioxide is the gas of life, sustaining plant life on Earth. Moore notes that C02 is at historically low levels, and that the planet would benefit from higher levels, indeed, from burning more, not fewer, fossil fuels.
The term “global warming” conveniently morphed into “climate change” over a decade ago because, while C02 is rising, there has been no significant warming. In Canada, temperatures are flat or declining. On the Canadian prairies, the number of growing-degree days has fallen by an average of two days a year since 1985. However, Canadian politicians are constantly bombarded by catastrophic policy messaging about warming, even though slightly warmer temperatures would benefit Canada, particularly our agriculture sector. A colder Canada would devastate our living standards—a fall of fewer than two degrees in average temperature would wipe out prairie agriculture. These are inconvenient facts for the climate progressives, so such discussions elicit massive pushback.
But, best to follow the money. Literally hundreds of billions of dollars in government subsidies, careers, teaching positions, policing, and enforcement, and other government programs are now tied to the “man-made” climate change narrative.
For now, the climate change narrative has become embedded in our policy landscape, of religious importance to the many interest groups that benefit from it.
We will need to accommodate this juggernaut in a win-win way.
If you are in an energy-producing province like Alberta or Saskatchewan, it’s time to play hardball, particularly after President Joe Biden’s cancellation of the permit for an almost completed Keystone XL pipeline. The largest source of Canada’s export earnings, high-paying jobs, and government revenue (including equalization) still come from the oil and gas sector. Even the level of the Canadian dollar is tied to our oil and gas sector. These resources must get to market somehow.
The federal government has the opportunity and fiscal ability to compensate for Biden’s betrayal by removing regulatory and political barriers to two other pipeline options.
By removing the current West Coast tanker ban, the federal government can and should move the Northern Gateway pipeline forward. As there has never been any East Coast tanker ban, there has never been any equity in restricting western access. Second, the long proposed Energy East pipeline would see oil flowing eastwards, displacing the foreign oil from Saudi Arabia and Venezuela. To push this through, the federal government would have to exercise its power to enforce interprovincial trade—overruling the opposition of Quebec politicians polishing their so-called green credentials to the worthy project. A 2018 poll by the Montreal Economic Institute found that 66 percent of Quebecers favoured buying Western Canada oil over foreign alternatives.
The alternative of stranding western oil due to lack of pipeline capacity will only fan the dangerous fires of western separation, and risk the end of Canada as we know it. More practically, all governments, federal and provincial, could use the money from selling a valuable commodity to world markets, those now mainly in Asia. Climate resets cost money, so both the Northern Gateway and Energy East opportunities are no-brainers.
What about Manitoba?
Ironically, our province is well-positioned in the climate change-obsessed policy landscape. The Biden administration will be going hard on the electric vehicle (EV) file. Steadily advancing EV battery technology will eventually push aside traditional gasoline-powered cars. EVs will, at some point, be cheaper to run (operating and maintenance costs) while offering superior performance—quieter, faster, etc.
The rise of the EV will supercharge demand for nickel, lithium, copper, cobalt, and other minerals required to build millions of batteries for millions of cars. Manitoba sits on a treasure trove of such resources, and is located relatively close to huge American markets. To benefit from this potential green bonanza, Manitoba needs to modernize, simplify, and otherwise accommodate mineral development in smarter ways, working with the feds. At a higher level, it could also leverage local engineering clusters by targeting value-added industries around battery manufacturing.
Instead of exporting valuable hydro power below cost to low-priced American and Saskatchewan power markets, it makes more sense to stimulate local consumption of electricity by pushing EV value-added and energy-intensive mining. The EV market will grow naturally without expensive subsidy programs. EV costs are falling fast enough that adoption rates will increase on their own. Since most people will charge their cars at home and the market is building chargers along major highways anyway, there is little special need for programs to build out charging infrastructure, though Manitoba Hydro might follow the experience of European utilities building out charger networks. And ironically, the prices of EV motoring will fall faster naturally if we are able to start selling our oil into Asian markets. Why? Because our dollar will rise, cutting the costs of EV imports.
Manitoba can also stimulate green domestic electricity consumption by adopting policies that supercharge population growth, but that is for future commentaries.
Peter Holle is president of the Frontier Centre for Public Policy.
