Paradigm Shift

 

To the 14th Premier of the Province of Alberta:

Dear Premier,

Welcome to your new office. Can’t say I envy the job you’ve worked so hard to get, but I’ll wish you well nonetheless. In any case, there’s an issue I’d like to take up with you.

I’m not sure if you can even see your desk for all the problems stacked all over it, but I’d like to talk to you about the biggest one, the bag of angry cats wrapped in a hornet’s nest that someone stuffed in that tar-smudged oil barrel sitting there in the middle of the room. Let’s talk about energy. Now, the contents of that barrel in your office are worth enough on the open market just now that it might seem less urgent than healthcare or wooing back Wildrose Alliance defectors. But make no mistake: the really big challenge facing you is energy.

It’s no accident the word itself is a synonym for power. Energy is your government’s biggest power source, its job creation engine and revenue pump, its claim to fame and its biggest headache. Alberta will define itself on the world map of the 21st century by how it handles its energy situation. So we need to talk about Alberta’s energy situation. The tarsands, in particular.

(Do you mind if I call it “tarsands,” by the way? You’re surely worried about the branding—we’ll come to that—but when I was a kid in Cold Lake in the 1980s and guys from high school dropped out to go work the rigs and came back driving shiny new Camaros, the place where they’d struck it rich was called the tarsands. When I say oilsands, I feel like I’m doing someone’s PR work for them. And I don’t think it’s necessarily our responsibility, as Albertans, to make oil companies feel better about their business in every situation.)

Alright then: the tarsands. Now, Steady Eddie talked and talked in those last months before he announced his resignation. He zipped off to Ottawa to tell Nancy Pelosi about the tarsands, and then a few weeks later he zoomed back from an energy conference on a special charter flight to explain the tarsands in person to one of the most powerful moguls in Hollywood. He chatted up European Union delegates and yakked with Anna Maria Tremonti on The Current. For six weeks last fall, one of those big, glitzy electronic billboards in Times Square flashed out a happy message about the tarsands three times per hour. There was the Alberta government, making its pitch among the blinking Coca-Cola and Cup Noodles logos in the heart of New York, New York—and you know what they say about what happens if you can make it there. Here’s what your government told Manhattan’s huddled masses: “A good neighbour lends you a cup of sugar. A great neighbour provides you with 1.4 million barrels of oil per day.” Cost the province $17,000, and Ed called it money well spent—so much so that he spent another thirty grand on another hurray-for-bitumen billboard in Piccadilly Circus in London. We needed, he said, to tell “our story” about the tarsands. Do you remember the tagline on those Big Apple billboards? It went like this: Tell it like it is.

So let’s tell it like it is.

Your government thinks it has an image problem. That’s why Ed was doing all that talking; that’s why his response to strident and sometimes quite technical arguments about the nature of operations in the tarsands was to polish up the province’s brand and put it up in lights on Broadway. But this isn’t ultimately about the message. You don’t have an image problem; you have a paradigm problem. You’re stuck in the energy paradigm of the First Industrial Revolution: extract the resource, burn the fuel, make money and leave a mess behind. You need to join the Second Industrial Revolution: limitless fuel, emissions-free, zero-waste, renewable. Sustainable in the real sense of that word.

It’s a big shift. Epochal. They named a high school after Ernest Manning and a provincial park after Peter Lougheed, but if you can pull this one off, you’ll outshine both of them. You can do it inside a generation using existing technology, with substantial net benefit to the province. In fact, you can do most of the paradigm-shifting work inside one electoral cycle, with a single piece of policy called a “feed-in tariff.” It’s an easily copied thing that was invented in Germany and has spread to more than 60 jurisdictions at last count. Ontario’s even got one. It creates jobs, builds a new industry, diversifies the economy and clears the air. You get green power and a piece of the fastest-growing and most dynamic tech sector this side of the Internet. It won’t cost you; it pays. It’s a way to join the conversation about the world’s energy future instead of trying to score points in an unwinnable debate. And the best part is that it doesn’t mess with the tarsands. I’ll come back to just how it does this in a minute.

