Coyne: Confusion over national energy strategy is entirely appropriate

Then we're agreed. Canada needs a national energy strategy, says the Canadian Council of Chief Executives. Canada needs a national energy strategy, the Council of Canadians concurs. What this country needs is a national energy strategy, asserts the Energy Policy Institute of Canada, an industry group. Or what about a national energy strategy, counters the Alberta Federation of Labour, not an industry group. The country's energy ministers discussed the need for a national energy strategy at their meeting last summer, since which time not a week has passed without someone demanding to know why we have not yet got one.

Given the idea has such universal support across the land, it might seem strange to find the prime minister, of all people, in some uncertainty as to its meaning. Asked his views on a Calgary radio show, Stephen Harper confessed, "the honest truth is I don't know precisely what it means. I'm looking forward to having some discussions with some provinces to find out what they have in mind." But in fact the prime minister's confusion is entirely appropriate.

When so many disparate groups with such disparate aims are all in support of the same thing, it's usually a sign they have very different things in mind. As with most proposals for a "national strategy" for anything, the words "national" and "strategy" are essentially placeholders. If they mean anything at all — a debatable proposition — they are stand-ins for "my preferred policy." But a call to adopt "my preferred energy policy" lacks a certain something, especially when compared to the grandmasterly, world-historic sweep of "a national energy strategy."

Why a strategy, rather than a policy? Experience teaches that where "strategy" goes, "strategic" is never far behind. Why do we need a national strategy for energy and not, say, for shampoo? Because, dear child: energy is a "strategic" sector. And what makes it so strategic? Perhaps the Energy Policy Institute can shed some light. "Canada's rich abundance of resources and its success in building an open and vibrant energy market," it explains in a policy paper, "has created a significant and strategic sector for the Canadian economy." So: "large," then.

Well, not quite. If the need for a strategy is implied by the strategic nature of the industry, the word strategic is usually taken to mean it possesses certain unique qualities that exempt it from the ordinary laws of economics, such as might govern lesser commodities: rather, some sort of government intervention is in order. In other words, it's strategic on account of the need for a strategy. Or as former TransCanada Corp. CEO Hal Kvisle puts it, "there's some room for some central planning here. Not in the Communist sense of the word, but somebody has to come up with a game plan."

Ah, but whose game plan is it to be? When industry and business groups talk about a national energy strategy, they mean a concerted push to expand sales of Canadian oil abroad, together with the regulatory approvals needed to make it happen at home: a big broom to sweep away local objections to energy infrastructure projects, such as Enbridge's Northern Gateway pipeline, the subject of just-opened hearings in British Columbia. But when labour and environmental groups talk about a national energy strategy, they mean policies to reduce Canada's use of fossil fuels, whether through conservation or alternative energy sources.

For some, it's about diversifying our energy exports away from the United States, to China and points east; for others, such as the AFL, it means building pipelines "connecting west and east within our own country," rather than supplying refineries overseas — or indeed refining the oil in Alberta, which activity its proponents consider more befitting our dignity (more refined?) than mere resource extraction. Still other strategic thinkers have other energy sources in mind: it's about a national electricity grid, they'll say, or the need to "build out our nuclear capacity," or perhaps to diversify the economy away from energy altogether. It's a dog's breakfast of conflicting agendas, in other words, most of them amounting to this: though the market may be signalling we should produce crude oil for export — $100 a barrel is a pretty strong hint — we should instead be doing something else.

To see the government of Alberta leading the charge for an NES, after its experience with the NEP, is surely the oddest part of all this. Natural resources are, after all, within provincial jurisdiction, a point the province was pretty adamant on back in the day. But whereas thirty years ago Alberta felt besieged by the energy-hungry east, today it thinks it can use its newfound clout in Confederation to impose its own regulatory preferences on other provinces. But provincial interests in the matter aren't necessarily the same. Most of the benefits of the Gateway pipeline, for instance, would accrue to Alberta; most of the environmental costs, if any, would fall on British Columbia. It's not obvious the national interest requires one to override the other.

Oh all right: nobody likes to be a party pooper. You say we need a national energy strategy? Here's mine: prices. If the returns to producing oil are greater than to other activities, we should produce oil; if China will pay us more for our oil than we could get elsewhere, we should sell it to them; if prices do not include all costs including environmental costs, we should adjust them with a carbon tax. Other than that I can't see the point.

Edmonton Journal, Fri Jan 9 2012

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