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More oil, less environmental law wrong recipe for post-COVID-19 Canada | David Israelson

Tuesday, July 28, 2020 @ 1:55 PM | By David Israelson


David Israelson %>
David Israelson
As Canada and the world contend with the COVID-19 pandemic and the economic turmoil it has brought, many people have ideas on how to bring back growth and jobs. There’s no shortage of thought — unfortunately, some of it is, well, not quite thoughtful enough for what we need to emerge from this mess in better shape.

Near the top of the not-so-thought-out category comes a new report by the Fraser Institute, Stimulating Economic Growth Through Abundant Energy. Well, here we go again. The gist of this report is that any policies that restrict rampant energy use will tamp down the post-pandemic recovery.

It’s the environmentalists’ fault, the Fraser Institute report contends.

Let’s give some credit for brazen candour to Elmira Aliakbari, associate director of the Fraser Institute’s natural resource studies and her co-authors — they explicitly blame conservation laws and policies for spoiling Canada’s pollution, sorry, energy blowout bash.

“Federal and provincial governments in Canada have implemented policies that have artificially constrained energy accessibility and increased energy costs. The Ontario Green Energy Act, British Columbia’s energy conservation programs, and the federal government’s renewable energy targets are some examples of these types of policies,” the authors say.

The Fraser Institute thinks the way out of the COVID-19-induced economic canyon is “energy abundance.” Drill, pump, sell. “Policies that restrict energy availability and/or increase energy costs will constrain Canada’s economic growth,” the think tank says.

Well … there doesn’t seem to be a lot of deep thought coming from this think tank here.

There are several problems with their analysis of the relationships between Canada’s energy industry, environmental laws and regulation and economic growth and stability.

The report’s first problem is its sloppy, one-sided analysis of the legal and regulatory regime that it claims is harmful to the energy industry and constricts economic growth. The Fraser Institute’s golden thread of “bad” environmental laws is more like a twisted piece of woolly thought.  

For example, the Fraser Institute’s examples of harmful laws and policies include Ontario’s 2009 Green Energy Act, which was repealed by Premier Doug Ford’s Progressive Conservative government. Meanwhile, by the Fraser report’s own admission, since 2018, the Ford government has cancelled 758 renewable power contracts. How on earth does this promote the “energy abundance” the Fraser Institute seeks?

The report also criticizes “policies that aim to cut or constrain energy use” because these “limit the growth of income in Canada.” They call for re-examining the 2019 federal Energy Savings Rebate program, which offers rebates for Energy Star appliances, as well as higher efficiency standards brought in for windows, space heaters and water heaters.

Anything that lowers the “demand side” — that is, encourages less energy use — seems to be suspect. The Fraserites want a rethink of all those pesky climate change goals, such as federal and provincial programs aiming to reduce greenhouse gases (GHGs) from electricity within 10 years.

The second problem, after sloppy thinking, is that this “economic” analysis is not thought out in the context of what appears to actually be happening to economies as a result of the COVID-19 pandemic.

COVID-19 lockdowns and restrictions present an often horrifying economic challenge, with people losing their jobs, businesses at risk, spending down, tenants unable to pay rent and landlords unable to maintain their livelihoods.

But this crisis also presents opportunities.

Businesses are rethinking their supply chains, workers are wondering if they will really need to drive three hours or fly across the country to watch a PowerPoint they could see on Zoom. Cities — the smart ones at least — are considering if they might devote less real estate to cars and parking and more to pedestrians and cyclists.

All of this — less driving and flying, shorter supply chains — is a threat to the demand side for energy, but it might actually be good for economic recovery.

The third and perhaps biggest problem with the Fraser Institute’s “analysis” is that it doesn’t really analyze the future of our energy industry, in terms of its long-term economic prospects or its relationship to the planet’s energy needs. True, Canada’s industry is hurting, and we will need to help sustain our non-renewable sector for the foreseeable future — it’s unrealistic to think otherwise.

But with today’s low prices and the worldwide industry looking for places to store a glut of product, allowing “energy abundance” is not a solution that anyone else is looking for. Except for those who seek to pump more oil that is not needed right now, oil with limited markets and oil that is not really wanted — except maybe by the Fraser Institute.

People should look more critically at analysis like this report. If we’ve learned one thing from COVID-19, it’s that the planet is interdependent, for better or worse. “Energy abundance” may goose the economy for a short time. But gutting environmental protection will cook our goose.

David Israelson is a non-practising lawyer, author and journalist. You can follow him on Twitter @davidisraelson or on Linkedin

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