Increasingly, Canada and Alberta are finding themselves in an awkward position in the energy transition race.
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Opportunities are there, and we need to pay much more attention to energy transition. The International Energy Agency believes that half the climate technologies the world will need to achieve net zero are still in development.
I think it fair to say Canada’s biggest problem rests in Alberta. While our energy sector is one of the biggest producers of greenhouse gases, the more difficult problem is that too many Albertans fail to see a problem.
Alberta has the expertise. Fortunately, most of our big carbon producers, those in oilsands production, are more liberal than our governments. Our oilsands companies are already showing leadership through the Pathways Alliance. Canadian Natural, Cenovus Energy, ConocoPhillips, Imperial, MEG Energy, and Suncor have pledged to spend $16.5 billion over the next seven years on a massive carbon capture and storage facility.
Pathways is an important industry initiative, but where are the medium and small companies? Granted, they lack the ability to put up billions but, as a group, they can put up millions. Perhaps as important as dollars is taking a more adaptive approach to the issue. A new attitude can often make a big difference.
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A recent report by the Boston Consulting Group’s Centre for Canada’s Future estimates $100 to $150 trillion in new investment will be needed by 2050 to get to the net zero goal. In its study, the Boston Group gave Canada a mixed review. On the one hand, Canada’s spending per capita on research and development lags behind its peers. They said this is weighing on the nation’s climate technology sector.
Getting to that investment goal is going to take reform of our current federal and provincial investment infrastructure. Governments need to provide greater support for research and development in energy transition, critical minerals, and agriculture. Industry and government need to focus on responsible natural resource development. Oddly enough, Alberta’s oilsands industry is both a good example and a bad one. Bad has had enough attention, so what is the good?
For close to 50 years, oilsands mines have begun to produce mined-out areas requiring reclamation. There have been considerable reclamation successes with wildlife returning and the areas resuming their role as carbon sinks.
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The same Boston Consulting study found that Canada is a leader in climate technology startups, with the third-highest number of startups over the past five years relative to its peers. That study admitted that Canada has the highest number of startups per capita, with 12 out of a total of 454.
Albertans need to realize that climate change is a global problem rather than a consumer plot to destroy the industry. Industry backers need to moderate their views, and opponents need to realize that petroleum is and will continue to be an essential ingredient in 21st-century society.
Society will gradually be weaned off petroleum as an energy source, but it will continue to be an important source for petrochemical products that are almost more important than as an energy source.
Even though the Americans claim they do not offer incentives, they are offering incentives in the field of climate technology. The recently passed Inflation Reduction Act is packed full of incentives. Incentives are perilous as a component of any economic development policy. To respond to the needs of climate technology, a joint initiative by federal and provincial governments and industry is necessary.
Like the Pathways Alliance, Canada needs to act, to diversify and invest for the future, to take its proper place in the technology field. Alberta’s UCP government must end its confrontational approach to Ottawa, one that worked in the 1970s, and co-operate with the federal government to achieve national goals.
Canada has an absolute responsibility to its citizens and our partner countries to remove the barriers to innovation by encouraging research within Canada.
Mike Shaikh is a business leader, community advocate, volunteer, and philanthropist.
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