Thursday, 29 October 2015

For the Love of Driving - North American's Appetite for Gasoline

By: Gordon Jaremko

A long-time observer of the Canadian oil and gas industry and the political structures that govern it, Gordon Jaremko has been, at various times, an author, an editor of Oilweek, a national correspondent based in Ottawa, a provincial political pundit based in Edmonton and a daily business reporter in both Calgary and Edmonton. Gordon was introduced into the Canadian Petroluem Hall of Fame in September. 

Article originally published in the November 2015 issue of Oilweek. Can be viewed online with a subscription: 

With a keen appetite for oil-burning mobility, consumers spend more on driving than eating

The nation’s largest refinery responds to markets. Consumer behaviour across Canada and the U.S. says Irving Oil made a winning bet this fall by spending $200 million on the giant plant in its hometown of Saint John, New Brunswick.

The firm’s Operation Falcon employs nearly 3,000 workers for 60 days on turnaround maintenance to keep production going at 320,000-bbl/d pace that yields 75 per cent of Canadian gasoline exports.

The big refinery job overlaps with the annual global festival of concern over burning fossil fuels: the 2015 World Climate Summit, which will be hosted in Paris, November 30 to December 11, by the United Nations Framework Convention on Climate Change.

The eco-assembly whips up torrents of publicity by drawing a pack of officials, observers and news media that is at least as big as the labour force raised by Irving. But both crowds are small compared to daily activity on Canadian and American roads. 

Big Oil, including 91-year-old Irving, grew up on mass desire that shows no sign of fading away. Fossil fuels satisfy a fourth public need - mobility - that the auto-industrial age added to the ancient essentials of food, clothing, and shelter.

Mobility still overwhelmingly means cars and trucks with internal combustion engines despite decades of sermons on the eco-virtues of public transit, electric vehicles, bicycles and walking, according to data kept by Statistics Canada and its American counterparts.

The number of motor vehicles registered to travel on Canadian roads hit 23.6 million in 2014 and kept growing as 2015 shaped up as a fine sales year for the auto industry.

The national motor pool has 0.9 vehicles for every Canadian old enough to have a driver’s license or learning permit, or 70 per cent of the population of 35.7 million.

The love of cars, sport utility coaches, minivans and light trucks is slightly stronger in the U.S. where 250 million registered work out to 1.2 vehicles for everyone in the 66 per cent of the national population of 321 million that is old enough to drive.

During good economic times, when consumers have enough confidence in their livelihoods to give their tastes free rein, Canadians spend more to drive than eat.

“Retail sales grew 4.6 per cent in 2014, the highest annual growth rate since 2010,” Statistics Canada reported this summer. 

“Food and motor vehicles continue to account for the largest shares of retail spending. For the first time since 2007, the share of retail spending for new and used vehicles, 17.5 percent, was slightly higher than that of food at 17.4 per cent. The percentage of the retail dollar spent on new and used vehicles has been steadily climbing since its all-time low of 14.8 per cent in 2009, while the portion spent on food has remained relatively unchanged since 2011.”

In the U.S., California Governor Jerry Brown and Democrat state senators from affluent constituencies dropped a legislative proposal to enforce a 50 per cent cut in petroleum use by 2030. The decision was attribute to industry advocacy and representatives of struggling regions in the lower state assembly house. Economic realism prevailed over eco-idealism.

Manufacturers are still testing market interest in zero-emission alternative vehicles by trying to find enough potential buyers to justify investing in factory production lines. Harley-Davidson, for instance, this summer dispatched a semi-trailer of prototype electric motorcycles on a road show across Canada called Project LiveWire. 

Zero-emission Harley’s retain the brand’s image of strength. The environmental bike is a husky black powerhouse. The electric drive train replaces the fossil-fuel-era motorcycle roar with a stimulating whir that fans liken to a muffled jet turbine.

Marketers who led supervised test rides said the new bike would only be for sale at an as-yet-undisclosed future date after further refinement. The current version  runs for two hours. Fully recharging the battery takes three hours. The target price range is US$30,000. Evolution of the production version will be rider-led, says the company.

Big Oil is no slouch at feeling out markets and adapting to trends.

Irving stayed on top by leading the refinery pack into the introduction of unleaded fuel in 1977. In 2000, a $1-billion plant overhaul purged sulphur out of the Saint John plant’s product years ahead of requirements. The investment enabled the expansion of exports to California, the most strictly regulated state. 

Innovation continues. Imperial Oil has told its shareholders that a bitumen separation process introduced at its new Kearl mine cuts oilsands carbon emissions to the average for all types of oil production.

