By: Gabriella Pasolli
Editor | Economics and Policy
Alberta, my home province, has been known as one of the global leaders in the fossil fuel industry, and the crown jewel of the Canadian economy. However, as concerns relating to climate change continue to mount, frustration with Alberta’s refusal to shift is growing rapidly. Tensions are flaring as the rest of Canada takes aim at Alberta's bread and butter industries with the talk of shifting towards a 'green' economy.
Unlike those who advocate for more environmentally conscious energy alternatives, Albertans in the energy sector believe that their industries would be stable for years to come – until the COVID-19 pandemic. Oil futures crashed in April, sparked by the global shutdown of the economy as countries went into lockdown. The result is an accelerated collapse of the oil industry, especially in Alberta where a barrel of oil breaks even at $60.
However, perhaps this latest crash is not entirely disastrous. Perhaps, it is a sign that COVID-19 has given Albertans a unique opportunity to reset their economy and return to their station as kingpins of the economy by leading the charge towards carbon neutral industries.
For too long, the oil and gas industry has been portrayed as a group of money-hungry CEOs who serve only themselves. While it is true that there are indeed such figures in the industry, they are not the ones who will be most adversely affected by attempts to shift to a greener economy.
Rather, it is time to recognize that those who will suffer from a shift are the working individuals who put in grueling hours in far from ideal conditions, often separated from their families for months at a time. These are the people who bear the brunt of the work and are the people that a carbon-neutral shift must seek to protect.
While transitioning to green energy may seem like an obvious and simple solution to some, it is certain that any economic change of this sort will be met with fierce resistance. On a broader level, there is often a great deal of resistance because of the economic implications of leaving behind fossil fuels. To consider moving away from fossil fuel when the industry makes up 16% of Alberta’s GDP is a lofty prospect. Moreover, on an individual level, switching industries requires time, resources and patience, all things Albertans are running short on.
Industry transitions often involve retraining, which includes taking time off work – time that some individuals cannot afford. Similarly, some more drastic transitions from fossil fuel to renewable industries would require relocation of workers from rural areas to urban centers either for long-term training and education or for the work itself. However, because of the circumstances that COVID-19 has created, some of these risks have become less threatening. Namely, because of stimulus packages like CERB and the increased use of virtual means to deliver education, individuals are more able to afford taking time off work and are less likely to need to relocate for training.
A popular suggestion in the past has been to utilize Alberta’s fossil fuel reserves to build a hydrogen economy. Global demand for hydrogen energy may reach $2.5 trillion by 2050, and Canada is coincidentally one of the top countries tapped to lead this industry. The energy is low-cost, low-carbon and incentivizes the creation of green infrastructure, further transforming the economy to become more carbon efficient. Due to the significant and time-consuming retraining that would be involved, suggestions such as this are often met with resistance. This is where COVID-19 has provided a unique opportunity.
Despite the vaccine rollout, cases in Alberta are on the rise and restrictions are once again being imposed in an attempt to slow the spread; Albertans are surely not in the clear. This, combined with depressed oil prices and the government mandated lockdowns, signals that now would be an ideal time to implement retraining programs. If these programs were engineered to bear low- to no-financial risk to its participants, they would likely seem far more attractive, especially if they were delivered via remote means.
Further, the boom-and-bust nature of the oil field may, for once, actually offer an advantage in this respect. Retraining workers can also equip them with skills that can be used interchangeably in their fields, adding more value to the economy while keeping unemployment steady. This proposition is even more appealing in the face of a post COVID-19 recovery because it would substantially increase the availability of comparable jobs and would make the transition a less daunting prospect.
It is important to understand that this solution is by no means a panacea. It is possible that the recommendations like those I have proposed will fall on deaf ears. Although recent data suggests that 79% of Albertans support an increased focus and transition to renewable energy, only 37% of Albertans outside of Calgary and Edmonton support transitioning away from oil and gas.
This is likely due to the personal risks of losing their employment or doubts about the validity of climate change, as historically Alberta has been the least likely of the provinces to believe in climate change. Regardless of attitudes towards the necessity of a shift, Albertans must accept that unless we are willing to take-action and decrease our reliance on fossil fuels, we are condemning ourselves to a future of economic irrelevancy.
For Alberta to protect its own interests, it is time for business people, policy-makers, and citizens alike to take the initiative and begin to lead the charge towards becoming a leader in green energy. It is time for the federal government to actually support industry transition in Alberta via subsidized retraining, rather than simply imposing restrictions without solutions.
The Albertan government must step-up and invest in working with municipalities to assess what specific renewable industries are most suitable so that funding can be allocated to appropriate retraining programs. Moreover, private pipeline companies should be given opportunities and resources to work with training programs, rather than fighting against them in an attempt to protect their talent pool.
Specifically, utilizing tax incentives to encourage companies to provide training programs internally that would allow their employees to work both in the oilfield and in more renewable sectors could lessen resistance. Most importantly though, it is time for citizens to not only accept the need to change, but to embrace it as an opportunity to rise again.
It is time Albertans stand-up and once again be economic leaders in this country rather than nothing but an impediment to Canada’s sustainable future.
It is time for Alberta to once again be a source of Canadian pride.