Some have openly suggested that oil sands producers should be allowed to significantly increase their greenhouse gas emissions, even if that means forcing other sectors to take on additional expensive obligations to meet Canada's target.
One has to hand it to plain spoken oil sands CEO Marcel Coutu, who had the temerity to openly state what the federal government and other oil industry executives are far too discrete to utter publicly.
The Globe and Mail reported that Mr. Coutu believes "Alberta's oil sands producers should be allowed to significantly increase their greenhouse gas emissions, even if that means forcing other sectors to take on additional expensive obligations to meet Canada's climate change targets." In the same October 15 Globe and Mail story Mr. Coutu is quoted as stating that "what we have to do is prioritize what is most important to the economy and our quality of life. At the end of the day I don't think there is a single element of our economy that is more important than energy."
Mr. Coutu's belief in the primacy of the oil sands over all other sectors of the economy is characteristic of a mindset typically found in a petrostate. There are several milestones on a nation's path to earning the dubious moniker of petrostate. As the Copenhagen climate summit commences it is becoming apparent that Canada may already be well down that road.
A petrostate has several distinguishing features, including the neglect of non-petroleum based sectors of the economy, the accretion of power in the hands of those from the petroleum producing regions and sectors, and the crowding out of other, alternative points of view.
The current federal government, both in its words and with its actions, has shown a strong predilection for the petroleum sector. Going into Copenhagen the government has hewn to a line more consistent with that of an OPEC nation than with a modern western democracy. Canada's hard line vis-à-vis developing countries, where per capita emissions are only a tiny fraction of our own and many earn under $2 a day, is the most public manifestation of this. The Prime Minister's desire to be anywhere but in Copenhagen this December is palpable. This government really doesn't like the climate change issue and treats it like a minor but persistent nuisance rather than an issue warranting careful statecraft.
Perhaps the most devastating aspect of a petrostate is the economic effect on the currency which, in the instance of Canada, is essentially becoming a petrodollar. The term coined for this economic malady is "Dutch disease" named after the economic crisis that afflicted the Netherlands when large natural gas deposits were discovered in the North Sea. The Canadian dollar, as was the case with the Dutch guilder, has appreciated precipitously due to the enormous influx of foreign currency associated with unchecked oil sands development. The sky-high dollar, inflated out of all proportion to Canada's underlying economic fundamentals, is choking off the manufacturing sector in Central Canada and elsewhere.
What never ceases to amaze me is that government MPs from Ontario and Quebec quietly tolerate the damage to the manufacturing sector at the alter of hyper-growth in the oil sands.
Interestingly Norway, which exports the same volume of oil as Canada, has avoided becoming a petrostate. Norway has deliberately and aggressively diversified its economy through an oil revenue "stabilization fund" that currently stands at $400 billion.
The renewable energy sector is perhaps the very antithesis of the petroleum industry, for reasons that are self evident. It is not entirely surprising then that the federal government has allowed the EcoENERGY Renewable Power Program (eRPP) to die. After at least a century of oil subsidies (many of which still exist) the nascent renewable energy sector was cut loose. The money, while not trivial, was a relatively modest amount that is still needed in many regions of the country. There's little doubt that the cost alone was not the key factor in the decision to kill the eRPP. It was done at precisely the same moment that $1 billion in federal subsidies was earmarked for the deep-pocketed oil sector for carbon capture and storage. To cut the eRPP without a replacement, other than vague promises of a pending carbon price, leaves a gap for global investors of several years. In the world of capital investment this may as well be a century. This sends, and is undoubtedly intended to do so, a powerful signal to investors that renewable energy is about as welcome in Canada as a hydro dam in Saudi Arabia.
Finally the crowding out of other points of view and stifling of debate is also a hallmark of a petrostate. Perhaps the most recent example of this phenomenon occurred on the heels of the release in October of the Suzuki/Pembina 2020 report, which looked at the regional economic impacts of addressing climate change. The response from the petroleum sector's allies in politics and the media was striking for its vitriol and also its absurdity. For instance, John Ivison recounts in his October 29 column that unnamed Conservative sources suggested that the study's funder may experience retribution from the federal government for its mere involvement with the report. It appears one cannot have a debate in this country about the regional implications of addressing climate change without attracting the enmity of powerful petro interests. This is an example of the ugly underside of living in a petrostate.
So as Canada goes into the Copenhagen negotiations, it should come as no surprise that its widely reported negotiating tactics are perhaps more consistent with those of a petrostate than a modern western democracy.
_Pierre Sadik is the manager of government affairs of the David Suzuki Foundation. The opinions expressed are his own.
This column first appeared in The Hill Times._