Tell it like it is? Your government got caught napping. The money was so fast and easy during the boom that you didn’t really notice what was happening beyond Alberta’s borders. The rapidly intensifying scrutiny around how energy is made, what it does to the places it comes from, what it does to the climate of the whole planet when you burn it at the rate of 86 million barrels per day. The whole carbon footprint thing. “Dirty oil.” All that. I guess that’s why there was a motion at your party’s convention last year urging you to address the “image deficit,” and it’s why everyone in the oilpatch is so charged up about “managing the message.” It’s also behind those slick ads the Canadian Association of Petroleum Producers spent big bucks on, the ones showing nice folks doing good work in the tarsands. Because, after all, one in six Albertans is employed directly or indirectly in fossil fuels, and there were people starting to say some seriously terrible things about the kind of people who work in the tarsands.

Your government woke up with a whopper of a post-boom hangover in 2010. Found the place pretty much trashed. The mess the tarsands bacchanal left behind was suddenly everywhere. It was much, much messier—more complex, that is—than a couple hundred dead ducks. Even as BP’s blown well filled the Gulf of Mexico with spilled crude, billboards in the hippest neighbourhoods in London called the tarsands “the other oil disaster.” The European take on the tarsands was that it amounted to “the most destructive project on earth.” Municipalities in the US—Alberta bitumen’s biggest customers—and some very big companies with very long tentacles (FedEx, Avon, Levi Strauss) were threatening to boycott emissions-heavy oil. David Schindler was brandishing photos of deformed fish pulled out of the Athabasca River. And, yes, there were more dead ducks. James Cameron called the tarsands a “black eye” and announced he was coming to see it for himself, conjuring up fears of a Titanic wave of bad press and a global protest campaign. The day he arrived, the EU parliament was debating a motion to classify tarsands oil a “high-emissions fuel.”

You’re stuck in extract-the-resource, burn-the-fuel, make-money, leave-a-mess. You need to join sustainable.

It was, on the surface, a PR mess, and your government met it as such. The Ministry of Environment upped its spending on public relations by 54 per cent—while cutting back spending on actual monitoring and compliance by 26 per cent—since 2003. The billboards blinked over Times Square and Piccadilly. Ed met James and brought some EU big shots out to see the situation for themselves. Your government did a pretty good job, actually, of toning down the rhetoric: both Cameron and the EU folks had to admit the tarsands wasn’t actually “the most destructive project on earth.” But think about that: as far as the image battle goes, making the case that Alberta’s bread-and-butter industry isn’t quite the worst industrial disaster on the planet is what passes for “winning.”

This is how it is. James Cameron had a point, and it’s worth your time. This is a guy who manages billion-dollar production budgets and casts of thousands and next-generation technology and turns them into billions more in profit; he innovates as surely as Steve Jobs or Syncrude does. He actually said something pretty smart about the middle ground in this conversation. Bet you missed it, what with the Edmonton Sun’s front page screaming “DIPSTICK!” in hundred-point type and all. So find yourself a back issue of Time magazine. September 29, 2010. Cameron was asked if tarsands exploitation can be squared with serious action on climate change. Quoth the Dipstick: “That depends on the pace of that extraction and burning versus the pace of the conversion to a renewable energy economy.” The way he put it right after his meeting with Steady Eddie was like this: “It will be a curse if it’s not managed properly. It can also be a great gift to Canada and to Alberta.”

As you know, you’re sitting on the bounty of one of the planet’s largest proven oil reserves. An enormously important strategic resource, a cheque with a lot of zeroes on it that you can cash only once. You could use it to fuel the last best boom. Damn the torpedoes and full steam ahead, there’s a billion Chinese waiting to get their tanks filled. What do Europeans and Hollywood types know, after all, about what it takes to be what your colleague Ron Liepert called, in his inimitable style, “a proud super energy power”? Yup. You could do that. Or you could use that one-last-time bounty to buy enough rocket fuel to blast us into the front ranks of the Second Industrial Age.

