In the Chamber -- Grant Mitchell's Blog

Envisioning a national energy strategy

Posted 12/19/2012 by Grant Mitchell

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Canada not only needs a national energy strategy, we need it very urgently. Here are some thoughts about what one might look like.

There are huge energy and environmental challenges facing this country. First, Canada has one export market for oil and gas, the U.S. And the U.S is very likely to be self-sufficient in both in5 to 10 to 20 years. We also need pipelines to reach diversified international markets.

Secondly, climate change is a real and very serious problem. The risks in climate change are literally infinite. Ask the residents of New York City, or the people who used to work in Canada's east and west coast fisheries, or the people of the north. Witness the surge of inexplicable drought and floods across our farming economy.

And, history tells us in Canada that challenges of this magnitude are not going to be solved by 10 provinces and 3 territories working as silos, and the private sector working without certainty. There is a profound need for a national energy (and climate change) strategy and it begs for national leadership. There is simply a vacuum of national leadership. Prime Minister Harper is missing in action.

To kick-start a national energy strategy, real leadership would embrace and promote an understanding of several economic realities:

1.  The Gateway and Keystone XL proposals have taught us that projects of this kind are never going to be built unless they earn the social license to do so. And they are not going to get that social license unless we can demonstrate real credibility on the environment, especially on climate change. We have to show real progress on greenhouse gas emission reductions. Not just rhetoric and spin.

2.  Dealing with climate change will not hurt the economy. You want to hurt the economy? Just keep doing what we are doing - ignoring climate change action. Canada restructured our economy to win WWII and it did not hurt the economy - it kick-started a powerful western industrialized economy that has sustained one of the highest standards of living in the world for the past 60 years.

3. Just because renewable energy isn't economic today doesn't mean that it won't be economic tomorrow. A few years ago the oil sands were making a barrel of oil for $25 and selling it for only $10. That certainly wasn't economic, but things seemed to work out. Why? Because there was a vision that with economies of scale, technology development, and market and price changes, the oil sands would become a driving force of our economy. Why are the Conservatives so squeamish about applying that thinking to renewable energy?

4. The ideological obsession against government partnership with the private sector is just plain stupid. Once again, the oil sands got kick-started because the federal government took a 12% equity position in Syncrude. Why so squeamish about government involvement when it comes to renewable/alternative energy - oil sands in its early days were the ultimate alternative energy.

What specifically should go into a national energy strategy? In addition to seeing the Prime Minister meeting with Premiers and a structured national discussion, a national energy strategy should include:

1. A price on carbon. The Senate Committee on Energy and the Environment committee (of which I am the Vice Chair) heard from 250 witnesses in its 3 year study of national energy strategy.  Even industry witnesses who appeared before the committee consistently called for a price and none called for regulation.  Regulation ultimately prices carbon in the most expensive way but can easily be manipulated by a government that does not really want to deal with GHG emissions and climate change.

2. A strong and significant commitment to the development of renewable energy. Renewable energy means jobs, investment, new markets, technological innovation and creativity, as well as reduced GHG emissions.

3. Rehabilitation of the electricity grid and in particular a concerted effort to "smarten it up." This is critical for efficient use of electricity and for the development of solar energy.

4. A focus on energy self-sufficiency.  Imagine what an economic advantage that would be for Canadian business and for generating international business interest in investing here.

5. Serious consideration of a West to East pipeline. It is interesting how Harper says that the Keystone is a no-brainer because our "ethical and secure" oil should replace the unethical and insecure oil the US buys from questionable sources. Well, where does Mr. Harper think that the Maritimes and Quebec buy their oil? Why is he not doing something about that problem? What about some leadership on that?  Mr. Oliver says that the Conservatives would never subsidize a pipeline. Well, what makes him think it would take subsidies; maybe it would just take leadership.

6. A focus on distributed energy development as a way to support and sustain rural communities and farmers.  Wind, solar, tidal, run of river and biomass energy are largely rural and provide jobs to small communities in a way that a massive coal fired electricity plant simply does not.

7. Stop attacking environmental groups. In fact, embrace them. Say repeatedly that the input of environmental groups allows us to do our energy strategy much better and enables us to get the social license to develop it. Embrace environment. Witness the forestry industry's approach in the 1990's when overwhelmed by the same kind of problems facing the energy industry today.

8. Focus on carbon capture and storage. It is essential that we perfect this technology. The world needs it and we can sell it to the world.

9. Develop a national labour strategy to support our traditional and renewable energy industries.

10. Coordinate research and development initiatives across the country in a way that supports energy and conservation technologies that reduce greenhouse emissions.

11. Consider that every solution to climate change is criticized by someone, either by industry or environmental groups. CCS is too expensive, nuclear is too dangerous, wind makes people sick, solar is not economic, hydro destroys habitat, etc. Well, we cannot wait for perfect solutions. We are running out of time and have to act.

Conclusion:

 If I seem a bit frustrated, it is because I am. There are huge challenges here, but there truly are great opportunities. If we do this right, we can unleash a new level of inspiration, creativity, entrepreneurship that will create a remarkable 21st century, sustainable economy, the envy of the world.  We just need the leadership and focus to get it done. And, this kind of leadership is absolutely alien to the Conservatives.

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