Before the doors of the main convention centre ballroom opened on the first day of Globe 2016 in Vancouver last Wednesday, there was a sizeable line outside. Prime Minister Trudeau would be delivering the morning keynote—a pretty substantial upgrade in the conference’s prestige and prominence compared to previous years—and delegates had arrived early to secure seats.
I overheard a pair of them in front of me speculate about how the prime minister intended to navigate the gaps and rifts between his climate policy goals, the more urgent daily demands of Alberta’s oil industry to get its oil to tidewater, and the entrenched opposition to new pipelines in Vancouver and Montreal (and many other places across the country).
“So it’s Trudeau, the tap dancer,” one said to the other, bringing the topic to a close.
I could almost see the prime minister in the role, as in an editorial cartoon, tuxedoed and dashing, twirling between impatient dance partners. I wasn’t sure then if the cartoon was celebrating his success or mocking his failure. But it seemed, in any case, like a poor use of the prime minister’s time and resources. Not because the issues aren’t important—they are crucial—but because of the role he was cast in. It was not about leadership on a new course, but about catering to entrenched positions. It was a placating role. It would get us nowhere fast.
The key lesson from Globe 2016, which was probably the most thought-provoking sustainable business conference I’ve ever attended in this country, is this: If Canada winds up doing climate policy through a series of proxy wars over pipeline projects, it would be maddeningly ineffective and could lead entirely in the wrong direction—toward deeper division, further entrenchment, regional point-scoring, and petty recrimination.
It would be a terrible thing for the country to let it survive beyond his mandate. It should die. We should reboot. We’re not that far apart on where Canada needs to go on climate change and fossil fuels. And the conversation about how to get there badly needs nuance, collaboration, and compromise.
Let’s begin with the fact that on the surface of it, pipelines are barely on topic at Globe. The ostensible purpose of the conference series is the business of building a green economy (“Business Innovation for the Planet,” read this year’s theme) and the three days of presentations and workshops were focused mainly on next-generation energy technology and electricity grids and infrastructure. Sure, there were sessions titled “The Carbon Bubble” and “Decarbonization,” and oil industry executives peopled the panels and hallways in considerable number. But not one of the thousands of people gathered in Vancouver who work on this stuff for a living thought the conference was shirking its duty by not having a main-ballroom plenary entitled “Energy East: Salvation or Menace?”
Still, the pipeline question haunted every speech and forum. It was the first question Justin Trudeau was asked when he sat down for a chat with Discovery Channel’s Ziya Tong after his opening speech, the predominant topic at the prime minister’s press conference, and the dark Vancouver cloud that hung over every panel’s Q&A. The panel of premiers—including Alberta’s Rachel Notley and Quebec’s Philippe Couillard—seemed pointed in not mentioning pipelines at all. The inclusion of Al Monaco, CEO of Enbridge, on Thursday morning’s marquee panel discussion seemed to place the issue on stage, unspoken, throughout the discussion. It was ubiquitous in the delegate chatter in the hallways and evening receptions.
The pipeline question turns on two bald statements which two rival camps assume to be unvarnished truth. The first—the industry hypothesis, let’s call it—is that a major new pipeline is essential to the continued economic success of Alberta’s oil sands, and hence the prosperity of the whole country. The second—the activist hypothesis—is that any major new pipeline will lead to a new wave of growth in the oil sands (and many tonnes more greenhouse gas emissions) that will negate any good climate deeds the wonks and entrepreneurs advocate for so keenly at events like Globe.
Salvation or menace. Choose your side.
Here, to my mind, is the great lesson of Globe: To choose a side is to stop thinking, and there is entirely too much complexity, uncertainty, and unpredictability in the planet’s climate, the global economy, and the world’s energy systems to stop thinking. I found the ground beneath my provisional conclusions would shift from session to session and even from one panelist to another in some of the best sessions. At a national scale, we decided on Wednesday of last week to start looking at this issue holistically. Why would anyone think we’d nailed it by Friday?
No one has perfect foresight. No one can tell you definitively what any given energy project’s long-term consequences will be. And we ignore the complexity of the question at our peril.
Let me give you a couple of examples.
For me, one of the most mind-bending panels was one entitled “The Carbon Bubble: Managing Financial Risks of Stranded Assets,” which took place in one of those over-lit, second-tier conference rooms exactly as airless as the session title. It’s always a surprise to find real fireworks in such a confined space, but there they were, primarily between the competing interpretations of Mark Campanale, the executive director of the Carbon Tracker Initiative, and Jackie Forrest, the vice-president of ARC Financial.
Campanale is in charge of the pack of UK-based financial analysts who developed the whole “stranded asset” concept, which argues that oil companies are building their stock-market value on the future profits of oil reserves that can never be extracted under the world’s stated climate targets. Forrest is an executive at one of Calgary’s largest oil and gas investment firms. As far as I could tell, both agreed that a low-carbon economy was both a necessary goal and an inevitable transformation already underway. Their sense of where Canada’s oil sector fit in that picture, though, was night and day.
“The real risk that investors see today is not clean energy,” Campanale said. “It’s actually in the fossil fuel sector.” Oil would remain a valuable commodity for decades to come, he argued, but oil companies were betting on continued growth in demand that would likely never materialize. Unconventional projects like the oil sands are particularly vulnerable from Campanale’s point of view. The Saudis and their hundred years of cheap conventional reserves “want to be the last provider of oil.” The most viable future for the rest, Canada included, might be to stop chasing growth and switch to planning for their own shrinking role by getting more value from each barrel they produce. (There’s even an argument—not Campanale’s—that pipelines like Energy East are necessary precisely because they can shrink the discount on bitumen that producers are currently obliged to accept en route to the Gulf of Mexico.)
