Haste does make waste

Let’s see ... it’s the Canada Day long weekend, Red Deer’s centennial party, and the weather hasn’t been this good for more than a year. I have an idea: I’ll check the news sources and see what Stockwell Day has been up to!

Let’s see … it’s the Canada Day long weekend, Red Deer’s centennial party, and the weather hasn’t been this good for more than a year. I have an idea: I’ll check the news sources and see what Stockwell Day has been up to!

That wasn’t my plan for the weekend, but CBC’s online news site served up an opinion piece by Red Deer’s most ambitious former MLA, and I got stuck there.

Canada’s former minister of public safety, international trade and head of the Treasury Board hasn’t exactly followed my lead into retirement. But he’s four years younger than me, so he probably needs to work a bit longer before he can enjoy gardening and grandkids.

He started a private consulting firm, Stockwell Day Connex, and he’s putting experience gained from his successful 25-year political career to good use.

It’s a good gig. Recently, he’s been consulting in Angola, one of Africa’s greatest success stories. That he’s at the centre of a region of such potential is a great thing.

What’s harder to take is the message he’s relaying back to Canada.

Here’s his thesis: Canada risks not only losing its place in global energy market, but risks losing its major export customer (the United States) and becoming an increased energy importer from the U.S. and the United Arab Emirates.

Why? Because while we waste time on internal debates over small geographic areas like Fort McMurray and Kitimat, the South Atlantic Basin (Africa, in this case) is stealing a march on us.

It’s an old trope: our resources will rot in the ground, unless we develop them all right now, as fast as possible, before they go out of style. That was the line of attack in Day’s years in the Alberta legislature and it hasn’t changed since.

After decades of destructive civil war, Angola has marched into a democratic and socially responsible 21st century. Their region on the east coast of the African continent is blessed with natural resources the world (mainly China) desperately needs.

If you believe Day’s article, Angola has managed to fast forward from colonialism through war, into a modern Western-style economy that is developing its resources at a spectacular rate — without raping the environment and without massive corruption and internal theft.

Maybe they have, and good on them for it.

But Canadians (Albertans in particular) have learned a few things about what happens during periods of spectacular development. It hasn’t all been good, and the benefits have not been spread equally between stakeholders and resource owners.

In fact, this overly-fast pace of resource development is the primary source of the Alberta government’s economic woes right now.

We have more capacity to produce crude oil coming online soon than we can ship. That overproduction relative to marketability has caused a price drop. Not for oil globally, which is at its highest price point in history — but just for the oil we produce. Thus the “bitumen bubble” and a huge drop in royalties to the people of Alberta.

Production has vastly outpaced our ability to upgrade and refine bitumen into products that would create more stable employment, more government revenue and higher prices.

Yet Day threatens us with dire outcomes if we don’t buckle down and go even faster.

The U.S., Days says, will surpass Russia in natural gas production in two years. It will also surpass Saudi Arabia in oil production two years after that. How that links to Africa, Day doesn’t explain.

The U.S. has also become a net exporter of refined petroleum products. Day doesn’t mention that this in on the strength of supply of bitumen from Alberta.

I would remind Day that headlong development often leads not so much to a cliff, but to a brick wall. Taking our foot off the gas, and developing according to a more rational and sustainable plan, is a better idea.

A pipeline to Kitimat — even if it were approved today — won’t move any oil until 2020, and global conditions then will likely not be the same as today.

Shipping an even higher percentage of our oil as raw bitumen in a pipeline to U.S. refiners (where the real profits reside) doesn’t look like such a hot idea to a lot of Canadians.

It’s like a hockey team constantly dealing away its top draft picks, so it can continue to get top draft picks in the future. Good draft picks, but never a championship. Thus, the “internal debates” that Day is bemoaning.

Our resources will not spoil in the ground. Nor will using them go out of style. Let’s not equate pace of development with getting value for them.

Energy development is the biggest engine driving the Canadian economy. Don’t you think we should treat our engine better?

Greg Neiman is a retired Advocate editor. Follow his blog at readersadvocate.blogspot.ca or email greg.neiman.blog@gmail.com.

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