I know, I know. You think you’ve got another way. A mavericky Alberta-advantaged sort of way. A billion Alberta taxpayer bucks in highfalutin’ research on carbon capture and storage. Green(-ish) bitumen upgrading. Better and better wastewater management. Tailings pond reclamation. The Ministry of Sustainable Resource Development. A great big fat transmission line for Alberta-born electricity, tethered to the inexhaustibly power-hungry grid of the USA. A couple more coal plants—“clean” coal plants—and maybe some (emissions-free!) nukes in the Peace Country. All that. Sure. Ever seen a pig wearing lipstick? You might be able to sell that dolled-up ham to your political base, but you can’t fool the world. Energy’s a global game, and you won’t win with spin alone.

This is how it is: the tarsands is a ravenous consumer of power, and it mates up with Alberta’s mostly coal-fired electricity grid to make the province as a whole a colossal greenhouse gas-spewing smokestack. The oilpatch alone generates 5 per cent of Canada’s greenhouse gas emissions and is the fastest-growing source of carbon dioxide nationally. Tarsands extraction uses enough natural gas annually to heat more than three million homes. (You could heat one in four Canadian households for what it takes to stoke the engines in the tarsands.) The industry is making great strides in water conservation, but it still swallows up a full 2 per cent of the Athabasca River’s flow. At the other end of the extraction cycle, 1.8 billion litres of toxic wastewater pour into tailings ponds per day, creating, collectively, a lake 130 square kilometres and growing. (If it were one big pond, it’d be the twelfth-largest body of water in the province.) The dam holding back Syncrude’s tailings is one of the largest on the planet.

The industry claims big gains in reclamation, and some of those claims do hold water, but the poster boy—the only certified reclaimed land in the whole tarsands to date—is a 104-hectare speck covering roughly 0.2 per cent of the total disturbed land in the Athabasca region. Also, it was never actually a mining site, just a holding area for moved earth. The shrillest of your critics say tarsands oil creates three times as much greenhouse gas per barrel as conventional crude; your government and the industry itself were correct to point out that over the entire life cycle of the barrel—the only measure that actually matters on the scale of the earth’s climate—that figure is much lower. It might even be as low as 5 to 15 per cent more greenhouse gas per barrel, as the industry analysts claim, though it’s more likely closer to the top end of the 8 to 37 per cent range reported by the Natural Resources Defense Council (or even the 82 per cent figure the US government’s Environmental Protection Agency has quoted).

Regardless, take any of those figures and triple them, because your government’s own stated production target is 3.5 million barrels per day by 2020. And even if it all isn’t particularly dirty as oil goes, and certainly not the most destructive thing on earth all by itself, it’s far from sustainable. This is how it is: the tarsands is the final chapter in the story of the First Industrial Age. It’s vital to the energy picture (and the provincial economy) of the next decade or two at a minimum. And the industry extracting it is attempting, in fits and starts, to become a more responsible environmental steward and all that. Sure. But the tarsands is intrinsically, irredeemably problematic. A necessary evil.

The industry knows this, by the way. There was, for example, an article in The Economist not long ago about the tarsands controversy noting that “in private,” anonymous oil executives were quick to point out that the industry is being hampered and weakened by “lax regulations,” whose passage is your job, not theirs. (This is consistent with my own private conversations with industry people, for what that’s worth.) When the oil industry’s asking for tighter regulations, “lax” is a pretty gentle way of describing the ones you’ve got. (Please don’t mention your carbon tax. Please don’t mention your toothless intensity-based carbon tax, which not even the industry itself will gussy up with enough gloss to suggest it could possibly result in an actual reduction in overall greenhouse gas emissions.) In the absence of government leadership, a handful of oilpatch players—Suncor, Statoil, Total E&P and ConocoPhillips—went and formed their own Oilsands Leadership Initiative for the express purpose of trying to change the actual environmental costs of their operations, as opposed to the perceptions of them in the eyes of random Times Square passersby.

