After the Sands

Energy and Ecological Security for Canadians

Gordon Laxer

• Publisher: Douglas & McIntyre
• Year: 2015
• Print ISBN:
  9781771621007
• eBook ISBN:
  9781771621014
• Topic: Politics & International Relations
• Subtopic: Environment & Energy Policy
• Index: Politics & International Relations

After the Sands outlines a vision and a road map to transitioning Canada to a low-carbon society.Despite its oil abundance, with no strategic reserves, Canada is woefully unprepared for the next global oil supply crisis. There’s no good reason for Canadians to use much more oil per capita than people in other sparsely populated, northern countries like Norway, Finland and Sweden—nations that use 27 to 39 percent less oil per person. In After the Sands, Alberta-based political economist Gordon Laxer proposes a bold strategy of deep conservation and a Canada-first perspective to ensure that all Canadians have sufficient energy at affordable prices.The most achievable way to gain energy security is to supply Canadians with their own oil, natural gas and renewable energy. And the best way to cut carbon emissions is by phasing out Canada’s role as a carbon-fuel exporter.Canada has all the oil, gas and coal needed to transition to a low-carbon future. Remarkable hydro power resources give Canadians a large base of renewable energy, which can be expanded with wind, solar, geothermal and biomass. Few countries have these options in adequate quantities. But, as Laxer argues, Canada will not get there until we overcome the power of vested interests and untangle the trade agreements that block Canadians from secure and fair access to the nation’s own energy resources.Impeccably researched, After the Sands is critical reading for anyone concerned with climate change and the future of Canada.

Chapter 1
“Let the Eastern Bastards Freeze in the Dark”

My father rode a camel. I drive a motor [car]. My son flies a jet plane. His son will ride a camel.

—Sheik Rashid bin Saeed Al Maktoum, Saudi Arabia

In 1872, Jules Verne wrote a futuristic book about Phileas Fogg and his French companion Passepartout travelling around the world in eighty days to win a £20,000 wager. The world was much larger then; cheap oil and internal combustion engines have shrunk the earth since. While rapid travel is new, oil is not. Humans used oil thousands of years ago. The Chinese refined and moved oil through bamboo pipelines in 2000 BC. Egyptians lit lamps with crude oil in 1500 BC. Alexander the Great used flaming torches made with liquid petroleum in battle.1

Bitumen, a semi-solid form of petroleum found in great abundance in Alberta’s Sands, has an even older history. Bitumen has been found on stone tools used by Neanderthals 40,000 years ago. Egyptians used bitumen to mummify their dead. Mummy, in fact, comes from the Arab word mumiyyah, meaning bitumen.2 Bitumen, pitch, tar or asphalt—words used interchangeably—was long used for waterproofing ships, baskets and wood footings of bridges in rivers. The Bible talks about Noah using pitch or bitumen to seal the ark. The Egyptians waterproofed their ships with bitumen in 2500 BC. Fur traders in Alberta found indigenous people using bitumen to seal their canoes along the Athabasca, the great river that runs through the immense Sands region of northeast Alberta.

Oil wells were drilled in Russia, Poland and the Caspian Sea area of Azerbaijan in the early 1800s. The first successful North American well was punched in 1858 in Petrolia, Ontario, followed the next year by America’s first near Titusville, Pennsylvania. Most oil was used to light lamps, replacing the hunted-out whale oil of Moby Dick fame. Petroleum oil became important only around 1900, when internal combustion engines began to replace horses, trains and coal-fired engines. Once oil became crucial in modern transport, the military wanted to store reserves. In the buildup to the First World War, oil-burning ships proved much faster than those burning coal. Winston Churchill, as Britain’s First Lord of the Admiralty, switched the fleet from coal to oil in 1911 and stressed Britain’s strategic need to procure oil. The next year, United States President William Taft set up an emergency naval oil reserve in Wyoming, called “Teapot Dome.”

Oil got its land debut in September 1914 after France’s government fled Paris in the face of advancing German forces. Taxi drivers proved oil’s military value by rapidly rushing French troops to the front and saving Paris. Three years later, still at war, France ran short of oil and obliged oil companies to reserve ninety-one days’ worth of oil for domestic use. Almost sixty years later, the International Energy Agency and the European Community set ninety days as the standard for strategic oil reserves.

