Oil: our blessing and our curse, and what can be done about it | Commentary

By Hugh Holland

The blessing

The first oil was discovered by the Chinese in 600 B.C. and transported in pipelines made of bamboo. Global population was about 200 million people. In 1850, geologist Thomas Hunt reported oil seeps from swampy “gum beds” in Lambton County, Ontario. That became the source of North America’s first major oil boom. It was followed by a discovery of oil in Pennsylvania in 1859, and Texas in 1901. Those discoveries set the stage for a new economy. Petroleum was much more adaptable, cleaner, and more flexible than coal and horses.

By 1804, world population had grown to one billion and land transportation was mainly by horse. City streets around the world had become unhealthy open sewers that polluted the waterways every time it rained. The 1885 Benz Motorwagen is widely regarded as the world’s first production automobile. Henry Ford’s 1905 Model T revolutionized auto production and resulted in much healthier transportation infrastructure.

Both the British and German navies converted their fleets from coal to oil, and Iran and Iraq were main sources of oil, but also conflict, during WW1. In 1938, an American oil company in Saudi Arabia drilled into the largest source of petroleum in the world. Europe has relatively few oil and gas reserves and many countries have been dragged into the ongoing competition and conflict over Middle East oil during and after WW2.

Indigenous people introduced the Athabasca oil sands to the Hudson’s Bay company in 1717, but serious development did not start until the early 1970s when Canada’s oil reserves became known as the third largest in the world. Oil became Canada’s number one export and royalties became a major source of government revenue. That catapulted Alberta from being a major recipient of interprovincial equalization payments to being a major provider. In 2019, Alberta’s GDP per capita is $81,000, or 33 per cent above the national average, allowing Alberta to be the only province with no provincial sales tax.

The curse

Unfortunately, Alberta’s unnecessary fear of losing those big advantages has become a curse that is dividing citizens in one of the top-rated countries in the world. In 1988, global population had reached five billion and the UN established the Intergovernmental Panel on Climate Change (IPCC) for advancing knowledge on human-induced climate change. Thirty-four years later, global population is 7.8 billion and the world’s top 2,500 climate scientists are telling us that we must achieve net-zero emissions by 2050, mainly by reducing the burning of coal, oil, and gas, to avoid catastrophic effects of climate change.

Governments in every country, whether left, right or centre, are under pressure to do their part. Canada is especially under pressure because our emissions per capita are among the highest in the world. Seventy-five per cent of Canada’s emissions come from processing oil and gas and burning them for transportation, mobile equipment, and residential, commercial, and industrial heat. The 500,000 workers in Canada’s oil and gas industry are feeling insecure because of that pressure. Although those jobs are spread across the country, that insecurity has sadly become a major source of division between the people and provinces of Canada, and between countries.

What can be done about it?

At the root of the problem are the irrational fears and beliefs that pit extreme politics against science. That is now a main cause of civil unrest events in many countries, including the recent border blockade and 22-day occupation of Canada’s national capital. That underlying unrest is easily exacerbated by other pressures like the COVID-19 pandemic.

Far-left thinkers have an irrational faith that wind and solar alone can supply the world’s energy needs, and an irrational fear that nuclear energy is too dangerous. There is no real-world evidence that supports either belief. Far-right thinkers have an irrational faith that climate change is a hoax, and that finite reserves of oil and gas will last forever. Again, there is no real-world evidence to support either of those beliefs. And there are uninformed and unscrupulous opportunists using the internet and social media to exploit both the far-left and the far-right.

That is a tragedy because if they really gave a hoot about what kind of world their grandchildren will live in, they would stop the senseless bickering, and go hell bent in building every possible source and use of clean renewable and nuclear energy before we run out of finite oil and gas. That debilitating unrest can only be quelled by fair-minded moderate leaders who can work together to create a rational and resilient vision for the next 50 years.

Some oil and gas will continue to be needed for decades, but the enormous efficiencies now available in electrified transportation and mobile equipment, co-generation of electricity and industrial heat with emerging small modular nuclear reactors (SMRs), and efficient buildings and heating systems, can greatly reduce energy consumption per capita, and avoid the worst effects of climate change. All vehicles and mechanical equipment are normally replaced as they wear out on a 10-year to 30-year cycle. The incremental cost of replacing old tech with new tech is significant but entirely affordable, if the money is not wasted for lack of a rational vision.

Those replacements will provide more than enough good jobs. Canada’s industry, in particular our oil and gas industry, has all the expertise and resources it needs to be a world leader in a rational and gradual transition to a great future. What is needed most is less selfish political squabbling and more political responsibility and cooperation.

Clean and abundant wind, solar, and nuclear energy, and hydro where available, using hydrogen for energy storage, offers the potential for every country to become self-sufficient in energy. That could eliminate the competition for dwindling oil and gas resources that is causing conflict, poverty, and mass migration for millions. Wouldn’t that be a better legacy for leaders?

Hugh Holland, P. Eng. (retired) Huntsville, Ontario

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