There’s even evidence there’s awareness of this stuff in the back corridors of the federal government. You find any time on the campaign trail to read WikiLeaks? Well, a particularly telling cable in that great digital pile was one from the US ambassador to Canada, advising President Obama to be aware that Jim Prentice, then the environment minister and honourable member for a riding containing many thousands of oilpatch employees, was deeply concerned about the repercussions the tarsands mess might have for Canada’s standing in the world. Prentice was, the US ambassador reported, ready to press for stronger federal oversight. (He, of course, quit the government not long after this was reported.)

Now, what about your guys? Well, your Energy Resources Control Board has said it won’t regulate the industry’s growth, because controlling energy resources in such a manner is not its job—which made everyone not on the ERCB wonder just whose job it is, then. Your predecessor’s cabinet, meanwhile, mostly mouthed platitudes about being proud to be a “super energy power” and delighted to report the oilpatch’s long record of sound environmental stewardship. It did nothing else to suggest it’d heard the widespread criticism inside the oilpatch and beyond that your government’s approach to tarsands regulation is best characterized as asleep at the switch. (Actually, I prefer the term “abdication,” as in “the ERCB has abdicated its authority to regulate the industry.”)

Your government’s plan for the province’s own energy needs shows evidence of even less foresight than your plans for the oilpatch. Your predecessor’s hydrocarbon-centred plan is to run fat transmission backbones from Calgary to Edmonton and from Edmonton to the oilpatch, with some unspecified mix of giant power plants fired by coal and/or natural gas and/or radioactive fuel rods to feed the province’s growing electricity needs (and perhaps create a bunch of excess juice for profitable export south of 49). The supposed need for this stuff is based on two specious assumptions: that the energy grid and the demand curve of the next 50 years will look pretty much like that of the last 50, with huge, centralized, fossil-fuelled plants sending juice across vast empty spaces to urban and industrial centres; and that fuel costs will remain ultra-low and efficiency efforts and decentralized renewable power will stick to the do-gooder fringe.

The tarsands will be a curse if not managed properly. It can also be a great gift to Canada and Alberta.

This is a 1950s approach to the 21st century’s energy needs, a Fonzie scheme, a whack on the energy jukebox in a roomful of iPods. The transmission lines themselves are stirring up legitimate anger among landowners up and down their lengths, because whatever logic is driving the urgent need to erect high-voltage towers on their land was never really explained to them. The kindest estimate of the hit every single Alberta energy consumer will take on her power bill is something like $100 per year. Enmax, which sends bills to hundreds of thousands of Albertan households, says it’ll be more like $300. Even if coal and gas plants spewed fairy dust and nuclear rods were made of cotton candy, this would be a pretty big surcharge on more of the same. As it is, it promises to tether the province to at least $10-billion worth of a business as usual that fewer and fewer experts outside Alberta believe has a future long enough to justify the 20-year-minimum lifespan of the power lines and the fossil-powered plants proposed to feed them.

Understand: Business as usual in the energy game has ceased to be, and none of the problems it has created can be solved with PR alone. Like I said, you don’t have an image problem. You have a paradigm problem.

Do you read the International Energy Agency’s annual World Energy Outlook? If you don’t, you really should, as the political leader of a super energy power and all. Anyway, here’s what the 2008 report said: “Current global trends in energy supply and consumption are patently unsustainable—environmentally, economically, socially.” That is how it is: patently unsustainable. Look as closely as you want and you still won’t find any asterisk or fine print declaring the statement void for super energy powers with quite a lot of bitumen buried in their boreal forests. And in case this was at all ambiguous, the 2009 IEA World Energy Outlook simply declared this: “The days of cheap energy are over.” Again, no caveat exempting bitumen boomtowns.

