Alberta’s oilsands have iconic status in Canada. They are magnets for foreign capital and sources of great wealth.
They are credited with keeping this country’s economy alive in the midst of a global slump.
Politically, they
symbolize the new Canada — one governed by a prime minister determined
to encourage resource extraction at the expense of virtually everything
else.
But as Albertans are
discovering, the icon has feet of clay. Even a brief hiccup in the
oilsands boom has sent the province’s finances into a downward spiral.
And the future remains
uncertain. Suddenly, the politics of climate change have made Alberta’s
carbon-emitting bitumen less welcome in the United States.
More to the point,
technological changes that favour the production of cheaper shale oil
and gas, are transforming the U.S. from an energy pauper into one of the
world’s big petroleum players.
To put it another way, Canada’s biggest export market no longer needs the tarsands quite as much as it did.
Into this mix comes a new study that tries to make sense of the oilsands phenomenon.
Actually, The Bitumen Cliff
is an oldish new study in that it uses the classic work of political
economist Harold Innis, one of the first to undertake a systematic
analysis of what makes the Canadian economy tick.
To Innis, Canada’s
history was dominated by natural resource exports, which he called
staples. That Canada has exported raw materials is hardly novel. What
Innis grasped, however, was that these staple exports created a pattern
of development, both political and economic, that over time was hard to
escape.
To use the language of one of his students, the Canada that Innis described kept enmeshing itself in a “staple trap.”
Vast quantities of
money would be spent (usually by government) on infrastructure needed to
extract whatever resource was in demand. And then, suddenly, things
would change.
Maybe the commodity
would fall out of fashion — as did felt hats made from Canadian beaver
pelts. Or maybe technology would make the staple irrelevant, as the
steamship did to masts made from Canadian white pine.
In all instances, Canadians would be left paying the costs.
The Bitumen Cliff
applies this analysis to the tarsands. Again, vast quantities of money
are required, not just to extract the heavy oil but to transport it by
rail, pipeline or ship.
Again, other economic
activities are given short shrift. In this case, the high dollar created
by Canada’s soaring oil exports has eaten into the ability of
manufacturers to compete abroad.
And again, the
political system wraps itself around the staple, with Ottawa’s
Conservative government gutting environmental laws for fear that they
might interfere with pipelines and resource extraction.
Can this last? Unless
tarsands oil is a very unusual staple it cannot. Prices rise; prices
fall. Tastes change; things happen. We are beginning to see some of that
now.
The authors suggest
that what they call the carbon trap will be the contradiction that
finally sinks the tarsands — that the world will turn away from forms of
energy that emit high levels of greenhouse gases.
When this does happen,
they say, we will once again be left holding the bag — dependent on
natural resources that are no longer in demand — having failed again to
develop the kind of integrated and balanced economy that can keep this
country on an even keel.
The Bitumen Cliff,
published by the Canadian Centre for Policy Alternatives, is written by
Canadian Autoworkers economist Jim Stanford, Polaris Institute director
Tony Clarke, consultant Diana Gibson and — the Innisian in the crowd —
Carleton graduate student Brendan Haley.
Thomas Walkom’s column appears Wednesday, Thursday and Saturday.
Chris
(Christopher) Faiers was born on Hamilton Mountain, Ontario, Canada in June 1948.
He began publishing haiku in 1968 under the guidance of Haiku Magazine’s
Eric Amann. He had an enlightenment at age 20. Cricket was his childhood nickname
and is his haijin name.