In the long term, energy transition is inevitable. But the push to crush its timeframe is causing avoidable economic damage in Canada. This damage, in turn, becomes an obstacle in achieving the said transition. Canada’s Green Brigade is unaware of this paradox.
As I observe the debates happening in Canada over the fossil fuels v/s alternative energy, I am struck by one salient aspect that is met with dismissiveness from the proponents of green energy, viz. the negative financial impact on workers of policies that de-prioritize the fossil fuels industry.
Energy is central to life in general, and especially of pivotal importance for human civilization. Given its centrality and complexity, it is but natural that energy is a multi-faceted issue. In the context of fossil fuels v/s alternative sources, these facets consist of:
- Climate change itself, and the veracity of data around this argument,
- Terminology, such as referring to CO2 as ‘carbon’, and then calling it a pollutant,
- The hypothesis that changing the source of energy from fossil fuels to alternatives reduces the said ‘pollution’,
- The scale of mineral extraction & other resources required for alternative sources, and its impact on the environment,
- Land-use, and specifically, diversion of ecologically productive land to energy generation,
- Features of energy itself: consistency, reliability, portability and density,
- The current reliance of alternative energy on fossil fuels & petrochemicals,
- Much higher cost of generating energy from alternative sources compared to fossil fuels,
- The role of foreign entities in the activism against Canadian fossil fuels industry,
- Dealing with the disruption in people’s lives and future prospects caused by declining (or blocked) economic activity in fossil fuels as a result of government policy and/or activism, and
- Most importantly, the role of energy security in ensuring national security.
On all these points except the last two, everyone has lots to say, on both sides of the argument. This is not to say that the debate – in any forum or at any level – is making any noteworthy headway; either side is locked in its own stance and arguments. In my experience, this is because any evidence produced against the green energy proposition is brushed off by its proponents, or led down the rabbit-hole of circular reasoning and references. Watching these proponents of alternative energy ‘debate’ is like watching swirling dervishes perform their dance – the trance-like state is not supposed to lead to anything, but rather is an end in itself. To the extent that they deign to respond to the economic concerns (the second-last point in the above list), their response tends to be a mix of dismissiveness and condescension, such as ‘learn to code’, or ‘the world is transitioning whether you like it or not’. Witnessing these responses reminded me of an old Indian movie.
WINDS OF CHANGE
The Hindi movie Naya Daur (meaning ‘New Era’) was released in 1957, and became a big hit. As is common with Indian movies, it has several sub-plots – friendship-turned-into-enmity, love, misunderstanding, rich versus poor etc. But at its core, the story is about technological advancement causing loss of livelihood for many people. Here is a synopsis of the core plot:
In a very rural setting, a kindly business owner runs a wood-sawing factory. Because the sawing is done manually, it’s not a ‘mill’ in the sense that we are used to. The factory employs many people, including for cutting trees and sawing the wood. Then, the mill owner’s son arrives, having finished advanced education. He has modern ideas, and prefers mechanization, so he gets an electric machine installed, rendering many factory workers jobless. Their cause is taken up by a man (the hero of the movie) who derives his livelihood not from the factory, but by operating a horse-cart to ferry passengers to and from the railway station. Later, his livelihood – and that of the other horse-cart owners – is also jeopardized when the factory owner’s son starts a bus service between the village and the railway station. At the point of near-confrontation with the factory owner’s son, he says, “Sir, you are highly educated. Please find a way whereby the machine can also run while the hands don’t stop.”
The movie was made in a period when there was a major push to industrialize India, so this was a common concern for many. More broadly, however, this is a recurring issue every time a major change takes place in the structure of how we produce and distribute things to satisfy human needs and wants. When it comes to energy, we are at such a point in time.
In the movie, this crucial question is not answered; it ends instead on a dramatic climax that culminates in the defeat of the bus against the hero’s horse-cart. The movie makers probably skirted the main issue because at the time, there was no answer to this dilemma, at least in India. However, with the benefit of the experience and advancement in knowledge that has taken place in the six-decades plus since then, we can at least try to answer the riddle facing us in our time. In this regard, it may be helpful to employ a method known as ‘management by objectives’. As I noted earlier, the issue of energy transition is (a) massive, (b) hugely complex, and (c) multifaceted. Therefore, it becomes necessary to break down the issue into its components, arrive at the solution (or possible solutions) for each component, and then integrate all of those into a policy.
As regards the particular component of the energy transition issue that is the subject of this discussion, the question before us is very simple: When it comes to the cost-benefit analysis of the pace of transition, what is the ‘sweet-spot’ at which the pace causes the least economic disruption while delivering the quickest changeover from fossil fuels to alternative sources?
Before we attempt to answer the question, however, we would need to factor in the aspect of energy security in any proposed solution. I view this as a pre-requisite to any attempt to answer the question.
Looking at the state of technology in the alternative energy sector today, it is apparent that it is nowhere near delivering the required level of consistent, reliable and affordable generation of power that we expect in today’s world. It is also amply clear that taking that technology from where it is today to where it needs to be in order to be a serious alternative to traditional energy would require enormous amount of research involving megatons of capital. I am of the opinion that many of the shortcomings of the current technology for alternative energy are brought into existence because of the rush to deliver ‘results’ in an unrealistically short timeframe. Without meaning to disparage the fine and capable people involved in the research and their dedication, it can be said that the pressure to deliver ‘results’ is forcing them to push out technology that is still at the sub-optimal level. They know that they can create something that works somewhat, and then it is the job of the political class to ‘sell’ their sub-optimal technology to the policy-makers, who have also allowed themselves to be pressured into implementing unreliable and uneconomic ‘solutions’ in pursuit of political posturing in the hope for votes.
