Why Canada needs a green national energy program instead of corporate welfare for the oil and gas sector
Forty years ago, Pierre Trudeau thought it would be wise for Canada to achieve “energy independence”, a project he aimed to accomplish within a decade.
The National Energy Program was not created in a vacuum. The two oil crises of the 1970s disrupted the global economy as much as that of Canada, but they also revealed a particular aspect of the Canadian economy: we were both rich in oil and suffering from the spillover effects of the oil shortage.
Fortunes were being made in Alberta as most of the Canadian population faced soaring prices, inflation and double-digit unemployment. Canada’s oil and gas resources were already managed and controlled by a national oil policy and agreements between the federal government and the energy-producing provinces. This has been the case since the Leduc Discovery of 1947.
But the oil crises made it clear that past policies – designed primarily to provide a modest level of aid to the private sector – were inadequate. A new program was needed to make Canada both energy self-sufficient and efficient.
Now, as Trudeau the Younger grapples with the climate emergency, there are good reasons to re-examine the underlying philosophy of the NEP, as much as to consider the possibility of a new national energy program to drive the transition from fossil fuels.
The 1973-74 oil crisis provided sensible solutions to shared national supply problems: a vertically integrated national oil company – Petro-Canada – responsible for exploration, research and development, refining and production. retail. The government also instituted price controls and, to bolster domestic production, invested the equivalent of about $ 10 billion in Syncrude to prevent the collapse of the project, according to a 1975 New York Times report.
Despite these efforts, national and global challenges developed at the end of the decade, which led to the creation of the NEP. In the 18 months before the introduction of the NEP in late October 1980, Canada held two federal elections, survived the first Quebec referendum, and entered the worst recession (at the time) since World War II . The global recession was triggered by the oil shock of 1979, itself a consequence of the Iranian revolution.
To make matters worse, the Soviet Union had invaded and occupied Afghanistan, while Saddam Hussein tried to do the same with Iran. These events further destabilized the region, limiting the industrialized world’s access to cheap oil and further exacerbating global economic disruption.
Energy sovereignty should not be confused with economic protectionism – it was not just a âbuy Canadianâ plan. As then-premier of Alberta Peter Lougheed said at a 1975 first ministers’ conference on energy: “…”
Remarkably, Lougheed and Trudeau the Elder were in fact on the same page on the issue of higher energy prices if it meant that Canadians and the national economy could be shielded from major disruptions that were entirely foreign.
The climate emergency presents a new type of challenge that requires a similar strategy of regulation, price control and development of renewable energy sources and a national distribution network. Although oil and gas resources appear to be plentiful, a kind of green energy shortage is emerging and citizens are pushing to abandon non-renewable energy sources through efforts at divestment, consumption choices and savings. activism, further contributing to a) energy shortage.
It’s not that we can’t get it, it’s that we don’t want it, and furthermore we know that continued extraction and consumption of fossil fuels will only exacerbate the climate emergency, which in turn means continued – and worsening – economic disruption. .
The underlying philosophy of PEN boiled down to the realization that energy is more of a strategic necessity than just a provincial commodity, and therefore should be organized to benefit all Canadians. The climate emergency only underscores this fact: the urgency to move away from non-renewable energy sources is equal to the urgency to develop their sustainable substitutes.
As it turns out, the original PEN included a number of provisions aimed at making all of Canada both more energy efficient and self-sufficient. As Finance Minister Allan MacEachen said in the budget speech that introduced the PEN: âThere are a number of other federal initiatives that will help both individuals and industry meet Canada’s energy goals. For example, there will be grants available to help homeowners switch from oil to natural gas, electricity, and other fuels that are more available to us. “
The PEN included provisions for retrofitting house insulation (to increase heating efficiency); setting new energy efficiency standards for homes, appliances, buildings and automobiles; as well as federal funding for renewable energy projects. Some of this was accomplished (though never quite at the level needed) before the oil glut and the deregulation fashion of the 1980s torpedoed NEP and the logic behind it.
What we have today is the opposite of NEP: unconditional corporate welfare for the oil and gas industry, which is completely at the mercy of US energy policy and global market volatility. Rather than having energy autonomy and a source of funding for a green transition, Canadian taxpayers are now directly subsidizing the climate catastrophe. Doing the exact opposite of making the industry work for people has resulted in the worst possible outcome. Who would have thought?
The thinking of Trudeau the Elder contrasts sharply with that of Trudeau the Younger. Four decades after the energy-producing provinces ratified the PEN, Canada now provides tens of billions of taxpayer dollars each year to a predominantly foreign industry that has no accountability to Canada and is actively pushing us into a position increasing economic and environmental instability. (A recent report indicates that foreign ownership can reach 70 percent.)
In his frankest moments, such as at a recent conference at the Wilson Center before the âThree Amigosâ summit, Trudeau displayed an almost characteristic inconsistency when he said, âWe are going to keep producing oil. and gas for years to come. . I’m not going to weigh in on what the United States does or doesn’t do, but people have to walk the path of climate change. “
Indeed. A recent report released by Environmental Defense Canada and Oil Change International found not only that Canada provides the largest amount of government subsidies to the oil and gas sector (among G20 countries), but that the industry has plans to expansion that will make it impossible for Canada to meet the goals of the Paris Agreement.
Achieving the goals of the Paris Agreement of avoiding total disaster requires the immediate elimination of all fossil fuels and their replacement with a new national energy program based on renewable sources. A green PEN should take control of all available sustainable and renewable energy resources, develop a national distribution system, invest profits in expansion, exploration, research and development, and seek to make Canada “energetic.” independent âmainly as a means of facing forecasts of future economic crises linked to both the ongoing climate crisis and theâ oil terminal â.
If you take oil and gas out of NEP, it is a model for energy independence and sustainability, something we need as much today as it was 40 years ago. The ultimate lesson of the NEP is not to allow special interest groups to hinder nation-building projects whose ultimate goal benefits the many rather than the few. We have given our oil and gas sector everything it could want, including public subsidies, public lands and public infrastructure. The sector has not brought us closer to energy independence, nor to a green transition. It is high time to turn off the taps.