5 Reasons Why Oil & Gas Divestment in Canada is Not Good for Canadians or the Global Environment

5 Reasons Why Oil and Gas Divestment in Canada is not Good for Canadians or the Global Environment

Is divestment from Canadian oil and gas the way forward in an energy transformation? It’s a good question, and one that Canada Action has touched on many times – the most recent of which was in a debate with The Wilderness Committee on Vancouver radio.

In this debate, you’ll hear opponents of Canadian energy argue that divestment from our oil and gas is a good thing for the world. However, taking on a pragmatic approach to projected energy demand growth and the very nature of global energy systems, we cannot agree with these naysayers.

Want to know why? Keep reading.

Here are five major reasons why divestment from Canadian oil and natural gas is not good for Canadians, global energy security OR the climate. Also see:

#1 – Energy Demand is Growing

Global energy demand for coal, oil, natural gas, LNG are all growing - August 2022

Amid growing global demand for oil and natural gas, the world’s energy reserves are dwindling. A few reasons for that include:

1. OPEC's spare capacity is limited, with markets realizing that many members may not have the capacity to boost output much further - if at all [1].

2. Significant underinvestment in new oil and gas supplies both before and during the pandemic.

3. A sluggish restart to the economy after more than two years of pandemic-related production slowdowns.

4. Weather events in parts of Europe, the Middle East and United States, driving up demand for air-conditioning, and soon, for heating in the winter.

5. Continued attacks on Ukraine by Russia, restricting Western access to energy supplies exported by the world’s largest natural gas exporter and second-largest oil exporter.

Today, fossil fuels are in record-breaking demand. Global liquefied natural gas (LNG) demand, for example, will continue to grow for decades, especially as countries plan to phase out coal-fired generation in a bid to reduce CO2 emissions.

Canada is in an ideal position to assist.

We have the most stringent regulatory systems, the most rigorous approach to protecting the environment, and a relentless commitment to safeguarding human rights.

Additionally, a growing number of Indigenous and non-Indigenous Peoples have come to value Canada’s energy sector as a critical lifeline to the health of their communities and the prosperity of workers and families across the country.

With growing global energy demand, we can support our local communities by promoting natural resource development. After all, we are one of the world's most transparent and regulated energy producers, and as a result, should be vying for as much global market share for critical minerals, oil and gas, agricultural products and everything in between.

#2 - Canada is a World Leader

Gas Flaring Intensity by Major Oil and Gas Producers 2019

Securing sustainable and reliable sources of supply for everything from energy to food to metals has become more important than ever before for countries now experiencing resource scarcity.

Canada’s Environmental, Social and Governance (ESG) leadership means we have an important role to play in solving the world’s worsening energy crisis.

For example, among the world’s top oil and natural gas exporters, we are a leader on the following indices:

Additionally, we are a leader among energy producers in emission intensity reductions, water recycling, carbon capture utilization and storage, methane emission reductions, and the deployment of renewables. We're also one of the few global oil and gas producers with carbon pricing.

But perhaps most importantly, we’re a democracy that treats all our citizens as equal. For example, we are committed to partnering with Canada’s First Nations to allow them to break out of their generational cycle of systemic poverty, giving them a real stake in their own futures.

In most other global energy-producing nations, minorities are often marginalized and persecuted by autocratic or dictatorial governments.

Divesting from Canadian energy does nothing but put production into the hands of some of the world’s worst regimes. Hands down, Canada is the better choice for the world’s future energy supply. 

#3 – Canada is a Bastion of Democratic Principles

Canada and the world - social progress index rankings top 15 oil exporters

Environmentalists who oppose Canadian energy projects say they want a “just” transition. However, with global oil and natural gas demand still growing past pre-pandemic record highs, how is it “just” to divest from responsible and reliable fossil fuel production in countries like Canada only to allow demand to be met by less open, less transparent, less regulated, and less "just" regimes?

For example, this week Iranian women are taking to the streets to protest the death of 22-year-old Iranian Mahsa Amini, a young lady arrested by the Iranian morality police for the crime of not wearing a hijab in public.

Iran holds 10 per cent of the world's proven oil reserves and 15 per cent of its natural gas. The Middle-Eastern country is the world's third-largest gas producer and fourth-largest for oil.

