Perhaps it was tongue-in-cheek, or a way for the leader of the world’s fifth-largest international oil company to emphasize a relationship with consumers. But it’s clear Looney and other oil bosses are struggling to sell their plans for a future in which the world wants more green energy. Last year, for the first time in history, solar and wind made up most of the world’s new power sources, according to BloombergNEF. If the margins on cappuccinos look good right now, that’s an indication of how hard it will be for Big Oil to rapidly ditch its winning formula of drilling, pumping, and refining while spending its way into renewables.
What is the future of Big Oil without oil?
Industry executives insist their legacy business is resilient even as they shift away from oil and natural gas, but their actions suggest otherwise. BP and Royal Dutch Shell Plc have already slashed their dividends—for Shell it was the first time in nearly 80 years. Returning profits to shareholders has long been a pillar of oil’s strength on financial markets. And those like Exxon who are keeping their shareholder payments untouched are taking on far more debt to do so.
The fossil fuel industry as a whole has taken billions of dollars in writedowns, in part linked to the rise of U.S. shale production and the impact of the coronavirus pandemic. If demand peaks earlier than expected, as some in the industry now fear, the most expensive and polluting oil fields such as tar sands in Canada may never be developed. The term of art for these uneconomic oil resources is stranded assets. The consultants at Rystad Energy AS estimate that 10% of the world’s recoverable oil resources—some 125 billion barrels—could become obsolete.
An article on this site “Freeland, Carney May Be Canada’s Last, Best Chance for a Green Recovery” asks the question for Finance Minister Chrystia Freeland as she settles into her new cabinet portfolio is whether that statement still rings true in the context of a global health emergency, an accelerating climate crisis, a mounting wave of fossil fuel divestment and stranded assets, and the meteoric rise of clean energy alternatives.
Meanwhile, the rest of the world is moving on. The love Canada feels for fossil fuels isn’t shared by other countries and its taking its toll on them. They have to switch gears or die — maybe a little bit of both. See my forum post about the slow painful death of fossil fuels.
We have run out the clock with distracting debates about incremental changes. A new approach is needed.
I have spent the last year and a half writing a book, A Good War: Mobilizing Canada for the Climate Emergency, about Canada’s Second World War experience, searching for lessons for how to confront the climate crisis and quickly transition off fossil fuels.
Our wartime experience carries a helpful — and indeed hopeful — reminder that we have done this before. We mobilized in common cause across society to confront an existential threat. And in doing so, we retooled our entire economy in a few short years.
But to execute a successful battle, we need a plan. Here then are seven key strategic lessons that emerge from our Second World War mobilization.
1. Adopt an emergency mindset
When we approach a crisis by naming the emergency and the need for wartime-scale action, it creates a new sense of shared purpose. It renews unity across Canada’s confederation, and liberates a level of political action that previously seemed impossible.
Economic ideas once deemed off-limits are newly considered. And we become collectively willing to see our governments adopt mandatory policies, replacing voluntary measures that merely incentivize and encourage change with clear timelines and regulatory fiat to drive change.
Metro Vancouver issued an air quality advisory on Sept. 8, 2020, due to the smoke from wildfires burning south of the U.S. border. THE CANADIAN PRESS/Jonathan Hayward
2. Rally the public at every turn
Many assume that at the outbreak of the Second World War everyone understood the threat and was ready to rally. But that was not so.
It took leadership to mobilize the public. In frequency and tone, in words and in action, the climate mobilization needs to look and sound and feel like an emergency.
A successful mobilization requires that people across class, race and gender share a common cause. The public must have confidence that the rich, middle- and modest-income people are all making sacrifices.
Such measures are needed again today. Moreover, a 2019 survey of 2,000 Canadians shows that when ambitious climate action is linked to tackling inequality, support goes dramatically up.
4. Create the economic institutions to get the job done
The Canadian government (under the leadership of cabinet minister C.D. Howe) established 28 Crown corporations to meet the supply and munitions requirements of the war effort. The private sector had a key role to play in that economic transition, but vitally, it was not allowed to determine the allocation of scarce resources. In a time of emergency, we don’t leave such decisions to the market.
C.D. Howe watches a scientist test the curve of a lens. (National Film Board of Canada. Photothèque. Library and Archives Canada), CC BY
Howe’s department undertook detailed economic planning to ensure wartime production was prioritized, conducting a national inventory of wartime supply needs and production capacity and coordinating the supply chains of all core war production inputs (machine tools, rubber, metals, timber, coal, oil and more).
The climate emergency demands a similar approach. We must again conduct an inventory of conversion needs, determining how many heat pumps, solar arrays, wind farms, electric buses, etc., we will need to electrify virtually everything and end our reliance on fossil fuels. And we will need a new generation of Crown corporations to then ensure those items are manufactured and deployed at the requisite scale.
5. Spend what it takes to win
A poster from the Second World War. (Library and Archives Canada, C-091436), CC BY
A benefit of an emergency mentality is that it forces governments out of an austerity mindset and liberates the public purse. This year, in response to the COVID-19 pandemic, Canada’s federal debt-to-GDP ratio will rise to about 50 per cent. At the end of the Second World War, it was 108 per cent.
