What should Canada do to prepare for the day oil runs out?

When we’ll hit peak oil – or whether we already have – is the stuff of hot debate. But no one’s questioning the ultimately finite nature of oil and gas reserves. So, what should Canada start investing in now, to prepare for the inevitable day that the wells run dry? We asked a range of creative Canadians for their ideas on how to plan for a post-oil future.

Education, health and conservation

Liza Piper

Author and associate professor of history at the University of Alberta, currently studying the relationship between environmental change and disease outbreaks in the North.

We need to invest in three things: education, health care and environmental conservation.

Education, because the one thing any historian will tell you is that we don’t know what the future will look like. It’s critical that Canadians are creative, open-minded and have a strong educational foundation, in all of the arts and sciences. Harold Innis, a pre-eminent thinker in the early 20th century, travelled to northern Canada when it was on the cusp of its own industrial transition. He trumpeted the potential for railroads, extolling, for example, the opportunities created by the Hudson Bay Railroad, which runs through northern Manitoba to its outlet at Churchill. In looking to railroads, he failed to see that it was airplanes that would transform the North and enable large-scale resource exploitation. If you don’t know what the future holds, you have to hedge your bets.

We need to invest in health care because such industrial transformations typically bring significant socio-economic disruption and migrations, which in turn can have major health consequences.

The rise of fossil fuel economies, whether in southern Canada in the 19th century or in northern Canada in the 20th, was accompanied by major epidemics ranging from typhoid and cholera, to poliomyelitis and tuberculosis. These epidemics had socio-economic underpinnings, most notably in the conditions found in the new urban centres that accompanied the industrial transition. Without a robust health care system, we will likely experience significant human suffering and loss of productivity in any kind of major energy transition.

Lastly, we must invest in environmental conservation, because we don’t know what we will need beyond the obvious alternative energy sources. If you create wastelands or render resources inexploitable, then you significantly reduce your options.

Go green, go clean, and use our cool

Tzeporah Berman

Author, co-founder of ForestEthics, a non-profit environmental protection group, and the former co-director of Greenpeace International’s Climate and Energy program.

The world is moving quickly to a low carbon economy and Canada is being left behind. It is critical that we scale up our investment in renewable energy and clean technologies. This means not only investing in renewable power generation but also in related industries for the manufacture of components. In the past year, China has become the world’s largest manufacturer of solar panels. Even Canadian companies now have most of their operations in China or are opening factories in Taiwan, Malaysia or Thailand. We should be supporting these industries so those factories open here at home.

The other industry we should be courting is the IT sector. The IT sector is booming and Canada is the perfect place for the huge data centres that Facebook, Apple, Google and others are building. In Canada, our northern climate can keep them efficiently cool and we could provide renewable energy to ensure a clean cloud.

The other huge benefit to investing in renewable energy and clean tech is that we can create a diversified economy and jobs for Canadians where they live. The rapid expansion of the oil sands is resulting in a generation of Canadian children on both coasts who spend their days watching the sky waiting for mom or dad to come home from Fort Mack. Besides the obvious benefits of not relying on finite resources or threatening our climate and fresh water, these industries are safer. After one of the worst years on record for oil spills and leaks, it’s worth remembering that a solar spill is simply a sunny day.

Water: sell it or use it to grow food

Jeff Rubin

Award-winning author and former chief economist at CIBC World Markets.

With more than a million lakes, part ownership of the Great Lakes, as well as massive ice fields, Canada’s greatest asset is our fresh water supply.

Water is now subordinated to power generation, whether through hydro-electric, or for getting oil out of the oil sands or for fracking.

We’re going to find the use of water is increasingly problematic to support the use of energy.

Given what’s happened climatically [with drought in some areas], we’re going to see our water become more coveted and more valuable. As things are developing in the U.S. Midwest, American dependence on water may dwarf dependence on gas and oil.

We are going to find that, ironically, while environmentalists have been against putting a price on water, that’s what we’re going to have to do. If we put a meaningful price on water, oil and gas companies would figure out how to use less. While bulk water exports are currently taboo, pressure will grow and, ultimately, it will come down to a matter of price.

Even if we don’t allow bulk water exports, and I certainly wouldn’t rule that out, water is going to become key in driving a much revitalized agricultural sector. If there’s one area of the economy that will grow beyond many others, it will be a throwback to the past economy, with the agricultural sector playing a greater role. World food prices have increased. We have a rising world population with rising protein consumption.

I would also argue that those far-flung suburbs that surround cities may soon return back to the farmland that they were 30-40 years ago because of changes in relative prices. If you look at any real estate, particularly in southern Ontario, and we’re even seeing that out West, prices have doubled and tripled. At the same time, gasoline prices track world oil prices and commutes will become increasingly problematic.

Thinking beyond hydrocarbons, we’re going to find a more valuable use for water.

Stop investing in oil and gas

Karl Schroeder

Science fiction writer and futurist in the Toronto branch of Idea Couture, a global strategy and design firm.

I think the bigger problem is what happens if oil and gas do not run out. Coal use is up, gas use is up, oil use is up – all the things they said we should cut back on, we’re even more aggressively pursuing. New techniques like fracking are making new reserves of oil available. Up to 80 per cent of the assets that oil, gas and coal companies claim right now have been discovered but not yet exploited. If we’re to keep below a two-degree increase in temperature over the next century, we cannot use those assets. However, if these ‘stranded assets’ can’t be used, they constitute a bubble. So, in the short term, there’s greater and greater pressure to exploit those assets, because if they don’t, it will be an emperor has no clothes situation. Corporations will lose their value, but as long as they don’t look down, they can keep going; they’re like Wile E. Coyote after running off a cliff.

It’s great to talk about alternatives, but the alternatives to date have been deployed in an environment of ever-increasing oil and gas use. You can roll out a million wind turbines across the country, but they’re not cutting into the amount of oil and gas that’s being used. Adding renewable energy isn’t, at the moment, reducing fossil fuel use at the global level, partly because what we used to call the developing world is expanding its energy use at a fantastic rate – and coal is the cheapest way to do that. In many jurisdictions, the renewable energy price-point is about to cross over to being cheaper than coal, but governments tend to subsidize industries such as coal mining. There’s definitely going to be a battle in getting rid of coal. Right now there are more than 50,000 coal-powered electricity plants around the world.

The National Ignition Facility in the United States has almost reached an important milestone in achieving a self-igniting laser fusion reaction, but we can’t look to miraculous new technologies to solve these problems. We have to look for more systematic changes in how and why we use energy in the long run.

There are very straightforward courses of action: Take all your money out of oil and gas. If you have a pension fund that’s invested in oil and gas, get your money out and relocate it into renewables. When the bubble bursts, a fantastic amount of money will be lost.

Replacing income tax with a carbon tax has been proven to work; it’s worked in British Columbia.

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