It's a competitive strategy and it's a challenging strategy that's positive for the industry. That problem is us. It's a huge value creator. Calorie intake fell by a third. The third difficulty with the anti-growth approach is that growth is part of the solution to climate change. New technologies, particularly those with first‑mover advantage, tend to be profitable, and there will be incentives for pension funds and insurance companies to get their money out of the fossil fuel sector and into a sector that has massive growth potential. Tracy: Right. And if it's not Canada producing these resources, the resources will get produced in other jurisdictions and these other jurisdictions do not have the same quality of governance oversight that Canada has and ESG standards. Mark Carney, the governor of the Bank of England, does not believe it either, which is why he went public at the 2014 annual meeting of the World Bank with his view that the “vast majority of fossil fuel reserves are unburnable” if we wish to keep the increase in global temperatures below 2C. In 2043, the fossil fuel age is over: nuclear power stations ar e melting down, there is no access to the electricity grid and solar panels are so prized that they are looted. It’s as you know, it's a huge employer. You wouldn’t be reading this blog post. But the collapsing cost of crude oil is the equivalent of a tax cut for energy consumers; governments could remove subsidies painlessly in the current climate. And many of them have said to us, you know, 'we can't even really justify dedicating the resources to trying to figure out Canada, to understand, you know, what in fact might unfold.'. And so, I look at these dilemmas really through that kind of lens. The grow-your-own drive has only been partially successful: a quarter of a century later, food is still rationed in Cuba. BP admits that, on its current projections, emissions will “remain well above the path recommended by scientists”. But even then, you know, we just don't think, we don't see the same level of polarization we see in Canada. Of course, renewable energy alone won’t replace the huge economic and employment opportunities traditionally supplied by oil. The UN is hosting a conference in Paris in late 2015 that will seek commitments to reduce carbon emissions from all the countries attending. Nevertheless, he is certain, “solar and wind will be two major sources th… Without question, Africa’s energy consumption is going to rise. This is one of the reasons why the deep-green approach to climate change is fraught with difficulty. Oil Sands Question and Response (OSQAR) is a blog created by Suncor Energy to support constructive dialogue about the oil sands. If you do not see a subscription sign-up form above, it may be because your browser has an ad-blocker set up. Nigeria can plan economy without oil, says Agusto. > GDP rank: eighth largest. However that unfolds, there's an offsetting asset. They don't really want that closeness. The talk at meetings of the International Monetary Fund and the G20 is whether the next financial crash will be caused by the pricking of the carbon bubble – the idea that the stock-market valuation of fossil fuel companies has been inflated by overestimating the worth of reserves of oil, coal and gas that could only be exploited by putting the climate at risk. Its carbon footprint is tiny. There are not many votes to be won these days by promising to increase foreign aid, but taxpayers in the west have to realise that poor countries with copious reserves of fossil fuels are going to exploit them, and that one way of mitigating the impact is to transfer to them the latest technology. And so, I would just end with that Tracy, and just say I appreciate this opportunity to have this conversation with you. The IEA also makes the point that it is time the world got its act together. And I find that shocking. Mac: I have not had one person say to me, 'oh, no, it would be the same.'. We pay high wages and help American families work … Like, I was looking at one study just this morning and it's saying that, 'well, yeah, oil, the oil industry, that's it now it's done. Because we've seen record government spending in response to the COVID crisis. And it's shocking. Rising sea levels have caused floods on the New York City subway, killing thousands. To get a better idea of how important oil is to the Canadian economy, public and private consumption, government investment and spending and foreign balance of trade (net exports) among other factors must be considered. It certainly has hurt investor confidence. “What matters is the sort of growth we choose. And then with respect to the government sector spending, the spending they've been doing. © 2021 Guardian News & Media Limited or its affiliated companies. There are those who might argue otherwise, but life in the world before the industrial revolution really was nasty, brutish and short. The mission could be to phase out domestic use and export of coal by a fixed date, or to set a deadline for shifting 50% of US energy consumption to renewable sources. Apart from the impact on households, power shortages are holding back growth and job creation. “It’s pretty obvious that we can’t both burn fossil fuels and limit the damage from climate change. The business-as-usual camp says that the scientific consensus is wrong about climate change, or that climate scientists have exaggerated the risks, which can be tackled if and when they become apparent. The Cuban government responded by creating urban farms: agriculture went local, small scale and – by necessity – organic. And who's going to replace that production? And as a strategy, as a government strategy and governments all over the world are doing this, I can see that it made sense for them. She told the Royal Society that her government supported the idea of sustainable economic development, and concluded: “Stable prosperity can be achieved throughout the world, provided the environment is nurtured and safeguarded. It's not like a corporation that borrows a whole bunch of money and goes out and builds a new plant or new facility or makes an acquisition. Oil