But we have to bear in mind that -- and you create jobs because people are going out and planting trees and all the related work. Globalisation means that people in the developing world know how we live in the west and they want some of what we have. Or, even for a household, putting money into the house for repairs and maintenance, those can be at least partially explained by or looked at as investments, and you've got an enhanced asset. The final chapters of The Bone Clocks, David Mitchell’s 2014 novel, describe a future in which progress has gone into reverse. Mac: And so, there's no question that's been a factor. The U.S. is now starting to go in that direction somewhat. But do you think that industry is responsive enough and able to adapt quickly enough? We need more Barcelonas and fewer Atlantas, because that will encourage us to change the way we live: walking more, using public transport more, sharing cars, cycling. That is because the real growth in energy demand from now on is going to come from the developing world. Washington could then invite other nations to sign on to the same commitment. It's not like a corporation that borrows a whole bunch of money and goes out and builds a new plant or new facility or makes an acquisition. ... and sink with the price of oil. The UN is hosting a conference in Paris in late 2015 that will seek commitments to reduce carbon emissions from all the countries attending. The mission could be to phase out domestic use and export of coal by a fixed date, or to set a deadline for shifting 50% of US energy consumption to renewable sources. > GDP rank: eighth largest. This is one of the reasons why the deep-green approach to climate change is fraught with difficulty. Most of the world has gone in a different direction. The grow-your-own drive has only been partially successful: a quarter of a century later, food is still rationed in Cuba. Thank you so much for your time today. “What matters is the sort of growth we choose. Energy executive, investor and philanthropist Mac Van Wielingen says he can't imagine a recovery without Canada's largest industrial sector and export commodity. Here’s how to save the earth without giving up on growth, Wed 8 Apr 2015 01.00 EDT So the government is ramping up efforts to diversify the economy. And that's been going on actually prior, well, prior to COVID. Natural gas and oil crucial to Canada’s economic recovery, PODCAST: How Canada's resource sector can drive real jobs and recovery. © 2021 Guardian News & Media Limited or its affiliated companies. It's how can you be the best barrel? It's really extraordinary. As of 2015, Texas is home to six of the top 50 companies on the Fortune 500 list and 51 overall (third most after New York and California). Ever since oil prices began collapsing in the second half of last year, many in Canada have been asking: Can our economy survive without oil? Oil and the economy The oil conundrum. And so, it begs the question and people are all asking. Tracy: Right. The Bank of England is sufficiently concerned to have launched an investigation into the risks of this happening. And in fact, we expect to see a deleveraging within both the consumer sector, which has, in Canada has among the highest levels of debt of any country in the world, countries in the world. There are those who might argue otherwise, but life in the world before the industrial revolution really was nasty, brutish and short. I mean, I don't like to see political leaders, political leaders -- and I've said this many times in Ottawa --I say this all the time, actually, that, you know, what we want and need is for you to stand facing outward to the Canadian public with your back to the industry and facing outward and to kind-of speak with clarity and conviction and evidence and facts about the strengths and the achievements of our resource industries. The energy needs of a bigger and richer global population have risen sixfold in the past 50 years. In a conversation with Energy Examined host Tracy Larsson, energy thought leader Van Wielingen discusses why productive assets from a strong oil and gas industry are vital to counterbalance growing deficits, and why Canada needs to better support its homegrown industry in a global competition for investment capital, focusing on its strong  environmental, social and governance standards. “There have been two terrible realisations,” says Michael Jacobs, who used to advise Gordon Brown on the issue. Investment in clean energy is growing at a double-digit rate. BONUS: New subscribers receive our special edition CAPP's Natural Gas and Oil Sands fact books - get the facts on economic benefits, environmental leadership, Indigenous relations and more. Would our politics be different? The lessons from the anti-apartheid and debt-relief campaigns is that divestment can be used to put pressure on governments to act. But there's no long-term strategic, competitive value creation being created in doing that. Nigeria can plan economy without oil, says Agusto. Nor would there be much support for a return to the days before fridges, gas cookers, washing machines and vacuum cleaners. In the west, there was a long economic boom that lasted from the early 1990s through to the financial crash of 2007. That is incompatible with the climate change projections made by the International Energy Agency, which thinks fossil fuels should make up no more than two-thirds of the energy mix. In the unlikely event that investors all pulled out of fossil fuels at once, the result would be much worse than what followed the collapse of Lehman Brothers in September 2008 – a colossal stock market crash, followed by an equally epic slump. If climate change can simply be blamed on “the Man”, on the evils of capitalism, or on a cabal of fossil fuel companies hell-bent on destroying the planet, then the solution is to take on the Man, replace capitalism with something kinder and gentler, and force the fossil fuel companies to shut down. As oil prices keep increasing, many are looking to a future without oil. Mac: The oil and gas sector is Canada's largest industry sector. That’s right – the plastics used to make electronics … Mac: Well, it's certainly right across Canada in terms of suppliers to the industry and services to the industry, employment levels. Global temperatures have risen by almost 1C above pre-industrial levels, and the number of weather-related natural disasters has increased. I think that’s totally naive.”