Clean industry initiatives act on an insight with a long pedigree in Alberta. Pollution control is not just a cost – it also pays. Peter Lougheed gave the idea official stature when the former Conservative regime was young and introducing environmental measures from beverage container recycling to mandatory mine reclamation.

“In the area of environment, my interest had been at first simply the balance between development of resources and maintaining the quality of life,” Lougheed told the legislature in a budget debate during his first term as premier in 1971.

“The rather enthusiastic minister of environment [Bill Turko, the first Tory to hold the cabinet portfolio] had brought in a new factor in this equation. It’s a fascinating factor. It links free enterprise and job development with environmental control,” Lougheed said.

“When you’re prepared to move forward and be doers and press on, administrative problems will get ironed out fully to the satisfaction of our people and end up in a very meaningful way with not just better quality of life but a lot of people very usefully employed.”

Tuesday, 27 October 2015

Canada - A New Path?

By: Mike Doyle, President, CAGC

2015 November Recorder article. Can also be found here:   

Let’s talk about Canada’s economy. The commodities boom, which had shielded Canada from the worst effects of the global financial crisis, has ended, revealing economic malaise. GDP and productivity have been growing at a plodding pace, firms do not innovate enough and infrastructure is overburdened. Consumer debt and house prices are very high. Business investment and exports have yet to take over from indebted consumers as motors of economic growth. Prairie conservatism has been replaced with power shifting back to central Canada. Can manufacturing come back? Will embarking on a new path move us forward to a better place? The Trans-Pacific Partnership (TPP), a legacy from the previous government, may yet survive under the new regime. However trade agreements always come with winners and losers and each country has to balance such internal issues. The Economist provides some broader perspectives as follows:

The Economist - Oct 10, 2015 - Every Silver Lining has a Cloud

Until this week, the world had not seen a big multilateral trade pact for over 20 years. The deal that has broken the drought—the Trans-Pacific Partnership (TPP), which comprises 12 countries in Asia and the Americas, including the United States and Japan—is welcome. But those who believe in free trade, and the benefits it brings, ought not to miss the bigger picture. The backdrop to this week’s deal is a bleak one.

First, the pact itself. It has flaws—what compromise doesn’t?—but the advantages are greater. The negotiators who brokered the agreement in Atlanta did not just lower tariffs in coddled sectors such as agriculture, but also drew up shared rules on everything from visas for business travellers to competition policy. The deal limits veiled forms of protectionism, such as special treatment of state-owned firms and arbitrary import bans after safety scares. The benefits of such steps are hard to quantify, especially as the fine print of the deal has not yet been released, but the most comprehensive assessment thus far reckons they could boost the GDP of its members by 1% by 2025. The impact on emerging-market signatories to the deal is likely to be by far the biggest.

Viewed from a different angle, however, the tale of TPP tells a different story. First, there is the fact that the agreement has been so hard to sell in America. It took months, and several legislative setbacks, before Barack Obama won the authority to fast-track a congressional vote on TPP. The deal may still be voted down, in America or elsewhere. Those who would succeed Mr Obama as president know that TPP holds few votes. This week Hillary Clinton, the Democratic front-runner and once a promoter of TPP, came out against it. The beneficiaries of TPP—consumers, as well as exporters—are numerous, but their potential gains diffuse. By contrast, inefficient firms and farms, about to be exposed to greater foreign competition, are obvious and vocal. Canada, for example, limited the threat to its dairy farmers and doled out a big new subsidy. The saga is a reminder of how hard free trade is to champion.

Second, the TPP deal underscores the shift away from global agreements. The World Trade Organisation, which is responsible for global deals, has been trying, and largely failing, to negotiate one since 2001. Reaching agreement among its 161 members, especially now that average tariffs around the world are relatively low and talks are focused on more contentious obstacles to trade, has proved almost impossible. Regional deals are the next best thing, but, by definition, they exclude some countries, and so may steer custom away from the most efficient producer. In the case of TPP, the glaring outcast is China, the linchpin of most global supply chains.

Third, good news on TPP stands in contrast to bad news elsewhere. Cross-border trade today is as much about the exchange of data as it is the flow of goods and services: this week saw the annulment by a European court of a deal that had enabled American firms to transfer customer data across the Atlantic. Conventional trade faces even stronger headwinds. The volume of goods shipped in the first half of this year was just 1.9% higher than in the same period of 2014, far below its long-term average growth of 5%. This reflects not only China’s soggy demand for imports—a threat to the developing economies that supply it—but also the accumulation of minor measures that silt up global trade.