Forrest, meanwhile, argued the growth case. Even in gloomy 2015, she said, global oil demand continued to grow. Her firm saw “limited stranded asset risk” on the horizon. If there was a potentially disruptive force five or ten years out, it might be the echo of the current collapse in new investment. Oil wells all over the world deplete at a known rate, she explained, and even under the 450-parts-per-million carbon dioxide scenario she laid out (which admittedly is less ambitious than the one agreed to in Paris), something like 40 million new barrels of oil per day will need to be developed between now and 2040 just to keep up. Implicit in her point is that some sliver of this growth will continue to come from Alberta’s oil sands, regardless of what route those barrels take to market.
The point here is to illustrate how wide the gap is even between two financial analysts arguing from pretty much the same set of facts and assumptions. Campanale says that shrinking supply makes it foolhardy to bank much longer on growth in the oil sands. Forrest thinks the real worry in the next ten years or so is excess demand. Neither makes an explicit point about any given pipeline, but the subtext in both arguments is that any given pipeline project will not be the decisive factor regarding the basic disposition of Canada’s oil industry, let alone the world’s, in five years or fifteen. It follows, I’d argue, that a pipeline project’s approval is therefore entirely the wrong place to centre this debate.
If this was the nature of side-session fireworks, the main stage’s version came the following morning. The keynote for that day’s “Accelerating the Energy Transition” panel was Michael Porter, a Harvard economist who is prominent to the point of deification in the circles traveled by Globe’s delegates. (He has a widely discussed groundbreaking hypothesis named after him. His thinking is taught in all the best schools. You get the picture.)
His central theme was that North America’s abundant unconventional fossil fuel assets are a gift, a long-term “structural advantage,” yielding low energy prices and creating millions of jobs and positioning both Canada and the US better than anywhere else in the world to lead the transition to a low-carbon economy.
Porter’s optimism came with a single caveat. “What is the problem?” he asked. “The problem is we’re having a war about this.” Porter spoke mainly to the grassroots battles over fracking for natural gas and general political gridlock in the US, creating a public discourse “fraught with confusion and misinformation.” This included the industry’s glib dismissal of local environmental concerns near fracking wells, as well as the environmental movement’s arguments that developing unconventional fuel delayed renewable energy development and locked us into higher greenhouse gas emissions.
Again, line by line and assertion by assertion, there are counter arguments. Bitumen isn’t natural gas, for starters. What struck me, though, listening to Porter, is that it would be hard to imagine a Canadian issue more readily capable of bringing about anything resembling Washington’s recent political gridlock than the pipeline debate. Even in its first minor skirmishes, it saw Quebec politicians deride western Canada’s environmental record and western politicians attack Quebec over equalization payments. There is no good outcome for anyone down that path. And we could get stuck there among its vines and brambles for years.
There were several excellent counter arguments on the panel that followed Porter’s presentation. The most pointed came from Tzeporah Berman, one of Canada’s most prominent environmental activists and lately a welcome voice pushing for a more friendly discussion between the energy business and its critics.
Berman took Porter to task for his assumption that natural gas was a “crucial bridge” between the current energy economy and the low-carbon one. She was visibly tense while taking on Porter, which is far from her usual rhetorical stance. Still, she presented a single slide (taken from a report by Rhodium Group, an economic research firm) that showed natural gas demand falling off as increasingly cheap renewables ramped up. She suggested Porter’s argument was built on “a blanket premise that’s a little bit dangerous.”
Berman had other reservations as well. Porter had failed to take into account the “carbon math” of a world constrained to just one and a half degrees of warming, the new Paris target, and he hadn’t acknowledged that it was a global wave of activism, not just the good cheer of elites, that had laid the groundwork for a more collaborative approach to energy issues.
On Berman’s point about any and all energy scenarios requiring recourse to one and a half or two degrees, or some sort of hard target, there was a remarkable response. Another panelist—Al Monaco, the CEO of Enbridge—said, “I think Tzeporah is exactly right.” CEO of Enbridge, top climate activist. Total agreement on goals. Not nothing. There was no disagreement, either, from the other panelists Suncor CEO Steve Williams and Diane Regas of the Environmental Defense Fund.
Once again, the pipeline question lingered between the competing lines of argument, largely unstated. Once again, it was not the focal point of the discussion. And once again, people with quite divergent points of view found enough common ground to consider working toward common goals.
It would’ve been interesting, as a sort of malign experiment, if each person on stage had been forced to pick a side on the pipeline question. If all delegates, on arrival, had had to do the same, and then spend the entire conference wearing a colour-coded badge for whichever team they’d picked. I’m quite certain it would have inspired rancour and needlessly protracted argument on every panel, and ended all too many conversations among delegates before they began. It would have been no way to run a conference—or change a country for the better.
We’re better than the pipeline question. We proved that at Globe. We proved that at the first ministers’ meeting. We’re capable of so much more. But that pipeline question will consume this strange giddy momentum, devour it completely, if we let it. I hope we don’t. And I left Vancouver optimistic that we won’t.