. The role of oil in Iran's economy is declining, undercutting Western efforts to press the regime by reducing its oil export revenue. Unilever wants to sell more soap and deodorant. This is not just about carbon taxes. Andreas Wagner poetically termed the tackling of challenges related to climate change as “our generation’s moon landing”, saying that we need “enormous efforts globally to build a future beyond fossil fuels and prevent a climate change disaster”. Receive our free newsletter with energy stories and news that matter to Canadians. Here is one such warning: “For generations, we have assumed that the efforts of mankind would leave the fundamental equilibrium of the world’s systems and atmosphere stable. The oil price boom from 2003 to 2013 fueled rising prosperity in Saudi Arabia, which became the world’s 19th-largest economy. > … Of course, renewable energy alone won’t replace the huge economic and employment opportunities traditionally supplied by oil. We need to see them as not just competing, but there are synergistic opportunities. John Lewis commissions expensive ads to encourages us all to spend more at Christmas. The Economic Effects of a World Without Oil. We want technical change, for example, to build new solar technologies. Success at the Paris conference would be easier if developing countries saw that the west was serious about providing help for climate change mitigation and adaptation. His visionary, yet unconventional corporate idealism has been developed through extensive experience in building and directing businesses and by his knowledge as a self-described “student of business leadership.”  As the Founder and Chair of Viewpoint Group, his role is to oversee the entire team, and offer support, guidance, and thought leadership. That is going to require some tough decisions and some compromises. It's our political institutions as well. And the corporate sector is also, the debt levels are among the highest in the world. The market model spread quickly to parts of the world that previously it could not touch: to China, where the reforms begun by Deng Xiaoping were accelerated; to India, where the idea that the world’s biggest democracy could go it alone was abandoned; to the Soviet Union and its former satellites, which received a strong dose of economic shock treatment. vast majority of fossil fuel reserves are unburnable, Investment in clean energy is growing at a double-digit rate, Atlanta’s carbon emissions are 10 times those of Barcelona. The latest bout of financial blues, however, has been a doozy. Oil and Natural Gas 101: What is ESG — and why does it matter? Mark Carney, the governor of the Bank of England, does not believe it either, which is why he went public at the 2014 annual meeting of the World Bank with his view that the “vast majority of fossil fuel reserves are unburnable” if we wish to keep the increase in global temperatures below 2C. And, you know, I'll tell you, Tracy, when we look around the world, that other resource developing countries and specifically energy producers around the world, we're hard pressed to find the level of polarization and hostility that exists in Canada. Dieter Helm, professor of energy studies at Oxford University, says: “It’s not clear we’re very serious about climate change. In terms of reducing the number of people living below the global poverty line of $1.25 (84p) a day, the post-cold war model of capitalism has been a success. Tracy: Well, Mac, when we're talking about investment in the industry, then, why is it so important that we turn to that? Like Stern, he is not really talking about replacing the economics of “more” with the economics of “less”; he is suggesting replacing it with the economics of “better”. Tracy: Mac, I really enjoyed this discussion and I hope I get to talk to you again. It's a competitive strategy and it's a challenging strategy that's positive for the industry. “To say that we have to stop growing – that we have to go backwards – I think is factually wrong, and also politically unlikely to be successful.”. But the problem goes much further than figures such as Tony Abbott, the prime minister of Australia, or Nigel Lawson, the former UK chancellor of the exchequer, or about every Republican harbouring hopes of winning the nomination for the 2016 US presidential race. Tracy: If we look at Canada's natural gas and oil sector, we can see all kinds of ways where the industry has been innovating, continues to do so and has a track record in doing so. Let's talk about that. But the risk is now out there – and growing – because policymakers have now woken up to the risks of climate change. Tracy: You know, the perception is that natural gas and oil is a Western Canada thing, and that's actually not true. And so, I look at these dilemmas really through that kind of lens. It is not just a question of supply, but also a question of demand, which is why many people now have more than one smartphone and lust after the Apple watch. Rising sea levels have caused floods on the New York City subway, killing thousands. Bahrain stands as a model for other countries, as they’ve never had much oil to boost the economy. There might be a little bit of an indirect link on the investment side that institutions and banks would say, 'well, Canada's really got its act together there and they have all these progressive initiatives regarding climate,' but it's minimal. Historical evidence shows there is a link between income and population: as people become richer, they have fewer