and the economy The oil conundrum. Mac founded ARC Resources and ARC Financial, which is Canada's largest energy focused private equity firm. Thank you so much for your time today. The economy of the State of Texas is the second largest by GDP in the United States after that of California.It has a gross state product of $1.887 trillion as of 2019. And the enormous amount of attention and debate relating to demand rolling over and the industry moving in to some kind of a state of total decline. The second is the transitionary bit: the only serious way in the next 15-20 years to bear down on coal is to switch from coal to gas. And that's, you would have heard me use the expression before, in a long-term transition, the last barrel should be the best barrel and Canada should be offering the best barrel. It is not just about R&D. And so, my point is that we need to think synergistically across a number of fundamentals and the economic fundamentals should always be there. He's a veteran energy executive. And so, I'm very partial to the advantage, the natural competitive advantages that Canada has as a small population and a very, very large country and vast resources. The oil price boom from 2003 to 2013 fueled rising prosperity in Saudi Arabia, which became the world’s 19th-largest economy. And then naturally, that moves out publicly and globally. The image of Iran's economy as oil, carpets, and pistachios was always flawed, but has now become badly dated. It does cut across the whole economy and it's a very important part of the sector. And that's why a lot of people have trouble wanting to rely on innovation -- policymakers and government leaders or the environmental activists -- because they can't get a direct line to what it is that might surface on the innovation side. If you are looking for articles published before 2016, visit the archive. But this process has had two unattractive side effects. Yet, the picture we are confronted with is different: demand for fossil fuels keeps growing. At the end of the 18th century there were fewer than 1 billion people on the planet. Fewer people go hungry. Tracy: Hello and welcome to the Energy Examined podcast. I mean, it's not that it's not possible. The future sketched out in The Bone Clocks is only fiction. Mac: Well, it's certainly right across Canada in terms of suppliers to the industry and services to the industry, employment levels. That's primarily mortgage debt. Or, even for a household, putting money into the house for repairs and maintenance, those can be at least partially explained by or looked at as investments, and you've got an enhanced asset. In terms of reducing the number of people living below the global poverty line of $1.25 (84p) a day, the post-cold war model of capitalism has been a success. Do the deep greens say, ‘Tell you what, we want to stop the boat now, we don’t want to bother with any more technical change, let’s go back to a more simple society, a more decentralised society, and one that has a smaller footprint on the planet’? But it also wants to ensure that every Indian citizen has access to electricity, and believes that can only be achieved by expanding coal power at the same time as it is expanding solar power. To Canadians. One of the challenges faced by those who wish to curtail fossil fuel use is that there is no political consensus on tackling climate change. But the economics of more, together with a rapidly rising population, have created problems unforeseen at the time of James Watt’s steam engine. That is going to require some tough decisions and some compromises. Watkins believes western governments and environmental NGOs would be better off mobilising finance for a programme of carbon capture and storage in India than offering Modi advice about the perils of climate change. In terms of reducing global poverty capitalism has been a success, but this growth has put pressure on the planet. Context: Energy Examined aims to provide an engaging insider’s perspective for the public. And so, we do have many problems, but we're making progress. Since the middle of the 18th century, there have been successive waves of technical progress: coal and steam, railways and the internal combustion engine at the end of the 19th century; the mid-20th-century age of consumer durables and commercial air travel. But the risk is now out there – and growing – because policymakers have now woken up to the risks of climate change. We want technical change, for example, to build new solar technologies. In addition to higher consumer spending, that also means higher demand for energy, the bulk of which comes from fossil fuels. The rest of the world can help poor African countries with the cost of developing renewable energy; the rest of the world can provide Africa with expensive carbon capture and storage for coal-fired power stations; or the rest of the world can do nothing and watch Africa’s carbon footprint rise rapidly as it burns dirty fossil fuels. In a conversation with Energy Examined host Tracy Larsson, energy thought leader Van Wielingen discusses why productive assets from a strong oil and gas industry are vital to counterbalance growing deficits, and why Canada needs to better support its homegrown industry in a global competition for investment capital, focusing on its strong  environmental, social and governance standards. We will have to! https://context.capp.ca › interviews › 2020 › podcast_mac-van-wielingen “Delaying action is a false economy: for every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions.” Fossil fuels are not going to disappear overnight, but the phasing-out process needs to start immediately, and that process could be hastened if governments used the opportunity provided by the recent halving of global oil prices to remove the $1tn annual subsidies for fossil fuels. We need more Barcelonas and fewer Atlantas, because that will encourage us to change the way we live: walking more, using public transport more, sharing cars, cycling. Would our politics be different? The size of the global middle class has increased, and consumers in Shanghai and Mumbai have been able to afford cars and