A commentary by a retired business leader who has been a director of five global corporations.
The marvellous Christmas movie The Polar Express, starring the inimitable Tom Hanks, ends with the words “anything is possible, if you only believe.” Except, as adults understand, many things aren’t possible, not even if some people do believe them.
An obvious example is the fantasy that the 84 per cent of global energy supplied by oil and gas can be replaced by so-called “green energy.”
Since the first UN COP (“Conference of the Parties”) meeting in 1995, world oil demand has increased from 64 to 100 million barrels per day. But even as demand increased, the “environmental, social and governance” (known as “ESG”) movement encouraged investors to unload their oil-industry holdings. Faced with share valuations reflecting their perceived status as a “sunset industry,” the rational course for oil company leaders was to pay out large dividends rather than reinvest in production growth.
As demand grew, supply therefore stagnated.
The Ukraine crisis revealed just how narrow the supply margin has become. Regrettably, most of that margin is in the hands of Vladimir Putin, leaving European countries that depend on Russian oil no choice but to continue to provide the funds with which he ravages the Ukrainian people. This is the tragedy sanctimonious ESG zealots have wrought.
Meanwhile, back in the world capital of “if you only believe” fantasies, the prime minister of a country endowed with one of the world’s largest reserves of oil has presided over a seven-year long anti-oil-industry scourge, thwarting multiple proposed export pipelines that could now have been supplying those captive market countries.
Sharing his anti-oil zealotry seems to be a necessary qualification for Justin Trudeau’s cabinet. Alberta Premier Jason Kenney recently went to Washington to present the Senate Energy Committee with plans to increase Canadian oil exports, thereby freeing-up more U.S. oil to help Europe reduce Russian oil purchases.
The idea received a warm reception. Unfortunately, Kenney’s message was promptly contradicted by federal Resources Minister Jonathan Wilkinson, who told the same committee that shifting to renewables and hydrogen “will provide true energy and national security to Europe.” In other words, don’t count on Canada to help defund Putin’s murderous war unless it lasts five or 10 more years.
It’s incomprehensible that during a global oil and gas shortage brought on by the wanton destruction of a civilized democracy, our prime minister thinks all will be well if only Canada rids itself of fossil-fuelled vehicles. Deep in delusion, he considers this a perfect time to announce a plan to have 60 per cent of new cars and light-duty trucks be “zero emission” by 2030.
When you live in a perennial state of fantasy, facts don’t matter. But here are facts that do matter to Canadians forced to face the real-world impact.
Fact 1: High cost. The federal budget promises a $5,000/vehicle rebate. There are 24 million gasoline and diesel-powered vehicles in Canada. Subsidizing replacement of just one million would cost $5 billion. The budget also contains $900 million for new charging stations. That’s helpful in urban centres, but providing a charging station network necessary to allow e-vehicles to travel interurban highways would cost tens of billions more.
Fact 2: Revenue needs. The Trudeau government’s longer-term plan is to get rid of all fossil-fuelled vehicles. Federal and provincial fuel taxes now total a stunning $22 billion each and every year. These revenues fund the cost of building and maintaining urban streets and highways. How long can it be before governments are forced to regain those revenues from electric-vehicle charging levies?
Fact 3: Grid stress. The average Canadian motorist drives 15,000 km per year and the average electric passenger vehicle uses 19 kw/hr per 100 km. That works out to 2,850 kw/hr per year, more than 25 per cent of current Canadian household consumption. Many of the country’s electrical generation and distribution grids are already near capacity. Electric vehicle advocates say the problem will be mitigated by mandating low amperage during off-peak, late-night hours. But most highway drivers travel during the day when the grid is near capacity. And they will need high- amperage DC quick-chargers during these already supply-tight hours.
Fact 4: Land demand. Refuelling with gasoline or diesel takes about five minutes. But even rapid chargers need 30 minutes. That means six times more land occupied by charging stations. How much of that land will be taken from agricultural production?
Fact 5: More emissions, not fewer. Canada’s 24 million fossil-fuelled cars and pickup trucks emit 14 per cent of the country’s 1.5 per cent share of global emissions. If all 24 million were converted to battery power, global emissions would be reduced by just two-tenths of one per cent. Emissions growth from China’s coal-fired power plants would offset that in just a few days. And that two-tenths of a per cent doesn’t count emissions produced from mining and transporting the materials that go into all those batteries. Nor does it consider that 20 per cent of Canada’s electricity is generated with fossil fuels.
Those factors clearly wipe out any benefit, unless we include the benefit that living a fantasy allows people, our leader included, not to have to think about all those Ukrainians we could have saved by helping Europe say “no” to Russia’s oil — if only our oil industry hadn’t been hamstrung.