children. The economy shrank and strict food rationing was imposed. But when you look through it all and you try to parse it out, there's also no question that adverse policy, hostile politics in Canada has really hurt the industry. Context: Energy Examined aims to provide an engaging insider’s perspective for the public. The third difficulty with the anti-growth approach is that growth is part of the solution to climate change. Businesses that did not expand were viewed as failures. And I find that shocking. Countries in sub-Saharan Africa are home to around 630 million people with no electricity. And private sector spending, of course, is going the other way. But it also wants to ensure that every Indian citizen has access to electricity, and believes that can only be achieved by expanding coal power at the same time as it is expanding solar power. Fossil fuels are used to make and power mobile phones, tablets and laptops. That's primarily mortgage debt. Nicholas Stern, who authored a 2006 report on the economics of climate change commissioned by then-chancellor Gordon Brown, says stopping growth misses the point. In part, that is because investors will probably move slowly. And it is my opinion that Canada really, on the policy side and political and policy side has really, has not been strategic. Mac founded ARC Resources and ARC Financial, which is Canada's largest energy focused private equity firm. And that's why a lot of people have trouble wanting to rely on innovation -- policymakers and government leaders or the environmental activists -- because they can't get a direct line to what it is that might surface on the innovation side. What do you see as the role of Canada's energy sector and of the resource sector? Africa is far greener than the UK, the US or Germany, largely because of hydroelectric power in countries such as Ethiopia. After all, the average sub-Saharan African does not have $200 to spare. > Proved oil reserves: 560 million barrels. And how dominant it will be in economic terms has to be seen because there are offsetting areas of positivity and growth that are still present. Parents expected their children to be better off than they were. But if it can be blamed on “us”, the answer is not quite so simple. I'm Tracy Larsson, and today we're going to delve into Canada's economic recovery, what it could look like and the unique role of Canada's natural gas and oil industry. And the governance record in the industry is excellent. If we really want the fossil fuels to be left in the ground, it is about us. Tracy: So, you have a long history of working in Canada's energy sector. Because there is an enormous opportunity for Canada to maintain this vital sector of our economy, even if it's not growing, maintain it and ensure that it maintains, that it's stable and profitable and protected in a sense by policy and not attacked, not torn down. We want other people to do stuff, we want to divest from companies – but what about us? The IEA is right: further delay will be costly. They have invested in fossil fuel-burning power plants and built energy‑inefficient buildings in cities designed for cars. There are only three ways of reducing our carbon footprint: reduce the amount each person consumes, reduce the number of people, or make each unit of growth less carbon-intensive. And if it's not Canada producing these resources, the resources will get produced in other jurisdictions and these other jurisdictions do not have the same quality of governance oversight that Canada has and ESG standards. Catastrophic climate change has become a reality. Italy. If the denouement of Mitchell’s novel presents one frightening future, Cuba provides another sketch of what could be in store if the transition from a fossil fuel world to one running on renewable energy does not go according to plan – less apocalyptic than The Bone Clocks, but with considerable drawbacks. We create jobs across a wide range of other sectors to support our activities. It certainly has hurt investor confidence. “We’re seeing very rapid change”, says Stern, “but we’re going to have to accelerate the arrival and installation and use of renewables, from hydroelectricity and wave power through to the various types of solar. And so, we have so much policy and regulatory uncertainty and political uncertainty slash controversy, sometimes hostility directed towards the industry --the Western Canadian energy-based industry -- that it has been a factor. Since the middle of the 18th century, there have been successive waves of technical progress: coal and steam, railways and the internal combustion engine at the end of the 19th century; the mid-20th-century age of consumer durables and commercial air travel. “I think it’s extremely simplistic to be pro-growth or anti-growth”, says Helm. In our weekly posts, we talk about the energy industry, environmental impact, tailings management and reclamation, water management and the social and economic implications of oil sands development. And so, we need that positive orientation. Calgary, Alberta, Canada. It's a huge value creator. The odds are still against such a financial market meltdown. Life for the vast bulk of the population was strictly no-frills, as it had been for more than a millennium. And then, of course, there's the Atlantic-based oil and gas activity as well, which is certainly very significant to those provinces, Newfoundland and Labrador specifically, for example. And so, it's developing its resource and it has in a sense, you don't have the same splits within a country like Norway as you do in Canada with the regional split. Norway opted out of the EU during a referendum in November 1994. Outside of South Africa, coal is a small part of the power story. But there is going to be a lag, even on the most optimistic assumptions, before renewables can take the place of coal. Did you know oil sands companies spent $3.2 billion supporting 2,230 Canadian companies outside of Alberta? Enbridge Inc’s Line 3 