The problem is that there's such a negative overlay and those who are opposed to the industry are almost ignoring the whole ESG story and just focusing on one factor, which you would be aware of, and that is the CO2 emissions and climate risk. They should be, but it needs to be presented that way. All of this is important, because ultimately Helm is right. There are more climate change sceptics than we might like to think. She told the Royal Society that her government supported the idea of sustainable economic development, and concluded: “Stable prosperity can be achieved throughout the world, provided the environment is nurtured and safeguarded. But this process has had two unattractive side effects. Context: Energy Examined aims to provide an engaging insider’s perspective for the public. We will have to! That's the thing about innovation is, it's generally, major innovation's unpredictable. Life for the vast bulk of the population was strictly no-frills, as it had been for more than a millennium. And the governance record in the industry is excellent. And then, of course, there's the Atlantic-based oil and gas activity as well, which is certainly very significant to those provinces, Newfoundland and Labrador specifically, for example. Here is one such warning: “For generations, we have assumed that the efforts of mankind would leave the fundamental equilibrium of the world’s systems and atmosphere stable. I mean, as you would know, many people will say over and over and when I talk about this in Ottawa, for example, I always apologize. Joining the podcast today is Mac Van Wielingen. The IEA also makes the point that it is time the world got its act together. The energy needs of a bigger and richer global population have risen sixfold in the past 50 years. Thank you so much for your time today. In 2017, Texas grossed more than $264.5 billion a year in exports—more than … Gas is, of course, a fossil fuel, but it has half the emissions of coal, and we could make substantive cuts – as indeed the US has done – by making the switch. One four-letter word underpinned economics: more. As the west outsourced its manufacturing to low-cost centres in Asia, energy demand in China, India and Indonesia rocketed. Carney believes climate change is the medium-term issue of our age, but talks about the “tragedy of horizons”. “To say that we have to stop growing – that we have to go backwards – I think is factually wrong, and also politically unlikely to be successful.”. And you know, I know that, for example, our investors, 70, 80 per cent of our investors at ARC Financial are international investors. And depending on how you slice and dice it, it's order of magnitude about 10 per cent of our total economy. But would energy policy in Canada be different if the energy region straddled Ontario and Quebec? It's our political institutions as well. It is not just about divestment. “There have been two terrible realisations,” says Michael Jacobs, who used to advise Gordon Brown on the issue. So the government is ramping up efforts to diversify the economy. There might be a little bit of an indirect link on the investment side that institutions and banks would say, 'well, Canada's really got its act together there and they have all these progressive initiatives regarding climate,' but it's minimal. > Proved oil reserves: 560 million barrels. There are those who might argue otherwise, but life in the world before the industrial revolution really was nasty, brutish and short. Tracy: And marketing on a global scale is what you're talking about. Since the middle of the 18th century, there have been successive waves of technical progress: coal and steam, railways and the internal combustion engine at the end of the 19th century; the mid-20th-century age of consumer durables and commercial air travel. And who's going to replace that production? Several of the lines carrying that crude are in the midst of expansions. Well, according to Betsey Stevenson and Justin Wolfers, economists at the University of Michigan in the US, the evidence is that wellbeing rises with income, and that the satiation point has yet to be reached, even in the richest countries. It's a competitive strategy and it's a challenging strategy that's positive for the industry. Can we imagine a future that is cleaner, greener and sustainable – one that avoids climate armageddon – without abandoning the idea of growth and, thus, forcing living standards into decline? Between two-thirds and four-fifths will need to be left in the ground. Alberta wouldn't be Alberta without the oil and gas industry yanking its finances up and then down, up and then down. Let's talk about that. So, you bring up a point there, competitiveness. And it's shocking. There was an acute shortage of fuel for tractors. Mark Carney, the governor of the Bank of England, does not believe it either, which is why he went public at the 2014 annual meeting of the World Bank with his view that the “vast majority of fossil fuel reserves are unburnable” if we wish to keep the increase in global temperatures below 2C. By this he means that central banks and finance ministers are set up to deal with short-term problems, such as whether inflation will hit its target in two or three years’ time, or whether another housing bubble can be prevented before the end of the decade. Success at the Paris conference would be easier if developing countries saw that the west was serious about providing help for climate change mitigation and adaptation. With the world barely recovered from one global recession, policymakers are now concerned about another. He's a veteran energy executive. It does not have to be that way. Its carbon footprint is tiny. https://context.capp.ca › interviews › 2020 › podcast_mac-van-wielingen Once shareholders understand that governments are serious about climate change, they will start to look at their investment portfolios. And the corporate sector is also, the debt levels are among the highest in the world. There's no question that markets’ supply and demand, certainly with the COVID impact, has really impacted the prices of oil and natural gas. Because we've seen record government spending in response to the COVID crisis. “If we say the only way to handle this is to stop growing, we will be factually wrong, because if we stopped growing but didn’t break the relationship between activity and emissions, we wouldn’t be tackling climate change.”