For several decades, Canada was the focus of a global attack on its natural resource economy, with its oilsands deposits (the world’s third-largest oil reserve) ranked as “public enemy number one.” Though only a tiny contributor to global greenhouse gas emissions (about 1.6 per cent of the total), the oilsands were seen as problematic. Production was particularly greenhouse gas-intensive and therefore, development of the oilsands would be particularly onerous from the perspective of people worried about climate change.
Canada worked hard to bring down the emission intensity of oilsands development, thinking to buy the salvation of “social licence to operate (SLO)” that would get it out of the international crosshairs of disapprobation. But on January 20, U.S. President Joseph Biden—the ironically popular favourite of most Canadians in the 2020 presidential election—showed just how much social licence Canada had purchased with its efforts to bring its oilsands emission intensity into line with such uncontroversial producers as Saudi Arabia, Russia and the United States. With great fanfare, Biden made it his priority to kill the Keystone XL pipeline, the last great hope left if Canada were to realize the economic value latent in its huge petroleum reserves. Rest in peace, concept of social licence, born 1979, died in 2021.
However, recent events suggest that Canada ought not to feel badly about having failed to attain social licence for oilsands production, sale and transport because the idea of social licence was spurious to begin with. Canada’s oil was not hated because it was particularly greenhouse gas-intensive; it was hated simply because it was oil. And Canada was not targeted for international outrage because it was a significant threat to the global climate, but simply because it was an easy target. As a country on the border of the United States, Canada wanted to be seen as a better global citizen than its southern neighbour. Canada has generally liberal sensibilities, supremely high environmental values and is a very comfortable place to stage protests with a guarantee of high visibility and very genteel treatment by the authorities. Not only would Canada not send out the army to suppress protests, it would not even dispatch Dudley Do-Right to stop anti-oil Snidely Whiplashes from tying sweet Nell to the railroad tracks to block oil transport.
The event that finally shows just how much of a distraction the pursuit of social licence has been, took place only weeks after the final victory over Keystone XL. The focus of international climatism has turned to stopping the transport of the oil long held up as superior to Canada’s: American light sweet crude oil, which is pretty close to the average greenhouse gas emission intensity of global hydrocarbon production. That’s right—now they’re after the black gold. The Texas tea. A roster of Hollywood celebrities, including some of the very same ones (Hi, Leo!) who flew over northern Alberta in emission-belching helicopters to proclaim Canada an environmental wasteland, now run the same game against oil producers in North Dakota.
There are three stark lessons here for Canadian natural resource producers and Canadian provinces dependent on petroleum resource income for their prosperity. First, we can forget about the idea of obtaining a social licence once and for all. That game is over—appeasement was a loser. Second, we can forget about looking southward as a continued (much less growing) market for Canada’s oil resources. If there’s a pathway to global markets for Canada’s oil reserves, it’s clearly not through the U.S. Finally, given the hard brackets of deep-green governance to the east and west, it’s probably worth some research bucks to see if there is a viable path to Asia through Canada’s true North, strong and free. Could the time have come for the Arctic gateway to tidewater via the Northwest Territories?
Kenneth P. Green is a senior fellow with the Frontier Centre for Public Policy.
