Runaway Future

14.2.2012

The balance

Filed under: The Daily Grind — forbes @ 3:05

Tonight on the Colbert Report, the guest was Bill McKibben. He’s a noted environmentalist who has made waves with his organization 350.org, a grass-roots anti-climate change initiative. One of his major recent projects has been working to stop the Keystone XL Pipeline project that would connect the oil sands developments in Alberta with the refineries and distribution networks of the United States, namely along the Gulf Coast region.

In discussing this project with Colbert, McKibben repeats the oft-mentioned fact that due to the oil sands, Canada has, in its hands, the second largest oil deposit in the world after Saudi Arabia (a bit of a disputed fact considering the struggles to be able to recover it, the number could be as much as eight times higher, but that’s neither here nor there).

Anyway, I knew all this before and I wasn’t really sure what to think about it (besides knowing that a lot of people from this region (including many that I know) have travelled to Alberta to work in Fort Mac or elsewhere on these projects). Tonight, it kind of hit me. McKibben is advocating that the oil in those sands would be best served to stay there, that the environmental impact is too great to recover it and to transport it to the States and that it only serves to continue to fuel the world’s addiction to oil.

I’m in no place to disagree, because I think he clearly knows better than I do. But I wonder if Canada can afford to even consider that.

It’s a bit of an environmental balance: rising oil and gas prices are a “good” thing environmentally, as they may change the way an average consumer uses these products in their day-to-day life, whether it’s buying a more fuel-economical car or opting to take public transportation more often. Meanwhile, rising oil and gas prices are a “bad” thing economically as consumers have to spend more of their hard earned money on these products and there is the related trickle-down effect that sees rising costs in almost all other products that have to be shipped/manufactured/delivered and the related rise in the cost of living.

The same balance is in place for Canada. The export of energy products makes up almost 3% of our Gross Domestic Product. Canada is firmly in the top 10 countries in the world in GDP and our natural resources (of which the oil and gas sector is a huge part of) has a lot to do with that success. It makes political sense that a government would do well to keep those economic fires burning bright (and in doing so ignore environmental concerns to capitalize on these natural resources) and it is no surprise that the current sitting government was elected due to a power base in Western Canada where this oil boom is centred.  Any rise on oil prices just opens up the door for more money to be made, a simple supply and demand with the whole world demanding and the supply continuing to dwindle down.

I truthfully don’t know where I stand on this (in typical fashion, I see both sides of this equation), but I wonder if by embracing a more environmentally conscious approach, does Canada shoot itself in the foot economically, the same way they would be hurting their environment irreparably they take a purely economical-minded stance?

The answer is the same reason I don’t know where I stand on this: it appears to me to be a no win scenario. Always sacrificing one thing to achieve something else.

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