Deals like TPP are the most effective way to reverse this sorry trend, by reducing tariffs and other obstacles to trade. Optimists hope it can now be expanded, to include China and others. Sadly, experience suggests that will be hard.   

The Economist - Aug 29, 2015 - The new rustbelt - The puzzling weakness of manufacturing

If you visit south-western Ontario and the Niagara peninsula you will see scenes of industrial decay. Steel mills, vehicle-parts factories and food processors sit abandoned, their car parks studded with tufts of grass. The region has the look of a rustbelt, and that has Canadians worried.

Manufacturing took a beating in the late 2000s and early 2010s, when high oil prices drove up the value of the Canadian dollar, making factories less competitive. But Canada should now be recovering from that bout of Dutch disease. The “loonie”, as Canadians call their currency, has been dropping along with oil prices. On August 25th it fell to its lowest level in a decade against the American dollar. That, plus the strong economy in the United States, the market for three-quarters of Canada’s exports, should have scraped off much of the rust.

So far it has not. Factory sales rose 1.2% in June, but were 3.1% below their level of a year earlier. The failure of manufacturing to respond to the tonic of a weaker currency is one reason why the economy probably contracted during the first half of 2015.

Now Canadians are starting to suspect that much of what they lost may never come back. In 2000 manufacturing accounted for 18% of GDP, not much lower than the share in Germany; by 2013 that had dropped to 10%, about the level in Britain and the United States. Factory employment has fallen by about 500,000 since 2005, to 1.7m. In the decade to 2012, some 20,000 factories shut down.  

One big problem is that Canada mostly makes components, not final products. That leaves manufacturers vulnerable when their customers move. Car-parts makers used to be well-placed for deliveries to carmakers in Michigan, but many of their customers have moved south.

Another reason the loonie’s decline did not help more is that the currencies of competitor countries have also fallen. And industry has been hurt by the rising cost of inputs, often priced in American dollars, and by higher electricity prices, especially in Ontario. Canada’s high wages are another burden.

The candidates in Canada’s national election, to be held on October 19th, have so far had little to say about manufacturing’s listlessness. In part, that may be because there is not much that government can do. Harmonising regulations and easing border crossings with the United States would help. Some companies are helping themselves by investing heavily in new machinery and technology, hoping to make higher-value-added products. Manufacturing in Canada will not disappear. Neither, sadly, will the rust.

Canada’s strength lies in its diversity, its geographic vastness, and its resources. The same fundamentals make up our challenges as we begin to try to transition ourselves and our economy in a new direction. The future will be interesting.

From The Thursday File

Avoid popularity; it has many snares, and no real benefit.

William Penn

Thursday, 22 October 2015

What does it take to backstop electricity generation from renewables?

By: Josie Le Blond

Article originally published in European Energy by the Financial Times on October 13, 2015. It can be found here:  

Germany has long led the way in global green energy innovation. But ahead of UN climate talks this December, some say the country’s new reliance on coal means it has lost the moral high ground on emissions.

Europe’s leading economy still flaunts its virtuous climate track-record abroad. It was on show during recent state visits by Angela Merkel, the chancellor, to Brazil and India, two of the world’s biggest greenhouse gas emitters.

Yet back at home, observers warn Germany’s powerful coal lobby is frittering away the nation’s reputation as a green Wunderkind.

“The coal problem must be solved if Germany wants to be celebrated once again as a leading voice on climate change,” says Claudia Kemfert, head of the energy, transportation and environment department at the German institute for economic research.

Germany’s dilemma dates back to its pledge to shift from nuclear power to other forms of renewable energy following Japan’s Fukushima disaster. The nuclear phase-out has resulted in the country falling back on one of the most polluting forms of fuel, coal. This goes against the grain of Germany’s Energiewende, part of the intention of which is to cut the use of fossil fuels.

Panicked by the disaster in Japan, German politicians began shutting down the country’s oldest nuclear plants in 2011, with a view to going completely uranium-free by 2022. The plan is for renewables eventually to take centre stage in Germany’s energy mix. However, coal, in particular carbon-intensive lignite, has been filling the gap.

Germany generated 44 per cent of its electricity from coal last year, more than any other EU member state. That compares with 26 per cent from renewables and 16 per cent from its eight remaining nuclear plants. This coal renaissance is undermining the government’s efforts to reduce greenhouse gas emissions and casting doubt on Germany’s green credentials. In 2013, German emissions rose by 1.2 per cent, defying a decade-long downward trend.

“In Germany we’re living with a paradox resulting from the energy transition,” says Ms Kemfert. On the one hand, the country is investing in renewable energy helping to bring emissions down, while on the other the increased use of coal acts to force them up.