Why would Canadian investors allow Canada — with its world-leading social and environmental justice reputation, record for the most rigorous environmental regulations, and unparalleled commitment to research, development, cleantech and innovation — to be displaced by Iran, or literally by any other OPEC producer for that matter?

It is mind-boggling to think that the “divest” from Canadian oil and gas campaign is only helping other less responsible producers that simply do not care about the rule of law, freedom of expression and other underlying principles of democracy that we as Canadians hold dear.

#4 – Renewables & Fossil Fuels are Closely Linked

Canadians can support renewables and oil and gas at the same time for the benefit of our families and the environment

Without fossil fuels, you can’t have renewables.

A great example of the relationship between renewables and non-renewables is the fact that the production of cement, glass and steel requires extreme levels of heat – hard to achieve without burning fuel.

Steel blast furnaces operate at more than 1,100°C, while cement kilns run at ~1,400°C. Furthermore, melting sand to produce glass requires about 1,700°C of heat (using natural gas), about the same temperature as a space shuttle as it re-enters the atmosphere [2].

Cement, glass and steel are all major components of renewables: solar panels, wind turbines, hydro dams, the list goes on. In short, a massive volume of minerals and metals – considered non-renewable inputs – are required to produce such technologies.

Today, many Canadian oil and gas companies are making significant investments in renewable technologies [3].

Solar installations, wind farms, battery technologies, biofuels, hydrogen, carbon capture, improved efficiency, electrification and other cleantech are being utilized by several Canadian oil and gas majors to decarbonize operations and reduce environmental impacts. And these aren’t small, token investments; some are very large, majority-partner kinds of investments that many see as game-changers toward an energy transformation.

Why would Canadians want to discourage these significant investments from going forward, and instead divest from these companies? Such actions would only cede global energy market share to other less responsible producers who don’t care nearly as much about advancing new cleantech and renewables.

Divesting from Canada just doesn’t make sense if you care about people, prosperity and the planet.

#5 – Canadians Lose, Other Nations Win

Canada says no to Germany on LNG, Germany looks to the Middle East for New Supply Instead - September 2022 LNG News

With growing global energy demand, what producers are helped by the oil and gas divestment campaign currently being pushed by Hollywood celebrities and environmentalists? Canada’s competitors — Saudi, Russia, China, UAE, Iran, Angola, Nigeria, the list goes on.

Divestment from democratically produced Canadian oil and gas – in a world with a majority of production and reserves owned by national oil companies – hurts our families. How so? Because every barrel of oil and cubic foot of gas left in the ground in Canada will be replaced by another producer country which stands to benefit economically from that trade.

Divestment from Canadian energy also hurts the planet, as other countries are less vigilant over regulatory, environmental, health safety and human rights issues. These producers will gladly take our business and provide a sub-standard product to an energy-hungry world.

The world, therefore, is the loser because it’s forced to accept the impacts caused by sub-standard production.

Canada’s workers, families, Indigenous and non-Indigenous communities and our economy in general are equally the losers because they are deprived of the opportunity of exchanging superior products for great economic value.

Divestment from Canadian oil and gas is a classic lose-lose scenario. Let’s not entertain the ideas of rich Hollywood elites like Mark Ruffalo and other unpragmatic environmentalists any longer, shall we?

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Join us today for more balanced, fact-based and non-partisan discussions around Canada’s world-class natural resource sectors on Facebook, YouTube and Twitter! We hope to see you there!

Sources:

1 - Middle East Institute - OPEC and maximum production: What is sustainable?, Date Accessed: September 2022 (https://www.mei.edu/publications/opec-and-maximum-production-what-sustainable)

2 – Canada Action – How Fossil Fuels Help Make Wind, Solar, Hydro & Nuclear Energy Possible, Date Accessed: September 2022 (https://www.canadaaction.ca/how-fossil-fuels-make-renewables-and-nuclear-possible)

3 - oilprice.com - Canada's Oil Province Will Soon Be a Renewable Energy Leader, Date Accessed: September 2022 (https://oilprice.com/Energy/Energy-General/Canadas-Oil-Province-Will-Soon-Be-A-Renewable-Energy-Leader.html)

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