As mainstream politicians dither on meaningful and coherent climate action, the assertion of Indigenous title and rights is slowing and blocking new fossil fuel projects. Some of Canada’s most inspiring renewable energy projects are also happening under First Nations’ leadership. It is imperative to both honour and support such efforts.
7. Leave no one behind
The Second World War saw over one million Canadians enlist in military service and even more employed in munitions production (far more than are employed in the fossil fuel industry today). After the war, they were all reintegrated into a peacetime economy, including income support to housing to post-secondary training for returning soldiers.
The ambition of these initiatives provides a model for what a just transition can look like today for all workers whose economic and employment security is currently tied to the fossil fuel economy, with a special focus on those provinces and regions most reliant on oil and gas production.
As I read the latest scientific warnings, I’m afraid. I feel deep anxiety about the state of the world we are leaving to our children and beyond. In truth, we don’t know if we will win this fight. But it is worth recalling that those who rallied in the face of fascism 80 years ago likewise didn’t know if they would win.
During the war’s early years, the outcome was far from certain. Yet that generation rallied and surprised themselves by what they could achieve. That’s the spirit we need today.
(Bryan Eneas/CBC; Jeff McIntosh/The Canadian Press) no copyright infringement is intended
Ottawa’s proposed post-pandemic “green recovery” would strike a death knell for Western Canada’s economy and must be blocked by Prairie MPs and senators, the Buffalo Project lobby group said Tuesday.
In a pair of open letters addressed to lawmakers, the group pushing for what it calls a better economic deal for the region says the Sept. 23 federal throne speech that’s to include a focus on environmental sustainability is a threat to western prosperity.
“The ‘Green Recovery’ plan promised by the West’s representative in cabinet, Finance Minister Chrystia Freeland, may be the undoing of our industries as we know it,” they state.
In recent months, oil and gas investors and industry underwriters have pulled back from Alberta’s oilsands, some of them citing what they call a lack of confidence in the province’s commitment to environmental sustainability and in projects’ economic viability in an era of low oil prices. The Buffalo Group’s Robinson insists the main reason for the energy industry’s woes are hostile federal policies.
The Honourable Mélanie Joly, Minister of Economic Development and Official Languages, and Minister responsible for Western Economic Diversification Canada (WD), today announced federal funding of $3 million to help Alberta’s construction and engineering industry innovate and grow. This investment from Western Economic Diversification Canada will help small and medium-sized businesses adopt new products and technologies that improve the energy efficiency of buildings and reduce greenhouse gas emissions.
This funding will be directed towards an Alberta-based not-for-profit organization—the Smart Sustainable Resilient Infrastructure Association (SSRIA)—to establish a network of test buildings where firms can collaborate and test their products under different conditions. WD funding is complemented by an investment of more than $2.8 million from Alberta Innovates, in-kind support from industry and $165,000 from the SSRIA, bringing the total project funding to over $6.3 million.
Products and services expected to be commercialized through this initiative include:
materials for walls, roofs and foundations;
mechanical and electrical system improvements;
sensors and lighting products that reduce energy consumption; and
software for storing and analyzing building performance on energy efficiency and greenhouse gases.
Today’s announcement further supports the construction industry’s shift towards energy efficient and environmentally-friendly practices. In addition to benefiting from new products and services to meet their needs, Alberta’s broader architecture, engineering, and construction industry will also reap the benefits of this important initiative.
Now, Prime Minister Justin Trudeau is preparing to gamble again that Canadians will support even more deficit spending when his government rolls out a new agenda later this month to respond to the health and economic challenges posed by the COVID-19 pandemic.
“We are asking Canadians to embark on an entirely different direction as a government,” the prime minister said Wednesday in an interview with CBC morning show host Stephen Quinn in Vancouver.
“We are going to rebuild the Canadian economy in a way that was better than before.”
The rebuilding effort begins with the Sept. 23 throne speech and will continue later in the fall when Finance Minister Chrystia Freeland releases her first economic outlook.
Perhaps it was tongue-in-cheek, or a way for the leader of the world’s fifth-largest international oil company to emphasize a relationship with consumers. But it’s clear Looney and other oil bosses are struggling to sell their plans for a future in which the world wants more green energy. Last year, for the first time in history, solar and wind made up most of the world’s new power sources, according to BloombergNEF. If the margins on cappuccinos look good right now, that’s an indication of how hard it will be for Big Oil to rapidly ditch its winning formula of drilling, pumping, and refining while spending its way into renewables.
An article on this site “Freeland, Carney May Be Canada’s Last, Best Chance for a Green Recovery” asks the question for Finance Minister Chrystia Freeland as she settles into her new cabinet portfolio is whether that statement still rings true in the context of a global health emergency, an accelerating climate crisis, a mounting wave of fossil fuel divestment and stranded assets, and the meteoric rise of clean energy alternatives.