Germany now looks set to miss its voluntary target of a 40 per cent reduction in emissions on 1990 levels by 2020. Ministers point out Germany has already met its binding Kyoto target of a 20 per cent reduction. However, that achievement predates the decision to abandon nuclear.

Even before the recent Volkswagen emissions scandal sent Germany into a flurry of soul-searching, policymakers were desperately looking for ways forward to meet the 40 per cent target and re-establishing the country at the top of the international pecking order on climate change.

But Ms Merkel’s government had not reckoned with the power of the coal lobby. Plans this year to slap a levy on emissions from the dirtiest plants powered by lignite had to be abandoned after they met opposition from industry, unions and local politicians.

This coalition, led by RWE, Germany’s second biggest power provider and the operator of most of the country’s lignite plants, said the levy would threaten 100,000 jobs in industrial regions and would push up costs to industry and consumers.

Talks in July led to a compromise. Sigmar Gabriel, Germany’s energy minister, promised to compensate RWE and others for gradually retiring a number of the oldest lignite plants as “reserve capacity”.

“Since our plans affect many jobs, we altered course,” the energy minister said.

The compromise demonstrates the kind of tensions that exist between Germany’s coal-dependent energy providers and the state’s declared environmental goals. Politicians in Germany and beyond, however, need eventually to resolve such tensions in order to achieve a carbon-neutral economy by the end of the century — a goal activists hope will be accepted for all countries in a binding agreement at the December climate talks in Paris.

As Barbara Hendricks, German environment minister, said last month: Germans “cannot go around heralding the climate neutral global economy and at the same time act as if that does not apply to the coal regions in our own country”.

Wednesday, 21 October 2015

Maintaining a fair society while protecting the environment

By: Resource Works

Originally posted Resource Works' blog on June 27, 2015 and can be found here:   

Five insights into the benefits derived from our interaction with natural resources and how they are distributed

Without natural resources, we'd be naked – and we mean that in a literal as well as a figurative sense. 
Resource Works has taken this fundamental observation to heart and become British Columbia's only non-profit asking the toughest question of all: how do we humans maintain a fair society with opportunities for all while also protecting the environment?
So it's essential to build healthy dialogue about what exact benefits come from our interaction with natural resources and how those benefits are distributed.
Here are five insights we've developed since the launch of Resource Works in April 2014:
1. Productive public dialogue is the key to BC's natural resources future
Resource Works recognizes the demand of British Columbians for both economic growth and environmental sustainability. Breaking the ice in the controversial resource debate, through research and respectful dialogue, is the way we have chosen to move forward. We wanted to start by listening to people, so in late 2014 we held community conversations in eight municipalities in the Greater Vancouver Region. More than 120 participants came out to share their views – interested citizens, those involved in local government, business people, and environmentalists. This was a necessary first step towards a better conversation about BC's sustainable future. Our Community Conversations project report was how we shared the story. 
2. An indispensable component of BC's economy
Natural resources contributed 12.8% of BC's total GDP (direct), and grew faster than any other sectors. Even as the broad provincial economy grows and diversifies, resources remain a major employer and a powerful driver of new jobs. Our economists found, in the influential High Impact study, that 10 per cent growth in the resource sector means 29,600 new jobs in British Columbia, more than half in the Lower Mainland. (2013 data)
3. A significant government revenue generator
Natural resources accounted for close to $2.5 billion in BC government revenues in 2003. We figure that's enough to pay 22,727 family doctors – quite a feat, one unmatched by other industries. Not only does resource extraction generate royalties; tax revenues that flow from these activities is something that governments would have a hard time doing without.
4. A driver of innovation
Numerous companies based in British Columbia are at the intersection of resources and innovation. Twenty-seven per cent of Canadian research and development in mining and oil & gas extraction occurred in BC, with a range of initiatives focused on sustainability and work safety. We will be conducting further work on this in future.
5. Closely linked to the green economy – at home and globally too
Most people – over 70 per cent according to a study we commissioned from Ipsos – believe that green job growth is possible within BC's natural resource sector. As renewable energy's mix in global power supply increases, BC's exports of copper, metallurgical coal, and forestry provides the basic material to build solar plants, wind farms, and wood-frame green-buildings. 
With such an immense impact on daily lives, you'd expect issues concerning natural resources and their use to be front and centre in any public conversation. Yet, too often, we are not hearing a balanced range of facts that will enable us to provide the things we require for our families in a society with growing needs – including the basics like food, shelter, and transportation.
Resource Works is committed to providing authenticated facts to help ensure that when we do have these broad conversations, they are ones that can confidently be based on sound information.