. The oil price boom from 2003 to 2013 fueled rising prosperity in Saudi Arabia, which became the world’s 19th-largest economy. So, there is a choice. Does this make us any happier? Now the underlying driver of economic growth is technical change, and technical change is accelerating. As oil prices keep increasing, many are looking to a future without oil. And why shouldn't Canada be an active participant in offering our products into that market long term? After the crash, when the developed world was struggling to emerge from the deepest slump since the Great Depression, it was China and India that acted as the engines of growth. Mac Van Wielingen is an energy executive, private equity investor, corporate director, and philanthropist, and has been called “Calgary’s corporate radical” for his progressive thinking and unique grasp of corporate leadership, strategy and human behaviour. That is why Japan’s population is ageing and shrinking. The oil price crisis that began with the crash of 2014 is just a taste of what can happen when huge portions of the international economy’s oil wealth dissipate. We’re going to have to look more closely at carbon capture and storage, because that’s a way of using your fossil fuels without emitting. More have access to healthcare and education. What is best at this time is to conceive of a economy without oil revenue and construct an economic management model based on that premise. Fossil fuels are used to make and power mobile phones, tablets and laptops. And then naturally, that moves out publicly and globally. And I find that shocking. Canadian Association of Petroleum Producers And so, we do have many problems, but we're making progress. Ever since oil prices began collapsing in the second half of last year, many in Canada have been asking: Can our economy survive without oil? This could be achieved in one of two ways: through a carbon tax, or through a cap-and-trade scheme. And so, it's developing its resource and it has in a sense, you don't have the same splits within a country like Norway as you do in Canada with the regional split. The latest bout of financial blues, however, has been a doozy. Obama could do his bit by making climate change a mission for the US – similar to the way that John F Kennedy vowed to put a man on the moon in the early 1960s. We need to market ourselves that way. Tracy: Given all the work that you've been doing, looking at strategies for recovery Mac, can you point to anything, and this might not even be a fair question, but is there something you can point to as, what's the most important thing that we need to do now to enable a strong recovery for Canada? Even if the world called a halt to economic expansion now, he adds, carbon emissions would continue rising and the world would be looking at an increase in global temperatures of 3-4C. You wouldn’t be reading this blog post. It is instructive that a … The grow-your-own drive has only been partially successful: a quarter of a century later, food is still rationed in Cuba. It is not just a question of supply, but also a question of demand, which is why many people now have more than one smartphone and lust after the Apple watch. Oil and Natural Gas 101: What is ESG — and why does it matter? And so, from the point of view of the world, Canada really deserves to be in the market developing its resources. Building up the necessary infrastructure is going to be a long and expensive process, which should be encouraged through public procurement, tax incentives and a big increase in R&D budgets. Apart from the impact on households, power shortages are holding back growth and job creation. Saudi Arabia without oil ... off five percent of Aramco on foreign stock exchanges has gone and now PIF, the main vehicle for diversifying his economy away from oil, is … Those who say manmade global warming isn’t happening look more and more certain to end up on the wrong side of history – which will harshly judge our failure to act until the threat had become so obvious that we had no other options. Well, before I ask this question. > GDP rank: eighth largest. Governments are thinking about climate change, but they have other more immediate priorities: reducing unemployment, increasing living standards and, in the case of politicians rather than the technocrats running central banks, getting re-elected. And so, my point is that we need to think synergistically across a number of fundamentals and the economic fundamentals should always be there. But if it can be blamed on “us”, the answer is not quite so simple. As of 2015, Texas is home to six of the top 50 companies on the Fortune 500 list and 51 overall (third most after New York and California). Nevertheless, he is certain, “solar and wind will be two major sources th… The business-as-usual camp says that the scientific consensus is wrong about climate change, or that climate scientists have exaggerated the risks, which can be tackled if and when they become apparent. Oil & Gas: Overall Economic Contribution Trade is just one element of a nation’s overall economic performance. You know, why isn't our ESG enhancing those advantages? The role of oil in Iran's economy is declining, undercutting Western efforts to press the regime by reducing its oil export revenue. The third difficulty with the anti-growth approach is that growth is part of the solution to climate change. Watkins believes western governments and environmental NGOs would be better off mobilising finance for a programme of carbon capture and storage in India than offering Modi advice about the perils of climate change. The final chapters of The Bone Clocks, David Mitchell’s 2014 novel, describe a future in which progress has gone into reverse. Oil and the economy The oil conundrum. Given the dreadful air quality in Delhi, the government led by Narendra Modi is well aware of the threat of climate change and has announced ambitious plans to increase solar power. Norway’s offshore oil production peaked in 1999 and has been steadily declining. Protecting this balance of nature is therefore one of the great challenges of the late 20th century.”, It was, though, just one speech at a time of great global upheaval: China was liberalising its economy; apartheid was in its death throes in South