Oil Development = Wellbeing?

Canada has become an energy giant – at least this is what Wikipedia says. According to the US Energy Information Administration, Canadian oil reserves are the second largest in the world. Only Saudi Arabia has greater assessed reserves. Mind you, much of Canadian oil is hard to get. It is either tied up as bitumen in the Athabasca Oil Sands, it is in the frigid north, or it is off shore where drilling is difficult.

As world oil supplies become more and more scarce, there is, and will continue to be increasing interest in these Canadian deposits. The question is: how should Canada as a nation respond to this growing interest? Conventional wisdom seems to say that we view this as a bonanza: we need to cash in on it as quickly as possible. But why? Last week I suggested that the market for our oil will not disappear, and the price of oil will only go up.

We know that oil companies need to show their investors a quick return on investment, but this is not true of governments. Our government needs to take a longer term, broader perspective on the development of such a resource. It is probably not reasonable to expect an oil company to consider what is best for our children and grandchildren in its long term strategy. However, I think it is the responsibility of a government to take such a long term perspective.

This is simply good conservative thinking. I am very disappointed that our current government, which claims to be conservative, applies what I call “company thought” to an issue that requires “nation thought.”

Furthermore, because the oil reserves we will be wishing to develop in the future will be hard to get at, their development will be more labour intensive than the oil developments of the past. We see this already. Labour demand in Alberta is high, and anecdotes of problems associated with this high labour demand are abundant – a shortage of housing, weak communities, and jobs simply not being filled. At the same time, some of the cities in eastern Canada are in recession.

Will there be any real winners if jobs continue to be lost in Eastern Canada and people wanting work need to continue to move to those areas where the oil is? Will there be any real winners if some of the areas we have considered part of Canada’s natural heritage become tailings ponds and other scars of open pit mining for oil.

Once wealth, whether it is national or individual has risen beyond a certain point, happiness is not a function of GDP or income. Happiness then is a function of family and community stability. Happiness is consistent with a country has stable communities and a diversified economy exporting a variety of products.

Given that we are dealing with a much sought after, but also very limited resource, the role of a conservative government needs to be to temper and guide the development of that resource. Instead, we see our government cheerleading the unfettered development and export of our non-renewable [once it is gone it is gone!] oil resource.

By Eric Rempel