Friday, 16 October 2015

Oil & gas industry critics misunderstand GDP breakdowns

By: Peter Radevski

Article originally published by the BOE Report on October 9th, 2015, and can be found here: 

Central Alberta Drilling Rig

With Canada’s election cycle heating up, and little more than a week to go, it should not be surprising that some very questionably presented figures have been thrown around by industry detractors. A particularly egregious example of this is a figure that has been making its rounds in the past few months, namely that the oil sands contribute “only 2 per cent [to] the national GDP.”
As a preliminary matter, it makes very little sense to include only the oil sands’ share, unless the goal is to further minimize the oil & gas industry’s overall importance to the economy.
The 2% figure is attributed to Statistics Canada (StatsCan). There is no cause here to dispute the accuracy of the raw statistic itself, but statistics without context are notoriously misleading. StatsCan’s own breakdown of 2012 GDP pegs oil & gas extraction – including oil sands – at 3.31% of GDP on average for that year.
Additionally, industry groupings are arbitrary and tend to obscure the links between different sectors. For example, oil & gas extraction is intimately tied to the generation, transmission, and distribution of electric power. It is similarly tied to natural gas distribution and petrochemicals refining. Further, there is substantial overlap between oil & gas and construction, retail, and professional services. Taking into account these overlaps and linkages, oil & gas’ share of GDP could be as high as 7.5%.
That said, it is prudent to use StatsCan’s more conservative 3.31% figure.
It helps to understand how this figure compares to other high-profile sectors of the economy. StatsCan averages aerospace at 0.55% of 2012 GDP. The auto industry’s share is 2.29%. Both trail oil & gas, significantly.
It is common knowledge that Canada, like all developed economies, is a service economy. Consequently, StatsCan averages the wholesale and retail sectors at 5.62% and 6.12% of 2012 GDP, respectively. Professional, scientific, and technical services – which includes lawyers, accountants, IT specialists, architects, and engineers, among other professionals – comprises 4.88% of 2012 GDP. A separate StatsCan source puts real estate at ~12.8% and construction at ~6.8% of 2014 GDP. The comparatively smaller figure attributed to oil & gas is a reflection of Canada’s diversified service economy, not of the oil & gas industry’s insignificance.
In this context, it should be abundantly clear that dismissing a sector of the economy as “only 2 per cent of the national GDP” is nonsensical, to put it charitably.
Consider that eastern Canada’s chronic economic woes are spurred in part by the travails of the auto industry. A similar dynamic can be observed in states across the border, with broad swathes of the Midwest’s once-thriving communities reduced to relics of a bygone era. It would not make sense to dismiss either Ontario or Michigan’s plight by saying “the auto industry is only a single-digit percentage of GDP.”
Regional industries can have an out-sized impact, both locally and nationally. In Ontario, the struggles of 2.29% of the national GDP translates into significant economic stress. The US auto industry comprises roughly ~3.5% of 2012 GDP. That in 2008, 3.5% of GDP had President Obama’s nascent administration scrambling to bail out the industry – to the tune of $79.68 billion and untold political capital – should dissuade anyone of the notion that single digit percentages of the economy are insignificant.
While that decision remains controversial to this day, it was premised on the recognition that the economy is a hyper-complex, interconnected machine. Consider that separately from GM and Chrysler, American auto parts makers comprised 2.3% of 2012 US GDP. This sensitive link factored heavily into the bailout decision, for it understood that the collapse of one economic sector would have repercussions in other sectors. What would the failure of “only 2%” mean for sales, construction, real estate, or professional services? What would the resulting economy-wide effects of depressed consumer demand have on Canada’s already struggling automakers?
Taken a step further, it is important to note that not all slices of the GDP pie are created equal. At 3.31% of GDP, the oil & gas industry punches substantially above its weight.
Revenue-wise, the energy industry contributed $25.1 billion per year on average between 2008 and 2012, comprising ~11.9% of total taxes paid. The industry also accounts for as much as 25% of the value of the Toronto Stock Exchange, is Canada’s largest private investor, and directly and indirectly contributes to roughly 500,000 jobs.
Of equal importance is the fact that oil & gas shares are a building block in the investment plans of untold millions of Canadians, from individual portfolios all the way to the gargantuan pension funds set up for public employees. The Ontario Teachers’ Pension Plan’s $3.3 billion acquisition of Cenovus’ royalty assets and the Canada Pension Plan Investment Board’s recent multi-billion dollar shopping spree for oil & gas assets stand as testament to this.
Finally, oil & gas also makes a substantial portion of Canadian exports, with StatsCan averaging crude oil and natural gas exports at 18.77% over five years. Factoring in refined petroleum products, that figure rises to 22%. Forestry products, automobiles, and aircraft, including components of the latter two, trail at 6.91%, 14.07%, and 3.78% of exports, respectively.
So, at the risk of overstating the point – and taking into account economic inter-dependencies coupled with the oil & gas industry’s out-sized influence – arguing that the oil sands is “only 2% of GDP” is like saying that the heart is only 0.3% of a person’s total weight.