Did you hear old Dmitry Medvedev—the President of Russia, overseer of Europe’s biggest petrostate, a man about as far from an environmentalist as you can get without actually being Dick Cheney—did you hear Dmitry after the worst wildfires in recorded history forced his country to suspend grain exports? No? Here’s what he said: “What’s happening with the planet’s climate right now needs to be a wake-up call to all of us, meaning all heads of state, all heads of social organizations, in order to take a more energetic approach to countering the global changes to the climate.” That’s the President of Russia, a nation with an economy built on wheat and fossil fuel. Think that has any relevance to your oilpatch on the prairie?

Or how about that report from Canada’s own Environmental Law Centre, the one specifically looking at coal-fired power in Alberta? It noted that your government was “virtually powerless under current legislation to prioritize lower impact energy.”

Let me tell you my own most telling moment living under this asleep-at-the-switch energy regime. I was invited to the grand opening of Walmart’s new regional distribution centre in Balzac. It’s basically a giant refrigerator-freezer out there by CrossIron Mills, and it’s the food warehouse for Walmarts across western Canada. It’s also a global model of clean-powered, hyperefficient industrial design, intended to be the template for new facilities everywhere there are Walmarts, which is damn near everywhere on earth. They put up a bunch of explanatory posters in the lobby so visiting dignitaries and executives would be clear about how it uses solar energy and recycles the waste heat from its cooling system and powers its forklifts using emissions-free hydrogen.

The notice about the hydrogen fuel is quite something. Turns out they’re trucking it in from Quebec, because even hydrogen made from emissions-free electricity in Quebec and trucked across the country creates less greenhouse gas than using Alberta’s outmoded grid would. Here’s what it says on the poster: “As Alberta increases its renewable energy production and decreases its coal energy generation, manufacturing hydrogen in Alberta may become a more viable option.” I like the friendly neighbour optimism there, the expectation of change. You know what that really is, though? That’s the world’s largest retailer telling you your energy policy is, as the IEA said, patently unsustainable.

There’s a conversation here, and it isn’t about good oil-exporting neighbours telling it like it is, and it isn’t being conducted exclusively or even primarily between the Alberta government and some ill-informed European environmentalists. Line up just the participants I’ve had room to mention: Walmart, the President of Russia, the European Union, the IEA, the Oilsands Leadership Initiative, and of course James “DIPSTICK!” Cameron. A more exhaustive list would have Arnold Schwarzenegger on it, the California and Ontario governments, the Chinese in general (who lead the world in the burning of coal, but also in the production of solar panels, wind turbines and electric cars) and India’s National Solar Mission. Britain’s Conservatives and Germany’s right-wing government and, well, basically all of Europe. Australia, which just passed a carbon tax. I’m sure I’m forgetting a few, or a few hundred million.

This is a conversation about change, not about image. It’s about the energy paradigm of the 21st century, which by necessity will be about oil only insofar as it can hasten the shift to emissions-free sources of power. This conversation is not going away, and it will define Alberta’s future regardless of how we tell our tarsands story. And Alberta, super energy power though it may be, is entirely absent from this conversation at present.

The quickest way into the global energy conversation is a “feed-in tariff.”—a transformation engine.

The quickest way in, with the best side effects, is a feed-in tariff. It is a transformation engine. It creates a huge price incentive to substantially expand the amount of renewable energy on the electricity grid, and it guarantees the green-power market for long enough that renewable energy companies can set up shop and start manufacturing at industrial scale. It’s been applied at municipal scale (in Gainesville, Florida, among other places), at provincial scale (in Ontario in particular) and at national scale across Europe and around the world. It was born in Germany, where it has created 300,000 jobs and a $40-billion-plus industry in just a decade—this in a country with nowhere near as much windy plain as Alberta has, and no corner as sunkissed as southeastern Alberta is.

What’s more, Germany did all this without direct taxation, instead bumping up the cost of a kilowatt-hour of electricity nationwide to the point where it amounts to a surcharge of about $50 per year for the average German homeowner. That’s half the estimated best-case per-consumer cost of your proposed transmission lines. Plus it decentralizes and distributes power generation to the point where outsized transmission superhighways become a thing of the past, while introducing an enormously promising new revenue stream to rural and urban Albertans alike.

