WHAT WOULD happen if Canada’s and therefore B.C.’s natural resources were no longer as strongly valued or even needed by the rest of the world?
Over the decades we’ve experienced mini versions of this scenario, usually brought on by a global recession and lasting for a few years. So it’s not unusual and we always rationalize and explain it away by referring to our resource sector as a Boom and Bust type economy.
However, let’s suppose that 10 years from now, someone somewhere invents a new technology that makes oil and gas obsolete. Almost overnight, oil as the engine and prime driver of the industrialized world has been replaced by this new non-carbon technology. The Industrial Age that began with steam will now be driven and likely renamed by this new technology.
In this story line, oil will not disappear overnight as there’s an obvious legacy factor… A time span that is needed to phase out or retool carbon based infrastructure and I suspect that cleansing cycle would be in the neighbourhood of 20 or so years.
However, our economy will feel the impact immediately. Oil and gas producers, now faced with this new technology will begin to dump inventories, prices will fall and we will once again be facing revenue and tax shortfalls along with growing unemployment. A storyline very much like what we are now experiencing.
You only have to look at the current job loses in Alberta, Saskatchewan and Newfoundland to get a sense of what happens when demand falls off and prices take a beating. The difference, and it’s a big difference, with this future scenario is there would be no boom/bust cycle. It won’t be coming back and this time the bust cycle would be permanent.
Sound a bit far fetched and thinking it won’t happen that fast? Consider for a moment that you’re reading this column on your phone, or tablet or computer, receiving your data through the internet and likely doing so wirelessly. Yet just 30 or so years ago, none of the technologies you now use without so much as a second thought, existed.
If we had met back in 1985 I told you how you’d be reading my column in 2016, you’d smile at me nervously while calmly backing away. I mean how far fetched and crazy could I be? So, humour me, like you would have in 1985 and think about the impact it will have on the world and more importantly, for us as an oil and gas-producing nation.
Where does our economy go? When someone tells me that carbon based energy sources will not be replaced in our lifetime or even that of our children’s, I have a tendency to look at them strangely.
Others, uncomfortable with this type of conversation and looking for fault, try for the pivot by pointing out that I drive a car, heat my house and use products (plastic) manufactured with oil. However, I remind them of the thousands of scientists and engineers working on ideas to eliminate my carbon dependencies
As sure as the automobile replaced the horse and buggy, something will replace the car and associated technologies. You just have to look at the work of Tesla’s Elon Musk to see the direction we’re headed. His battery technology is now open source and available to all without licensing. And his ideas and existing technologies for batteries and solar arrays are just one reason I don’t invest in energy stocks.
Our politicians, especially those here in B.C., will say I’m wrong. I’m also certain some of you reading this column will agree with their position. Others will say such thoughts are part of a green anti-industry conspiracy.
There are those that remain convinced that carbon energy is the pathway to a long term and prosperous future. I disagree, believing instead that we can decide to take this time-limited opportunity to shape and be part of the future that is likely going to happen.
For now, though, I will leave you with this thought. If I am wrong you lose nothing, you get to remind me of my stupidity on a daily basis and our resource based economy charges ahead, unchanged for another 100-plus years.
If the politicians are wrong, our resource economy begins its collapse within two, possibly three, decades and, to date, they have done nothing to prepare you for that outcome. And remember, denial is not a solution.
Bill McQuarrie is a Kamloops entrepreneur. He can be contacted at [email protected]. He tweets @mcrider1.