Thursday, 15 October 2015

Election Musings

By: Mike Doyle, President, CAGC

Article originally published in the Fall 2015 version of CAGC's quarterly magazine, The Source. Entire magazine and original article can be found here:  

As I write this we have seen twelve (12) months of a downturn caused mostly by the price of oil however the price of natural gas has languished for more than five (5) years so with both down our Canadian Industry is very much challenged to survive. Supply of oil continues to outpace demand and in some sense the Saudis feel they can outlast Non-OPEC producers (Canada included) and maintain their market share going forward. In the past when they have lowered output to keep the price of oil up it has encourage Non-OPEC producers to increase output.

Canada is the world’s fifth largest combined oil and gas producer. Of all major hydrocarbon producing jurisdictions, Canada is the only one facing active and vocal domestic and international opposition to gaining international market access for its crude, for the sole purpose of lowering global emissions.

(Bloomberg- August 3, 2015) — Canadians head to the polls on Oct. 19 for the 42nd time in the country’s history.

Prime Minister Stephen Harper faces the fight of his political life, with his Conservatives deadlocked in the polls against the left-leaning New Democrats and the centrist Liberals.
On the world stage, Harper champions budget austerity within the Group of Seven, often pitted against the U.S., and is one of the fiercest critics among western leaders of Russian President Vladimir Putin.

Opponents say Harper’s fractious relationship with President Barack Obama has hindered the approval of TransCanada Corp.’s Keystone XL pipeline project, with environmentalists accusing him of moving Canada in the wrong direction.

A victory in October would make Harper, 56, the first Canadian prime minister in more than a century to win four consecutive elections, and would entrench his agenda of cutting taxes, promoting the commodity sector and reducing the reach of the federal government.

Harper’s chief rival is Tom Mulcair, a 60-year-old lawyer who leads the New Democrats, a party with socialist roots that broke through in the 2011 election and now has a chance to take power nationally for the first time.

Mulcair became leader in 2012 and spent much of the previous parliament as Harper’s interrogator, with his cross examinations of the prime minister earning him accolades and a nickname: “Angry Tom.”

The party’s Achilles heel is economic credibility. The Conservatives will attack Mulcair as hostile to the nation’s oil industry and a free-spending, risky leader at a time when the country needs Harper-style fiscal discipline. 

The NDP promises to:

·         continue opposing the Northern Gateway pipeline; it initially supported the concept of a west-east pipeline, but said Energy East can’t be approved without a stringent environmental review process; opposes the Keystone XL pipeline. 

·         create a cap-and-trade system with a market price on carbon emissions; revenue from cap-and-trade would be invested in a greener energy sector in regions where dollars are generated.

·         work with provinces to create a fund to help Canadians retrofit their homes and offices to save energy and money.

·         redirect $1 billion a year from fossil fuel subsidies to investment in the clean energy sector.

·         invest in Sustainable Development Technology Canada including wind, hydro, solar and geothermal technologies to create thousands of new jobs for Canadians. 

For more than a century, Canada’s Liberals were the party to beat. Harper has chipped away at that dominance since he took power in 2006, reducing the Liberals to just 34 seats in 2011, the least ever. For salvation, the party turned to Justin Trudeau, 43, the son of one of the country’s iconic prime ministers, Pierre Trudeau. His support has whipsawed, soaring soon after he became party leader in 2013 before plunging this year to third place. Harper has attacked Trudeau — the youngest party leader by more than a decade — as unqualified. Now Trudeau faces a daunting task: He must counter the attacks, revive his poll numbers and win back ground from the NDP. Some fear failure would marginalize the centrist party for good and fuel American-style polarization of the political system between the right and the left. 

The Liberals promise to:

·         continue to oppose the proposed Northern Gateway pipeline; support Energy East and Keystone XL pipelines. 

·         put a price on carbon pollution that allows provinces to design their own carbon pricing policies.

·         partner with provinces and territories to establish national emissions reduction targets.

·         invest millions in clean technologies and enhance tax measures to create more green jobs.