Everyone likes to say renewables can’t scale up to industrial size—as opposed, for example, to nukes (which your government has been seriously investigating). But Germany added a nuclear power plant’s worth of solar energy to its grid in just the first eight months of 2010, whereas if you commissioned that dodgy Peace Country nuclear plant tomorrow, I guarantee it won’t be grid-connected before 2020 (and if I were a gambling man, I’d factor in the recent Japanese disaster and say not before 2030 as a safe bet). Bottom line: the feed-in tariff is a real road to “becoming all things energy,” as your predecessor’s cabinet liked to bray. It’s a proven route to diversifying the economy. And it would provide an incomparable story to tell to visiting Hollywood moguls.

Here’s the tale that would be yours alone to tell.

Hey, Jim, you could tell that Cameron fellow, I want to tell it like it is.

Look, Jim, we get it. We know the tarsands aren’t all that good for the hometrees of the boreal forest. We know that another boom governed by an order of “Full speed ahead!” would guarantee us a catastrophic meeting with that climate iceberg out there. We get it. We’re sitting on a vital strategic resource, and we just upped our royalties to somewhere closer to the global petrostate average, and we’ve got a sustainable technology fund earmarked exclusively for cleantech. Some carbon capture, yes, but also some amazing waste-to-energy stuff on our farms, an ambitious geothermal scheme that takes advantage of our world-class expertise at drilling holes, and some amazing new developments in solar and wind that take advantage of Saskatchewan’s abundance of rare-earth metals. (Come on, Jim, I thought you were a sci-fi guy. You didn’t know Saskatchewan sits on some of the world’s richest deposits of the raw materials they need to make wind-turbine magnets and electric-car batteries?)

But listen, Jim, that’s just the tip of the iceberg. The big thing is we’re global leaders in renewable power. We’re committed to the new paradigm. We’ve got this feed-in tariff, and we are filling the province with wind turbines and solar arrays. We’ve even got an extra incentive for homeowners, so solar panels on the roof are hotter than hot tubs and hipper than granite countertops in Calgary and Edmonton. These people work in the oilpatch, too, but they live by green power’s light. We’re building houses that make more power than they use, Jim. Some of those folks have electric cars now, too, and we brought in time-of-use pricing on their power so they fill up on the cheap when demand’s low at night, and then they drive to work and sell off their spare juice at a profit when everyone needs it at midday. Best smart grid in North America.

We want to lead this transition, Jim. A grandkid born to a tarsands titan today can’t possibly expect a lifelong career in the oilpatch. We get it, Jim. We’ve partnered with big utilities across the prairies to maximize the benefits of both small-scale renewables and large-scale hydro, and our collective western Canadian grid will be verging on emissions-free by the time Avatar 3 hits the theatres. Some of our oilpatch partners—Statoil and Shell and Total, in particular—have been crazy-keen to play with this cleantech stuff for years, so we’ve set ourselves up as their best test bed. Now, when they go home and hear jeers from their shareholders about dirty oil, they point to pictures of solar farms and state-of-the-art geothermal heat pumps. Some of them even buy carbon offsets from our clean energy companies. We’ve got net-zero bitumen mining and upgrading. How about that?

Heck, Jim, we’re talking about frugality, stewardship, thrift, innovation. Entrepreneurial zeal and community spirit. Prairie self-reliance and a maverick’s self-confidence. These are conservative values, Jim. Our values. Not just Norway’s, and certainly not Hollywood’s. We own the future. Our citizens live in houses that make their own power and go to work making power plants for the world. Bring a camera crew next time you come, Jim—we’ve got a movie we’d love you to make.

Anyway—to come back to you, Premier, and the energy challenge you face—I hope you can understand how if you solve the paradigm problem, you won’t need to worry near as much about your image. The paradigm’s shifted, and your economy’s hitched to a twilight industry. Don’t just tell the story, change the story. Make history. Own it.

Calgary-based Chris Turner is the author of The Great Leap Sideways and The Geography of Hope (2007).