Africa; above all, the cold war was coming to an end with defeat for the Soviet Union. After all, the average sub-Saharan African does not have $200 to spare. It's a huge value creator. This magazine website is published by the Canadian Association of Petroleum Producers as part of an ongoing dialogue with Canadians. Outside of South Africa, coal is a small part of the power story. However, as a member of the European Economic Area, Norway partially participates in the EU’s single market and contributes sizably to the EU budget. Some places remained off limits. Nicholas Stern, who authored a 2006 report on the economics of climate change commissioned by then-chancellor Gordon Brown, says stopping growth misses the point. And how dominant it will be in economic terms has to be seen because there are offsetting areas of positivity and growth that are still present. And I don't think we can objectively appreciate how profound that is. Mac: You know, it should, Tracy. Firms have to depend on costly generators, which makes goods more expensive. Last modified on Wed 14 Feb 2018 13.34 EST. The first is to make people pay for the consequences of burning fossil fuels, and that’s a carbon tax. We want other people to do stuff, we want to divest from companies – but what about us? So, I answered your question by referring generally to, in a sense, the process, the decision-making process relating to like, what is it we can do to support recovery? And they don't have enough confidence and faith in in the process of ingenuity and inventiveness and how powerful the incentives are to solve society's problems. That message would be reinforced by putting a price on carbon. But despite the region’s oil heavy focus, the country of Bahrain has already become their first post-oil economy. Here at the Guardian, we want to sell more newspapers, and more ads to companies selling their own goods and services to readers. The acceleration of growth and big increases in living standards only really began with the industrial revolution; they would not have happened without the exploitation of fossil fuels. Oil, coal and gas currently account for 86% of primary energy, and BP is forecasting only a small decrease, to 81%, by 2035. There are basically three steps toward getting out of fossil fuels. You can't see it. Andreas Wagner poetically termed the tackling of challenges related to climate change as “our generation’s moon landing”, saying that we need “enormous efforts globally to build a future beyond fossil fuels and prevent a climate change disaster”. That's primarily mortgage debt. It's kind of -- it's right across the country. That is the good news. America’s oil and natural gas industry supports 10.3 million jobs in the United States and nearly 8 percent of our nation’s Gross Domestic Product. And we’re going to have a period when gas is substituted for coal.”, Helm agrees. Oil Sands Question and Response (OSQAR) is a blog created by Suncor Energy to support constructive dialogue about the oil sands. Please join us again next time. Yet, the picture we are confronted with is different: demand for fossil fuels keeps growing. Tracy: Thanks to everyone for tuning into another edition of Energy Examined. The same 2bn tonnes of CO2 could be saved through substantial improvements in energy-efficiency over and above those already expected. That’s right – the plastics used to make electronics … QOM Oil Minister Bijan Namdar Zanganeh told the one-day conference on Economy Without Oil here Thursday that it is a mistake to consider oil as a source of revenue. But what's important to see about the oil and gas sector is that the economic value created relative to, in a sense, the inputs and specifically relative to labour, which gets to the whole thing about labour productivity, which is one of the key drivers for any country in determining economic growth so that the value created from the sector in economic terms, is very significant. Businesses that did not expand were viewed as failures. Food production became less oil-intensive, as every possible scrap of land was exploited. The economy shrank and strict food rationing was imposed. But it also wants to ensure that every Indian citizen has access to electricity, and believes that can only be achieved by expanding coal power at the same time as it is expanding solar power. If you are looking for articles published before 2016, visit the archive. And I think we should actually, that should be part of our strategy or our climate action strategy. The size of the global middle class has increased, and consumers in Shanghai and Mumbai have been able to afford cars and fridge-freezers. What do you see as the role of Canada's energy sector and of the resource sector? Life expectancy was 40 at best, the working week was long, disease was rife and diets were poor. In our weekly posts, we talk about the energy industry, environmental impact, tailings management and reclamation, water management and the social and economic implications of oil sands development. • Follow the Long Read on Twitter: @gdnlongread, Your support powers our independent journalism, Available for everyone, funded by readers. : $2.13 trillion. The average sub-Saharan African consumes the same amount of energy in a month as the average Briton does in a day. At the end of the 18th century there were fewer than 1 billion people on the planet. The stone age did not end because of a shortage of stone. Calorie intake fell by a third. As things stand, the offers will fall a long way short of what the experts say is a level consistent with the 2C target – about 12bn tonnes a year, short according to Michael Jacobs. And so, I look at these dilemmas really through that kind of lens. And, you know, it's almost every other day some headline from a reporter written generally by people who are advocates on the renewable energy side that are calling for the death of the oil industry, it's gone, it's done. Energy executive, investor and philanthropist Mac Van Wielingen says he can't imagine a recovery without Canada's largest industrial sector and export commodity. It is a dystopian vision that looks like a brutal, dangerous version of the past – one not at all like the future that was promised when the cold war ended with victory for the western capitalist model. 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