·         introduce an environmental review process with more “teeth.”

·         hold a First Ministers’ meeting with premiers within 90 days of the Paris UN climate change conference in December to establish a framework for reducing Canada’s carbon footprint.

·         increase the amount of Canada’s protected marine and coastal areas to five per cent by 2017 and 10 per cent by 2020.

·         phase out subsidies for the fossil fuel industry.

·         along with the U.S. and Mexico, develop a North American clean energy and environmental agreement. 

The Alberta election suggested an “Anything But Conservatives” response with a shift to the left in voter demographics. This may play into Federal thinking as well that brings in a more activist government in terms of files that effect our industry. Change always comes with a cost on the economy (a carbon tax lowers GDP by way of example) that may or may not be recouped in the future. 

 From The Thursday File
Even the darkest night will end and the sun will rise.
                Victor Hugo, Les Misérables

Addressing the Activists

By: Lucas Silva, CAGC

Article originally published in the Fall 2015 version of CAGC's quarterly magazine, The Source. Entire magazine and original article can be found here:  

The energy industry in Canada has been facing a heavy dose of environmental activism for years. Greenpeace, for example, originated in Vancouver in 1971. Greenpeace’s activism is well known amongst the public, and their distaste, along with many other environmental non-governmental organizations (ENGO’s), for resource industries is blatantly obvious. What else is obvious in this equation? The industry’s apparent lack of motivation to stop ignoring it.

Greenpeace started out with a much different approach than what they have now. Co-founder, Patrick Moore, explained that they started with a strong humanitarian perspective, saving civilization from nuclear war. They helped stop hydrogen bomb testing off the coast of Alaska, they sat in front of harpoons in order to fight Soviet whaling fleets, and they protected baby seals off the coast of Newfoundland.

As he explained in his book, Confession of a Greenpeace Dropout: The Making of a Sensible Environmentalist, and during his many talks around the world, he left Greenpeace because of a distinct shift in philosophy. They began ditching science in favour of sensationalism, misinformation, and fear. All environmental policy and/or reform should be based on science and nothing else. When that wasn’t the case anymore, Moore had to leave. 

The birth of the Internet, followed by social media many years later, have given Greenpeace and their fellow ENGO’s a huge boost, providing them and all their supporters with a platform to provide, at times, absurd criticisms of the industry. 

The energy industry as a whole and the supporters behind it have failed to use social media as effectively, missing out on an opportunity, and falling significantly behind the opposition in the process.

The Internet and social media has given ENGO’s enormous power over public discourse and has given them a stage to play a role in the halt of many energy related projects. It’s time to stop ignoring this, make a change, and begin engaging activists on a humanized level.

The seismic industry used to be the former whipping-boy for ENGO’s. They saw the big, wide lines intersecting across various areas of land and wanted the land disturbance to come to an end. Nowadays, in Canada, the activism is felt in many different areas: pipelines, oilsands, aboriginal rights, fracking, land disturbance; the list goes on and on.

Despite the fact that Canada’s oil sands and energy industry emits a fraction of the worldwide CO2 emissions, they are, along with every facet of the energy industry in Canada, targeted by ENGO activism on a scale that seems to be unmatched around the world. Alberta is seen as dirty, as a black mark on Canada, a wasteland. The oil sands are helping to destroy the planet. All of these fallacies are widespread news because of the ENGO’s activism and outreach ability. The industries complete lack to do anything about it isn’t helping.

This activism comes in all shapes and sizes. From daily Twitter or Facebook activity, to protests in the streets, to members of Greenpeace risking their lives as they suspend themselves from the St. John’s bridge in Portland, Oregon to prevent Shell’s MSV Fennica icebreaker from passing through. 

Regardless if the activism is a stunt that attracts nationwide media attention, or if it’s a single tweet from an ENGO supporter, the industry widely uses one strategy while addressing this: ignore it.

If they choose to go outside the strategy of ignoring, that usually coincides with a news release or a social media response carefully put together by a public relations team that is a stretch to be described as genuine, authentic engagement. 

This is a problem, and it needs to change or else the industry will continue to have troubles garnering support, and the activist organizations will continue to represent public interest, which is far from the reality.

By ignoring activism and acting like it’s not happening, the industry is compounding the problem. If the industry wants to have a “balanced conversation”, something that’s crucial for the energy sector to move forward, then the conversation has to take part with the opposition as well. The conversation will forever remain unbalanced if the industry continues to neglect this, and the public dialogue will forever contain the misinformation and sensationalism that many ENGO’s spurt on a daily basis.
Many environmental organizations have successfully rounded up significant support by engaging with the public, in person and online, and by meeting individuals on a personal and emotional level. This has made many of these organizations powerhouses in the public dialogue. The industry can counteract some of this by engaging them on a regular basis.