Strategic petroleum reserves (SPRs) were also created by western governments during the oil supply disruptions of the Arab oil embargo in 1973–74. The SPRs were too late for that crisis, but are today’s first line of defence against oil shortages. In the US, oil was first put into SPRs in salt caverns near the Gulf of Mexico in 1977. Fresh water injected into the caverns dissolved the salt and opened space to hold the oil. But the SPR failed its first test. After the Shah of Iran was overthrown in 1978, to avoid upsetting its key Middle East oil ally, Saudi Arabia, the US failed to release SPR oil leading to the biggest oil withdrawal ever from world markets: 5.6 million barrels per day.

Ironically, SPRs grew large enough for effective use only in the 1980s, when they were no longer needed. New liberalized markets combined with deep conservation made SPRs redundant. However, they proved useful later, during wars and natural disasters.

Canada Is Recklessly Unprepared

No one can be sure when the next international oil supply shock will strike. Despite oil’s relatively low international price and the short-lived burst of US shale oil production, a disruptive international oil supply crisis will very likely hit in the next decade. Countries lacking at least one of the following conditions will be hit hardest:

• citizens having first access to domestic energy resources
• long-term oil supply contracts for oil-importing countries
• the military might to commandeer other countries’ oil
• strategic petroleum reserves, or
• a transition already underway to deep-energy conservation and to renewables

Despite vast oil deposits in Alberta’s Sands, Canada lacks all five safeguards. It is urgent that Canada do what every other industrial country is doing: develop a national plan for global oil supply crises.

In 2012, Prime Minister Harper revealed why Canada has no Ottawa-initiated energy security plan, when the CBC’s Peter Mansbridge asked, “Does it not seem odd that we’re moving oil out of Western Canada to either US or new markets to Asia when a good chunk of Canada itself doesn’t have domestic oil?”

“On a certain level it does seem odd,” Harper replied. “The fundamental basis of our energy policy is market-driven...I think it served the country well; it served government revenues well; it served the creation of jobs well; but it is fundamentally a market-driven decision. We don’t dictate pipelines go here or there.”4 In other words, Canada has no national energy plan because the prime minister doesn’t believe in one. Harper added, “We’re the only supplier that is secure.” Secure for whom? Canada promises the US oil security, as the US has its own national energy security and independence plan. The question is, if Canada is looking after US oil security, and the US is looking after its own oil security, who is looking after Canada’s?

The US presumes it has the right to help itself to as much Canadian oil as it wants, but remains a fierce energy nationalist. A 1975 act to put the US “solidly on the road to energy independence” bans the export of US crude oil, with only modest exceptions authorized by the president.5 The 1920 Jones Act, still in force, requires all goods transported by water between US ports be carried in US-flagged ships built in the US, owned by US citizens and crewed by Americans.6

If Harper rejects a national energy plan, why the about-face by his provincial Conservative counterparts and Big Oil? Fresh from winning a mandate in April 2012, Alberta’s Conservative premier Alison Redford convinced other western premiers to support a “Canadian energy strategy.” She used buzzwords about energy efficiency, renewables, eco-regulations, cumulative impacts and “people as Alberta’s most important resource,” but made it clear that Alberta needs a national strategy because “we know we can’t get our products to market without infrastructure that crosses other provinces.”7

In 2015, Alberta’s New Democratic Party (NDP) premier Rachel Notley is a less keen salesperson for exporting Sands oil. She’s said she will not go to Washington to lobby for the Keystone XL pipeline, which she’s declared to be an internal American decision. She also thinks the proposed Northern Gateway oil pipeline to the northern British Columbia coast creates too many environmental problems and too much opposition. But Notley’s NDP government may represent more continuity than a break. Notley is open to the twinning of the Kinder Morgan oil pipeline to Vancouver and the Energy East oil pipeline to Saint John, New Brunswick. Those may be enough to allow continued expansion of Sands oil production.