replacement project is in the process of doubling its capacity, which will allow it to deliver about 760,000 bpd of crude from Alberta to Superior, Wisconsin, by the end … But there is a deleveraging and in that kind of an environment that weighs heavily on the economy. And, you know, it's almost every other day some headline from a reporter written generally by people who are advocates on the renewable energy side that are calling for the death of the oil industry, it's gone, it's done. In 2043, the fossil fuel age is over: nuclear power stations ar e melting down, there is no access to the electricity grid and solar panels are so prized that they are looted. Well, if you think about it from that perspective, then when you look at the resource industry in Canada and the oil and gas sector in Canada, you see something quite different. Articles range from features on key and timely industry issues, profiles of people working in Canada’s oil and gas sector and educational content designed to build industry knowledge. But despite the region’s oil heavy focus, the country of Bahrain has already become their first post-oil economy. The same 2bn tonnes of CO2 could be saved through substantial improvements in energy-efficiency over and above those already expected. It has abundant reserves of coal – the most damaging of the fossil fuels – and nations such as Angola and Nigeria are significant oil exporters. And so, I'm very partial to the advantage, the natural competitive advantages that Canada has as a small population and a very, very large country and vast resources. Gas is, of course, a fossil fuel, but it has half the emissions of coal, and we could make substantive cuts – as indeed the US has done – by making the switch. There's no question that markets’ supply and demand, certainly with the COVID impact, has really impacted the prices of oil and natural gas. Our Reporter . The answer is that it will be hellishly difficult, but it is just about feasible if we make the right choices – and start making them now. Well, before I ask this question. It's kind of -- it's right across the country. He's a corporate director, a private equity investor and a philanthropist. The future sketched out in The Bone Clocks is only fiction. Canada’s economy has faced a double hit, from both COVID-19 and collapsing oil prices, economists note. After the crash, when the developed world was struggling to emerge from the deepest slump since the Great Depression, it was China and India that acted as the engines of growth. Almost 90% of that energy is provided by fossil fuels – coal, gas and oil. The economy of the State of Texas is the second largest by GDP in the United States after that of California.It has a gross state product of $1.887 trillion as of 2019. There is no evidence that we want fewer of them. So if reducing living standards is a political non-starter and repression is spurned as a way of controlling population growth, that leaves reducing the carbon-intensity of growth. And this unfortunate thing about, you know, the different political representation in different regions. And that's, you would have heard me use the expression before, in a long-term transition, the last barrel should be the best barrel and Canada should be offering the best barrel. Even the light green approach is going to be tough, and might not work. https://context.capp.ca › interviews › 2020 › podcast_mac-van-wielingen After decades of relying on Moscow for oil, chemical fertilisers, pesticides and a large chunk of its food, Fidel Castro’s government faced a crisis. The IEA also makes the point that it is time the world got its act together. Cuba, subject to a US economic embargo, was one such country. And with the contraction that has occurred, you can, and with ultimately, as we come out of it, you can reasonably anticipate that there's going to be a deleveraging that occurs to some extent. You know, why isn't our ESG enhancing those advantages? In addition to higher consumer spending, that also means higher demand for energy, the bulk of which comes from fossil fuels. Alberta Can Transition from Oil and Gas and Have a Strong Economy. However that unfolds, there's an offsetting asset. And I think we should actually, that should be part of our strategy or our climate action strategy. And depending on how you slice and dice it, it's order of magnitude about 10 per cent of our total economy. Internet coverage is patchy, food and consumer goods are scarce, and life‑saving drugs such as insulin are hard to come by. Content is edited by CAPP Communications; questions on editorial content may be referred to context@capp.ca. This is an uncomfortable thought. Those who say manmade global warming isn’t happening look more and more certain to end up on the wrong side of history – which will harshly judge our failure to act until the threat had become so obvious that we had no other options. Politicians move when they know votes are at risk. That's the thing about innovation is, it's generally, major innovation's unpredictable. The country is richly endowed with natural resources such as oil and gas, fish, forests, and minerals. The second is that the triumph of the market has put pressure on the planet, just as Thatcher suspected it might. The fossil fuel companies are in business because we want the products that fossil fuels make and power. I mean, it's not that it's not possible. Fewer people go hungry. The possibilities opened up by this new wave of technology, he believes, provide hope that growth can be decarbonised over the decades to come. She told the Royal Society that her government supported the idea of sustainable economic development, and concluded: “Stable prosperity can be achieved throughout the world, provided the environment is nurtured and safeguarded. The bad news is that renewables will still only meet around 20% of energy demand by 2035, even using optimistic assumptions about future growth rates. 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