Why plummeting oil prices may hasten Canada's shift to renewable energy
Just as the Danes had to ask themselves hard questions about foreign oil dependency and national energy security more than 40 years ago, today Canada must ask whether its economy has become too reliant upon a single natural resource that is prone to foreign price controls and thus inescapable cycles of boom-and-bust.
And then there’s that pesky subject of climate change that the oil sector just can’t seem to shake off – an issue that didn’t even factor into Denmark’s previous decision to wean itself off oil, making the case even stronger today in Canada.
If the risk of placing such a large portion of Canada’s employment and economy on one seemingly unstable resource is becoming obvious, we may see our national politicians become more aggressive in their calls for the diversification of Canada’s energy sector. And with a federal election later this year, in which a change in government looks increasingly likely, the timing could not be more fortuitous.
Even prior to the collapse in oil prices, the federal Liberal, NDP and Green parties were in favour of transitioning to increased use of renewable energies. The question is what priority they attach to such a national energy transition, and if that priority will increase as the federal election campaign begins to take shape.
The Greens are offering to “create thousands of jobs through investment in renewable energy.” Their policy vision is that “all carbon-based fuels will be subject to rising carbon taxes and industrial cap and trade.”
Last week, NDP leader Thomas Mulclair pledged to make Canada “a world leader in renewable energy and clean-tech, a $3 trillion industry by 2020.” But at the same time, the party is in favour of the controversial Energy East pipeline proposal, which would move Albertan oil sands crude to eastern provinces.
The Liberals are currently the least aggressive on renewable energy, promising to “make real investments in clean energy and energy-efficiency projects” and stating that they will “seize the opportunities presented by this growing sector and make critical investments.” The party currently supports TransCanada's proposed Keystone XL pipeline, but opposes Enbridge Northern Gateway.
The question is: with the price of oil at half its earlier level, with more Canadians perceiving climate change as a major issue, and with a pending federal election, will the opposition party leaders — especially the Liberals and NDP — take more aggressive positions on transitioning Canada away from its oil dependence?
And would Canadian voters support such leadership toward an energy transition, or would they prefer to stick with Harper’s oil-dominated perspective?
The challenge for opposition party leaders entering the federal election will be to articulate a convincing energy transition strategy that wouldn't have a negative impact on the economy. Doing this effectively won't be easy, but successfully persuading Canadians of the need for a maple-leaf version of Germany’s Energiewende (energy transition to renewables) carries with it not only the promise of revolutionizing Canada’s energy sector and mitigating climate change, but also may come with the keys to 24 Sussex Drive.