Energy transition is, of course, a global issue – which means that other countries are also pursuing the matter. How are they going about it?
CART AND HORSE
Proponents of alternative energy in Canada like to point at the example of Norway in support of the argument that ‘oil is dead’. This was emphasized most vociferously when Norway pulled its investments from Canada’s oil sands. However, they don’t acknowledge the fact that Norway has built a Sovereign Wealth Fund of over US$ 1.3 TRILLION owing largely to its oil-wealth. Crucially, Norway is increasing its oil output instead of reducing it, as reported here in January 2021.
In a nutshell, Norway funds its research and implementation of green energy through revenue derived from oil. I see absolutely no reason why Canada shouldn’t do the same.
What about Saudi Arabia, one of the largest producers of oil in the world, if not the largest? In April 2021, it announced a US$ 5 billion project to develop hydrogen cell technology. In the neighboring country of United Arab Emirates, their ambitious plan for renewable energy includes a pilot project for hydrogen cell technology. Crucially for our discussion, neither country is pursuing green energy projects at the expense of their oil output. Here, it is of special importance that hydrogen cells are made using heat, which can be generated by using any source of energy. My reading of this is that the Arabs are smart – they will use their oil-based (or gas-based) energy to produce ‘green’ energy, thereby securing the twin-objectives of preserving the future of their fossil fuels industry and establishing their ‘green’ credentials.
In Canada, by contrast, a combination of activism and government (sometimes it is hard to tell if they are different) has resulted in an environment where fossil fuels are denigrated and demonized. Instead of seeing them for the continuing boon that they are, we are forced to see them as the embodiment of evil that must be banished from our midst post-haste. Mixing metaphors here, we have put the cart before the horse, and thereby shot ourselves in the foot.
THE WAY WE ARE
The obvious question is, therefore: why?
Opinions are often subjective. With that caveat in place, I would venture that one of the reasons why so many Canadians are on-board with the hasty, ill thought-out, ‘I don’t care how this hurts you’ approach is that we have an exaggerated sense of our place in the world. This is especially true of the policy-makers and their supporters. The stark reality is that Canada’s contribution to the reduction of global CO2 emissions would, at best, be no more than rounding error – so our participation is significant only as a matter of principle, and not in terms of consequence. But no amount of pointing this out diminishes the misplaced enthusiasm for misguided policies that impose onerous – even crushing – financial consequences on a lot of Canadians. The unspoken contention is that the world looks to Canada for inspiration and guidance on this matter (whereas the reality couldn’t be more different). The only apt way to describe this state of mind is ‘delusions of grandeur’.
This tendency to sacrifice the well-being of our own compatriots for what we imagine is the greater good benefiting the world at large reminds me of a Gujarati saying:
‘Dobu ey khoyu, ane dafol pan banya’
(In addition to losing our buffalo, we were also proved to be the laughing stock)
(Note: In large parts of Asia, water buffalo is kept as cattle.)
I think this saying originates from the time when animal sacrifice was common in the Hindu society. So I imagine that the context for this saying is that someone voluntarily offered their buffalo for a sacrifice that was supposed to benefit the village – but the other villagers knew that the need for the sacrifice was entirely conjured. Therefore, they laughed behind this person’s back for having foolishly given away a valuable asset. I cannot say for certain if this scenario is indeed the origin of the saying, but I am fully confident that it describes our circumstances most accurately. We are blessed with huge amounts of a valuable resource that enjoys – and will continue to enjoy for decades – robust demand globally. The sensible way to go about pursuing energy transition would be by utilizing this resource to the hilt, and invest part of its revenue in the research (that is still sorely needed) to bring alternative energy sources at par with fossil fuels in terms of consistency, portability, affordability etc. Other countries are doing it, but somehow we have convinced ourselves that shunning that option makes us more virtuous – and that being virtuous is more important than being well-fed.
Another front on which I take issue with the mad rush to implement an energy transition in Canada is that the arguments are based on what is needed, rather than what is needed and within our means. Together with the induced panic about an imminent catastrophe on the climate front, this serves to rule out any debate to corroborate the arguments regarding the need for the transition. Asking questions is painted as being athwart the common interest. So, the second part of my answer to the question ‘Why?’ is that in Canadian society, collectivist thinking is dominant.
Over the last little while, I have been trying to sharpen my understanding of ‘national security’. I have realized that the concept goes far beyond having a sufficiently staffed and equipped military (which we lack). I have realized that ‘national security’ can be sub-divided into energy security, food security, manufacturing capacity, public health and so on (for a detailed exploration, see my earlier article Fighting The Previous (Civil) War). As I approach the end of this article, I realize that a robust, thriving economy is a component of national security. An impoverished citizenry is easy to defeat. This is especially relevant in the current era, when threats to national security are not limited to military ones, but rather are more likely to emerge on other fronts. A wobbly energy system coupled with a financially struggling population seems, in my opinion, a recipe for disaster (for Canadians) and a dream scenario (for forces that would wish to harm our national security).