Electrocuting the Alberta Oil Patch

What Happens If Western Canadian Alienation Becomes Obsolete?

According to University of Calgary political scientist Barry Cooper, there is quite a bit of anxiety and anger coming from western provinces, which will be expressed at the ballot box during today’s Canadian federal election.

In an article for CBC news, Cooper claims that “Alberta and Saskatchewan have been labouring under the misconception that we are equal provinces that have contributed an enormous amount to the welfare of the country. While ‘Laurentian Canada’ just seems to think we’re there to be exploited.” He also shares the source of the frustration: “It’s not Liberal or Conservative, it’s really economic and regional. It has to do with the interests of the provinces, and they are tied to the oil patch.”

In the Great White North, “Laurentian Canada” refers to Ontario and Quebec — the two largest provinces by both geography and population and the traditional centres of federal political power and influence. The belief that decision-making in Ottawa is driven by the interests of the central Canadian political class has dominated the national conversation since at least the time of the first Trudeau prime minister, Pierre, who first came to power in 1968. It was his Liberal government that created the National Energy Program (NEP) in 1980, which was seen by some at the time as a gross infringement of provincial rights meant to unfairly redirect the financial windfall of the Alberta oil patch to central Canada. The NEP was a fateful policy choice made by Pierre Trudeau that alienated western provincial governments and their voters while confirming their worst fears about the federal Liberals (led by a French Canadian and viewed suspiciously as agents of the Toronto-Ottawa-Montreal political elite). It also led to the Liberal Party of Canada becoming anathema as an electoral choice on the Canadian prairies ever since.

Why is this important? In the 2015 federal election, the Liberals under Justin Trudeau won just five of 48 available seats in Alberta and Saskatchewan, while the Conservative Party of Canada (historically the party that represents western alienation in Ottawa) claimed 39 of those seats — a result that was seen by some as a decent one for the Liberals. Thirty-five years after the implementation of the NEP, the party of the Trudeaus continues to struggle west of Ontario and east of British Columbia. This situation is unlikely to change in today’s vote, as the Liberals are polling well behind the Conservatives and in a statistical tie with the New Democratic Party in the three prairie provinces. In short, a path to a majority government for Justin Trudeau in 2019 is narrow in part due to his party’s enduring weakness in this region of the country.

If the west has felt frozen out of the corridors of power in Ottawa to date, can we imagine the fallout should the reason for their grievances — the financial impact of the oil sands on Canada’s economic outlook — become less and less important in the years ahead?

In today’s society, the internal combustion engine literally drives our economy. Although some consumers have purchased electric and hybrid vehicles in recent years, the overwhelming majority of cars, trucks, vans and buses on the road today rely on fossil fuels to power them. So long as this remains true, the oil and gas industry will maintain its central place in the global economy, which also means that Canada’s oil production (and the resultant debates about transporting it to market, the industry’s impact on climate change, the role/necessity of carbon taxes, etc.) will remain relevant to the national discourse.

However, what happens to deeply-held grievances, particularly in Alberta, if the internal combustion engine no longer holds a central place in the vehicles of the nation? Once thought to be the stuff of science fiction and engineering fantasy, mass production of electric automobiles that cost less than traditional fossil fuel-powered transport has suddenly come into clear view on the horizon of possibility.

As Steve LeVine noted in a article he wrote last month, the time when we will be able to mass produce new electric vehicles at a scale that rivals combustion engines is nearly at hand, due to rapid improvements in the main holdup to such ambitions — battery technology:

A decade ago, a lithium-ion battery cost more than $1,100 kWh, the measure for energy density. At the time, the U.S. Department of Energy set a goal of $100 kWh, a milestone that, if reached, would elevate electrics into a head-to-head battle for primacy with combustion cars. To those like me hearing the goal at industry conferences year after year, it seemed all but absurd. Never did I hear a researcher suggest it was possible.

Yet, according to a recent study by BloombergNEF, a renewable energy research firm, we are almost there. Last year, the cost declined to an average of $176 kWh. Within five years, it will drop to under $100, BNEF says.

As a result of this innovation, the article estimates that by the year 2040, “electrics will win the war with gasoline: 57% of all new U.S. passenger vehicle sales will be electric and, globally, electrics will comprise almost a third of all cars on the road.”

Photo by Marvin Meyer on Unsplash

This estimate may even be on the (small-c) conservative side, as carmaker Tesla announced this past spring that it expects to have a fleet of one million robotaxis on the road by 2020, informed by the mountain of data it has collected on every vehicle it has placed on the road for the past several years. This data advantage, coupled with the cost-effective data collection features it builds into its vehicle production process, means the self-driven electric cars of the future can be operated nearly 24 hours a day and earn more money than they cost when used in a carsharing capacity. Assuming the software capability can be rolled out at the rate Tesla CEO Elon Musk envisions (which is a big if, given the inevitable regulatory and industry backlash in opposition to such a proposal), the electrification of the auto industry could come fast, furious, and far sooner than most people imagine.

These advances and innovations will place real stress on the oil and gas industry of the future. The challenge will not come from the ongoing discussion of whether or not the world has hit “peak oil” but rather from whether anyone will be burning fossil fuels at all in 50 years as the electric vehicle becomes the cheaper and cleaner alternative.

This will have real-world impacts on the Canadian federation should it come to pass. Cooper says Western sentiment has already surpassed alienation and is heading straight toward separatism, with much of the anger engendered by the lack of progress on building new pipelines to move Alberta crude to the coasts and therefore to market. What happens if pipeline expansion comes to be viewed as a poor investment for the federal government, which now owns the Trans Mountain pipeline? A more rapid than expected conversion of the auto industry to electric cars over the next decade would negatively impact the oil-producing economies of not just Alberta and Saskatchewan, but also Newfoundland and Labrador, which would unleash unknowable forces into Canada’s federal-provincial relations, as well as the national economy. It could also portend ominously for central Canada’s auto manufacturing industry as it faces uncertainty around future production needs. In short, the political and economic calculus would be shifted irrevocably by global forces beyond easy government control.

If this set of circumstances were to come to pass, the basis for western alienation would internally combust as demand for its main export dries up. There is little evidence that such a possibility is being taken seriously by governments in Edmonton, Regina and Ottawa. It is certainly not on the radar in today’s federal election. As the push for greater attention to the climate crisis continues to gain steam in Canada’s politics, perhaps the threat electric vehicles pose to the automotive manufacturing and oil and gas industries in this country will receive more attention.

In the meantime, a new generation of voters in the western provinces will once again hold a Trudeau accountable for energy policy approaches that stoke their rage. One day, it is to be hoped, they can look beyond that now-reflexive anger at the Liberal Party of Canada to take heed of the electrical storm gathering on the horizon, and figure out before it’s too late how they’re going to deal with it when it arrives with full force.

Follow Greg on Twitter, Instagram & Medium (@greg_frankson)

Poet, Educator, Social Commentator & Speaker • Presenting the vision that inspires others to positively change the world • raiseyourvoice[at]voiceshareinc.com

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