Canada’s hidden energy crisis — it’s real, it’s urgent, and the answer is right in front of us

by: Merran Smith

Over recent weeks we’ve seen Prime Minister Harper and Minister Oliver calling opponents of the proposed Enbridge Northern Gateway Pipeline names, creating polarizing rhetoric which simply pushes Canadians to harden their position “for” or “against” the project.

This is not the right conversation. Beyond our borders, a more profound one is taking place.

A global energy transformation is underway. It is a move from oil, gas, and coal—polluting fuels that we dig, drill, sell, and ship—towards clean, safe, and locally available energy sources that will never run out. This change won’t happen tomorrow. But over the next 20 years the shift will unleash big changes in how people live, work, and get around. And the implications for Canada are profound.

President Obama’s decision to deny a permit for the Keystone XL pipeline is a sign of the changing times. The oil industry is treating the decision as a setback. But the decision is more than a setback, it is a signal—that people want a change in our energy systems.

Here is another sign: the United States plans to roll a million electric vehicles on U.S. highways by 2015. Gasoline use remains flat, and though many American cities are designed around freeways and suburbs, younger Americans may be reconsidering their century-long love affair with the car. According to the Transportation Research Board—a division of the National Research Council—Americans between 20 and 40 drove considerably less in 2008 than their counterparts did in 2001.

A fast-growing China will no doubt increase its oil consumption in the coming decade. But China plays the long game, and is making massive investments to wean itself off petroleum. Last fall, a Chinese senior government official said his nation will invest $313 billion to promote a green, low-carbon economy in the coming five years.

China isn’t the only one looking to the future. In 2010, for the first time, worldwide private capital investments in renewable energy surpassed those of fossil fuels. According to Bloomberg New Energy Finance, that year investors poured $187 billion into wind, solar, tidal, and biomass, while they invested $157 billion in natural gas, oil, and coal.

Bloomberg estimates that investment in renewable energy projects will reach $395 billion by 2020, and $460 billion by 2030. The shift will mobilize nearly $7 trillion of new capital within the next 20 years.

A good chunk of that opportunity is ours to claim. Canada is well positioned to take advantage of this global shift. We have excellent universities, a history of innovation, a wealth of natural resources, and a stable financial system. But we are still playing yesterday’s energy game.

We are doing so at our own peril. If people can meet their daily needs for transportation, heat, and hot water in ways that are cleaner, safer, and cheaper, then they will do so. Recall what happened to the video-rental market. A technology—high-speed Internet—gave people an easier, cheaper way to watch movies. The retail rental industry did not recognize this change and adapt. As a result, it collapsed.

Today, Canada’s oil wealth helps pay for our schools, hospitals, and more. But if we do not make the right investments and policy decisions today, we will find ourselves not only sidelined in the new energy economy, but also scrambling to find a way to replace jobs and pay for our social services. This is Canada’s hidden energy crisis.

There is an obvious answer: We need to set aside a portion of our oil wealth to help us prepare for—and ultimately play a leading role in—the global shift to cleaner, greener, and locally available energy.

While Edmonton and Ottawa insist Keystone is another reason to press the accelerator on Northern Gateway, they should bear in mind that it signals something bigger. The world is dropping hints about the shape of things to come. It is high time we heeded them.

Merran Smith is the Director of the Tides Canada Energy Initiative (@TidesCanEnergy), which is working to transition Canada to a low-carbon energy future.