Protecting the Alberta economy should mean preparing for change, not denying reality
EDMONTON – The Energy Future report released last week by the Canadian Energy Regulator (CER) is an urgent wakeup call for Albertans – one which we ignore at our own peril, says the president of the Alberta Federation of Labour, Alberta’s largest worker advocacy organization.
The report models three scenarios about how global energy markets will likely evolve over the next few decades.
In two of the three scenarios – which model what would happen if the world continues to pursue the goal of net-zero emissions – global demand for oil drops by between 56 – 65 per cent by 2050, with prices collapsing to as low as $35 per barrel in 2030 and as low as $24 per barrel in 2050.
The report from the Calgary-based energy regulatory says that the erosion of global demand and prices associated with the move away from fossil fuels will lead to a collapse in production in the Canadian oil industry – with production falling to only 1.2 million barrels per day by 2050 (a decline of 76 per cent compared to current levels of production).
“As Canada’s leading oil and gas province, this is a wakeup call that we ignore at our peril,” says AFL president Gil McGowan. “The CER report makes it clear that change is bearing down on us like a freight train. We can either prepare for that change and find new ways to prosper, or we can ignore the change and get run over and left behind. Our provincial government has to stop sticking its head in the sand. Delay and denial is a recipe for disaster for our province.”
The CER report makes two other key points that are particularly significant for the political debate in Alberta:
First, it concludes that the decisions that will drive the course of global oil demand are being made by governments in places like China, India, the USA, and the European Union. They are also being made at the boardroom tables of global corporations – including the global auto industry, which is clearly betting its future on a wholesale move away from fossil fuels. The result is that political opposition in either Edmonton or Ottawa is unlikely to change the course of the global energy transition.
Second, the report concludes that the only way that Alberta and Canada can continue with “business as usual” in the oil and gas sector is if the world does nothing more than it is already doing to deal with climate change. Given rising concerns about climate-related wildfires, heat waves, floods, and ocean warming – and the many commitments to action that have been made by both governments and corporations – this is a highly unlikely outcome.
“Increasingly, our provincial government here in Alberta is looking like an angry old man shaking his fist at the clouds to stop the rain,” says McGowan. “We have a government that continues to deny change, when what we really need is a government that’s committed to managing change.”
“The good news is that the future doesn’t have to be disastrous for Alberta,” concludes McGowan. “The AFL and our unions in energy, construction and manufacturing released a report last fall showing that 200,000 jobs could be created if we seize opportunities to pivot towards opportunities in the lower carbon economy. Similar plans have been released by Alberta business groups and by the federal government. It’s time for Alberta’s political class, including both the UCP and the NDP, to stop pretending that our future will be like our past. If they really want to defend the Alberta economy and Alberta workers, they need to stop denying the new realities and focus, instead, on turning those realities into opportunities.”
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Director of Communications, AFL