One impetus for Alberta and Big Oil to support a Canadian energy strategy was to prevent a truly national strategy from taking hold. In 2005, Parkland Institute at the University of Alberta developed an Energy and Ecological Security vision for Canadians. As Parkland Institute’s head, I helped drive this initiative, which shared the national energy “security” focus of official US and British plans but differed from them by challenging the supremacy of the petro-elites.8 Petro-elites include transnational oil and gas corporations, both foreign- and Canadian-controlled, and the federal and provincial governments that support them. Regulatory bodies like the National Energy Board, set up to ensure that Canadian energy be developed in the national public interest, have been captured by the corporations they are supposed to oversee.

An Alberta Way Forward

Parkland’s strategy took a unique view: a national eco-energy plan for Canadians from an Alberta perspective. Parkland was the first to adopt the term Canadian Energy Strategy to distinguish it from Pierre Trudeau’s National Energy Program (NEP), the supposed dragon that mythically slayed Alberta’s economy in the 1980s. (The NEP is continually denigrated in Alberta in the hope that a successor will never rise; it is never mentioned that the oil industry was devastated around the world during the time the NEP was in operation.) Because the Parkland strategy was critical of the Sands from inside Alberta, Big Oil and its supporters tried to head it off by usurping the “Canadian Energy Strategy” language and flipping it into a plan to support Big Oil’s agenda. To succeed, the meaning of “national” had to be altered.

“National” energy security conjures up different imagery in Canada and the US. In the latter it usually means oil and natural gas self-sufficiency or energy independence, the kind celebrated on the Fourth of July. President Obama made it clear that Canadian oil is foreign oil when he declared that oil delivered via the proposed Keystone XL pipeline won’t even stay in the US: “It is providing the ability of Canada to pump their oil, send it through our land down to the Gulf, where it will be sold everywhere else.”9 In Canada, “national” is employed to mean exporting unlimited amounts of Canadian energy that mainly enrich foreign energy corporations, regardless of environmental or energy security consequences for Canadians. Canada, alone among industrial countries, gave another country virtually first access to its energy resources through the North American Free Trade Agreement’s (NAFTA) energy proportionality rule, an issue explored in chapter 4.

American environmentalists often pitch green energy proposals as enhancing US energy independence and security. Canadian environmentalists seldom talk about their proposals as helping energy sovereignty, because such a subversive idea would not be well received by the Canadian petro-elites. Our petro-elites promote North American, not Canadian, energy security because they want no limits placed on the sale of Canada’s carbon fuels.

Canada can ensure energy security for all its residents, but only if Canada wins energy independence. Instead of leaving Eastern Canadians dependent on risky oil imports, we can ensure energy security for all Canadians by diverting domestic conventional oil (not Sands oil) currently bound for the US to Quebec and Atlantic Canada instead. Limiting production to Canadian conventional, non-fracked oil would threaten Alberta’s Sands operators, but would be good in the long run for Albertans and all other Canadians. Restricting production of domestic carbon fuels to solely meet Canadian needs would mean drastic cuts to oil production and greenhouse gases. It would be good for the earth’s climate but would slash corporate profits and asset values—the real reason that petro-elites fiercely resist Canadian energy and ecological security.

Along with Australia, Canada is the most vulnerable country in the International Energy Agency (IEA) to short-term oil supply shocks. Until 2014, Canada imported about 40 percent of the crude oil that our residents use, while exporting 70 percent of domestic crude oil output to the US.10 The reversal of Enbridge’s Line 9 from Sarnia, Ontario, to Montreal will cut crude oil imports somewhat, but the surge of US shale oil ensures that Enbridge’s pipe...

Table of contents

• Advance Praise for After the Sands
• Acknowledgements
• Preface
• Chapter 1 “Let the Eastern Bastards Freeze in the Dark”
• Chapter 2 Suddenly Without Oil
• Chapter 3 Without a Parachute
• Chapter 4 NAFTA and Proportionality: A Devil’s Bargain
• Chapter 5 Alberta: Fossil-Fuel Belt or Green Powerhouse?
• Chapter 6 Resource Nationalism Everywhere but Canada
• Chapter 7 Pipelines or Pipe Dreams
• Chapter 8 Let Goods Be Homespun
• Chapter 9 How Much Is Enough? A Conserver Society
• Chapter 10 Solutions: Energy and Ecological Security for Canadians
• Glossary
• Endnotes
• Index