fridge-freezers. Thatcher was no climate change denier. And with the contraction that has occurred, you can, and with ultimately, as we come out of it, you can reasonably anticipate that there's going to be a deleveraging that occurs to some extent. “The diversification of the Texas economy since the 1980s toward service-providing industries, together with greater linkages of financial and business services, likely helped insulate the Texas economy from the latest oil price drop,” the report noted. And tax initiatives are on the horizon.' But there's no long-term strategic, competitive value creation being created in doing that. I mean, I don't like to see political leaders, political leaders -- and I've said this many times in Ottawa --I say this all the time, actually, that, you know, what we want and need is for you to stand facing outward to the Canadian public with your back to the industry and facing outward and to kind-of speak with clarity and conviction and evidence and facts about the strengths and the achievements of our resource industries. I think that’s totally naive.”. This could be achieved in one of two ways: through a carbon tax, or through a cap-and-trade scheme. And even then, what most people are failing to appreciate is that the energy transition to decarbonize is going to occur over multiple decades and even multi-generational. The fossil fuel company BP helpfully provided a ready reckoner in its latest Energy Outlook report for how 2bn tonnes of CO2 emissions could be saved by 2035. And so, I'm not criticizing that. But when you look through it all and you try to parse it out, there's also no question that adverse policy, hostile politics in Canada has really hurt the industry. And it is my opinion that Canada really, on the policy side and political and policy side has really, has not been strategic. But the problem goes much further than figures such as Tony Abbott, the prime minister of Australia, or Nigel Lawson, the former UK chancellor of the exchequer, or about every Republican harbouring hopes of winning the nomination for the 2016 US presidential race. Businesses that did not expand were viewed as failures. Tracy: Well, Mac, when we're talking about investment in the industry, then, why is it so important that we turn to that? Tracy: Mac, is there anything before we wrap up our discussion that you would like to add? But what I am saying is that you have the whole entire private sector in a form of deleveraging to some extent, and then the government sector has added all this debt. Tim Jackson of the University of Surrey, author of Prosperity Without Growth, says we need fewer resource-intensive activities that damage the climate, but more of the services that improve the quality of people’s lives. Here’s How ‘Tens of thousands’ of people would be put to work immediately in high-skill jobs, say advocates. In our weekly posts, we talk about the energy industry, environmental impact, tailings management and reclamation, water management and the social and economic implications of oil sands development. The Economic Effects of a World Without Oil. Can we imagine a future that is cleaner, greener and sustainable – one that avoids climate armageddon – without abandoning the idea of growth and, thus, forcing living standards into decline? Nicholas Stern, who authored a 2006 report on the economics of climate change commissioned by then-chancellor Gordon Brown, says stopping growth misses the point. Governments are thinking about climate change, but they have other more immediate priorities: reducing unemployment, increasing living standards and, in the case of politicians rather than the technocrats running central banks, getting re-elected. The U.S. economy can take a lot of hits and keep on going because so many sectors contribute to it without any single dominant sector. Burning fossil fuels puts carbon into the atmosphere, and the overwhelming view of scientists is that this leads to a buildup of greenhouse gases that results in global warming. As of 2015, Texas is home to six of the top 50 companies on the Fortune 500 list and 51 overall (third most after New York and California). BONUS: New subscribers receive our special edition CAPP's Natural Gas and Oil Sands fact books - get the facts on economic benefits, environmental leadership, Indigenous relations and more. Gas is, of course, a fossil fuel, but it has half the emissions of coal, and we could make substantive cuts – as indeed the US has done – by making the switch. “Free markets work.”. The energy needs of a bigger and richer global population have risen sixfold in the past 50 years. But would energy policy in Canada be different if the energy region straddled Ontario and Quebec? And it's the highest in Canada of all subsectors. Fossil fuels are used to make and power mobile phones, tablets and laptops. Global temperatures have risen by almost 1C above pre-industrial levels, and the number of weather-related natural disasters has increased. They should be, but it needs to be presented that way. Outside of South Africa, coal is a small part of the power story. In the west, there was a long economic boom that lasted from the early 1990s through to the financial crash of 2007. Well, if you think about it from that perspective, then when you look at the resource industry in Canada and the oil and gas sector in Canada, you see something quite different. Within five years, the reach of the market economy had been extended to an additional 3 billion people. In reality, only the deepest greens are opposed to all forms of growth. If climate change can simply be blamed on “the Man”, on the evils of capitalism, or on a cabal of fossil fuel companies hell-bent on destroying the planet, then the solution is to take on the Man, replace capitalism with something kinder and gentler, and force the fossil fuel companies to shut down. Tracy: Thanks to everyone for tuning into another edition of Energy Examined. But there is little evidence so far that the public is wildly keen on the idea that they are becoming worse off. There was an acute shortage of fuel for tractors. 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