Monthly Archives: February 2020

The Unsolved Riddle of Everything: Thoughts on the withdrawn Teck Resources Oil Sands Project

Today, when I heard about the company’s withdrawal, I wrote an e-mail to Canadian Prime Minister Justin Trudeau and Alberta’s Premier Jason Kenney. It said:

Dear Prime Minister and Premier,

I am writing to congratulate you both on the happy outcome of this matter. It is difficult to see how it could possibly have worked out better for both of you.

Mr. Trudeau, you have been saved from the need to make a decision about a project that did not yet exist except as an idea. It is difficult to see how you could possibly have made any decision that would not have caused trouble. I did think it odd that you and your colleagues, on behalf of the Canadian people, were being asked to approve a project that was entirely hypothetical. What could you possibly have said, except that years from now, when the company provides details, you, assuming you are still the government of the day, promise to look at them very carefully with due regard for benefits, costs, and the net public interest? I am delighted you been rescued from this necessity, although possibly not as delighted as you are.

Mr. Kenney, while I sympathize with your loss of this particular dream, I am sure you are aware that the people of Alberta have many dreams that you can help them pursue. They may not be as big as this one, but they are within reach as this one never was. I speak from experience, because I was an Albertan myself for twenty-five years, as my children and grandchildren remain. I always found Alberta to be fertile soil for my dreams, which took me from the Cypress Hills to the Crowsnest Pass, from Rainbow Lake to Fort Chipewyan, and just about everywhere in between, talking to people in their communities as they tried to understand what was happening and to make decisions.

I make no judgement as to whether there should or should not be another massive oil sands project on the lower Athabasca. I was there for Syncrude, and know something of the complexities: technical, economic, environmental, social, cultural, and political. It was my job at the time to know them. Of course circumstances may have changed, but I suspect the underlying reality has not: that the benefits of these massive projects are immediate and ephemeral, and some of their very real costs slow to reveal themselves and possibly permanent. I also believe that they bring opportunity costs with them that may never be directly observed, because they are the things that did not happen as the massive project took all the attention and money, and did not leave them room.

I believe there will always be an oil economy in Alberta, because that’s where the oil is, and because oil, in some form, is such an amazing gift of Nature that people will always be able to find uses for it, no matter what happens to specific uses along the way. My experience tells me, however, that producing raw bitumen and shipping it elsewhere in bulk for low margins is an extreme form of the Old Oil economy, and that dreaming, and inventing, and investing, ought to focus on the New Oil economy and all the potential it offers. I don’t pretend to know exactly what the New Oil economy looks like, but I suspect it will be more creative, more value-added, more human-scale, more beneficial, with fewer costly externalities, than any mining and shipping of raw bitumen can ever be.

The people I met in the resource industries of Alberta were very smart people indeed. I suspect they know that the Old Oil economy and way of thinking is going to be replaced by New Oil, and they passionately want to be part of it. I respectfully urge both of you, Prime Minister and Premier, to get behind those people and to help them put Old Oil out to pasture, along with the people who cannot see beyond it. We can argue about the past merits of Old Oil, and whether its huge accomplishments out-weigh its ultimate costs, but the evidence now seems overwhelming, for many different kinds of reasons, that its day is done.

Out with Old Oil, Old Politics, Old Journalism, Old Thought. In with New!

Thank you for listening.

A few subsequent thoughts:

1. I do not blame the company for this decision, but I do for having kited this project in the way they did, and getting Premier Kenney and others all worked up about it. I do congratulate them on having the grace to withdraw it. I suspect, however, there is a strategy of some kind being played out. I have no reason to believe that a company of this stature would truly offer Canadians a pig in a poke, and expect anyone (except Premier Kenney perhaps) to want us to buy it. Teck Resources has done us all a favour. I wonder what the quid pro quo will look like, when they present that.

2. I see no future in massive energy projects. They are intensely political, and the politics have become bad. They have always worked on the assumption that their short-term economic benefits matter, and that their environmental and social costs do not. Anything and anyone that gets in their way can be pushed aside. They hold governments and peoples hostage: do what we want, or we’ll pull the plug. Fortunately this company did that long before they had even started to fill the tub. That is refreshing and unusual. The usual phalanx of loud supporters who would have invested in expectation can surely not have got around to it yet, at least on any large scale. Few should be hurt by yesterday’s decision.

3. We should not get trapped into thinking that huge projects are the only possible channel for investment, even in energy projects. While controversy may swirl around large projects, making them highly visible, smaller ones are going on all the time. We just don’t notice them. Statistics Canada does. We need to pay more attention to the macro-statistics and to understand what they are saying.

4. We should not get trapped into thinking that there are pat solutions to the Unsolved Riddles of our time, we are legion. A recent CBC opinion column spoke of people’s impatience with the inability of the Federal Government to articulate a policy that would occupy the space between the contradictory extremes of our Unsolved Riddles. Policy can clarify the extremes, and specify their relative importance. The space between them cannot be generalized. It is discovered, issue by issue and project by project, through the application of human ingenuity and conversation, a continuous creative process.

5. A little patience and understanding would go a long way towards lowering the pressure, on all sides.