One of the main priorities that industry has stated, is to make the industry more humanized and personalized, giving it a more genuine, authenticated dynamic. This, in turn, will allow them to further engage with both supporters and opponents. By responding to activism, the industry can limit the amount of public popularity activist organizations receive, and redirect the intended result. 

Every move these ENGO’s make is carefully designed to make the industry look controversial, potentially negatively effecting the energy industry through the media and in the public dialogue. By responding in a responsible and timely manner, you can redirect that desired outcome. By ignoring, or hiding behind realms of executives, lawyers, consulting firms, and public relations representatives, the industry is moving farther and farther away from become the humanized and personalized industry they want.

Beyond Action Strategy did a case review on this subject, and used a video put together by an activist organization to illustrate these points. An activist group put together a protest in Kamloops, B.C. at a career forum for LNG opportunities. They used effective music and camera work to elicit an emotional response from viewers, and manufactured a controversial setting in the clip. 

The desired outcome was to have the forum and LNG in B.C. look controversial, and to gain media attention by disrupting the forum and spewing misinformation. They succeeded. They made LNG look bad, even though the signs they used and the things they yelled had zero scientific evidence behind them, the clip got picked up by CBC and was portrayed exactly the way the activists wanted it to. They successfully garnered major media attention that would look poorly on the industry.

This happened because the organizers of the event completely ignored what the activists were intending to do, and just shoved them out the door, failing to engage with them on any sort of level. This made the forum look bad, and the media focus was on the controversial forum, instead of the LNG opportunities and the learning that took place.

Beyond Action Strategy explains that by understanding what the activist organization is trying to do, by talking to them and finding out what their goals are, by politely inviting them to join, and by downplaying their use of non-factual material, they could have defused and redirected the situation and focus. 

They gave four steps to follow in a situation such as this: 

1) Maintain your demeanour 
2) Defuse and direct
3) Invite the activists (depending on the size of activist contingency) to constructively participate
4) Record the events yourself

By doing these things, the outcome of the protest could have been far different. The industry was made to look stubborn and unwilling to engage in the video, that doesn’t look good to the public. If they engaged the activists, and responded to them in a polite manner, the perception of the industry group leading the LNG forum would have been entirely different. They had a chance to defuse the situation and redirect the attention the activist group was aiming for.

Public perception of the industry is poor, it’s as simple as that. Even perception from within the energy industry is poor, I’d venture to say that’s why you don’t see very many employees employed by the energy sector standing up for it on a regular basis. That’s slowly beginning to change, and the industry is beginning to employ initiatives to reverse this concerning trend, but it’s still a long ways away. It’s situations like the one outlined, that if handled differently, can help that poor perception in the long-run.

The example by Beyond Action Strategy was a specific case, with specific variables involved; thus, every situation, in person or online, is going to be uniquely different. However, the way in which you handle each case can follow similar guidelines. 

At the CAGC, we’ve undertaken social media as a part of our communications and we’ve been using it on a regular basis for over a year now. Of course, it takes time to build up a portfolio and to acquire some substance behind the type of content you’re putting out, but we’ve been making process on how much influence we may have on our followers.

Throughout our time with social media, we have received periods of activity where activists and/or ENGO supporters have responded to us or targeted our various profiles. We’ve made it part of our mandate to respond as soon as we can in a fashion that stands up for industry when warranted, but also breeds a healthy conversation about energy. We believe this type of engagement is essential for the industry.

Throughout one particular conversation on Twitter, we didn’t agree on everything, clearly we had plenty of different views on various subjects, but we found common ground on some topics and had a real discussion with multiple different users. Engaging people like that, opponents or supporters, will improve the long-term perception of the industry. 

We believe those on the other side of the conversation walked away with a better perception of us as an industry association, and we even received comments from profiles that were uninvolved in the conversation that mentioned they were pleased to follow a healthy conversation.

This was only one case, but it affected a number of people in a positive way; thus, affecting the industry in a positive way. Of course, adopting a strategy like this could take a long time for the slow, stubborn, old-fashioned energy industry; much like it took far too along to adopt social media in the first place. But if positive change is ahead, the industry needs to adjust and make this change much quicker.

We as an association can only do so much, but every single incremental gain counts. The more industry does the same, the bigger the change. It’s time to start having a real conversation with individuals, to start personalizing the industry, and there’s no better way to do that than to engage those who may be on the opposition.