Image Credit: Canadian Press

By David Charbonneau

Eyeview

CHARBONNEAU: Someone should let Jason Kenney know the oil peak has arrived

Sep 24, 2020 | 10:33 AM

ALBERTA PREMIER JASON KENNEY still dreams that his one-trick scheme of pumping oil out of the ground will save Alberta. Not so, says the energy giant BP.

BP predicts that it’s all downhill from here for the fossil fuel industry –we have reached peak oil production.

Sure, there will be some rebound in global economic activity once the COVID-19 pandemic is over but a number of “scarring effects,” such as work-from-home, will reduce oil demand.

That doesn’t mean that energy demand will decrease. The rise of the middle class in Asia will drive energy production up but the shift will be to renewable sources.

BP is putting its money where its mouth is. The company sold off its global petrochemicals business for $5-billion US this summer. It’s also preparing to sell a large chunk of its oil and gas assets. Even if crude prices bounce back from the COVID-19 crash, it is committed to renewable energy.

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Not only Alberta, but all Canada will feel the pinch of peak oil. The loss in royalties has decimated Alberta’s economy, leaving the province with a forecast deficit of $24.2 billion. Canada is the fourth-largest producer and exporter of oil in the world and most of it comes from Alberta’s oil sands. The oil and gas sector comprises 5.6 per cent of Canada’s GDP.

Jason Kenney is bullish on oil and gas, arguing that oil demand and prices will grow after the pandemic. His energy minister, Sonya Savage said in an e-mail that energy consumption forecasts show oil and gas “dominating” the mix “for decades to come,” and she added the familiar talking point:

“That oil will come from somewhere, and if not Alberta, other countries [such as] Russia and Saudi Arabia will increase their market share.”

Kenney is committed to being bullish on oil after he trashed Rachel Notley’s NDP government, accusing her of gross fiscal mismanagement and being anti-oil, anti-West and in the pocket of Justin Trudeau’s Liberals.

Things have not gone well for Kenney. The thousands of jobs that he promised have not materialized. Instead, jobs disappeared –even before the pandemic.

His attempts at populism are a joke. The $30 million war room that Kenney launched in response to “misinformation” being reported about the oil sands and the public inquiry into foreign funding of environmental groups have been public relations disasters.

Unlike B.C. Premier John Horgan and Ontario Premier Doug Ford, Kenney did not receive a pandemic bump in popularity. The Angus Reid Institute found him to be the second-least favourite premier. A new poll puts support of Kenney’s government at 38 per cent, the same as Notley’s before her government fell.

Despite Alberta’s dim outlook for oil, things look promising for natural gas. Gas will play a crucial role in supporting developing economies as they reduce their reliance on coal. And gas is also a source of near-zero carbon emissions when combined with carbon capture technologies.

Premier Kenney is a skilled politician but he should forget about the politics of scape-goating and division. He may be able to drive a wedge through the heart of Alberta, but populism will fail to deliver the realistic energy policy that will serve Alberta in the future.