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With friends like these, who needs enemies?
Why an oil industry spokesperson ran away from an interview, how the Allan Inquiry chose its experts, and more proof that your next vehicle will probably be electric
For years now, the oil and gas industry has been busy telling itself that its perspective is routinely excluded from conversations in non-Alberta shaped parts of the country. If only we could get our side of the story on the record, they protest, everything would be different.
This is, of course, abject nonsense — and it was made evident yet again during a recent panel conversation about pipelines on TVO’s “The Agenda with Steve Paikin”. The panel featured three academics, including the University of Alberta’s Andrew Leach, as well as a representative from Greenpeace Canada, and the apparent absence of an industry-friendly voice prompted claims of bias on Twitter. But Professor Leach was ready with his receipt, and it was a doozy.
That’s right: Chris Bloomer, the CEO of the Canadian Energy Pipeline Association, bailed on an interview about pipelines that would be seen across Ontario because Greenpeace’s Keith Stewart would also be there. There are only two possible explanations for this, as far as I can see. Either Bloomer is scared of Keith Stewart, or he doesn’t know how to respond to Stewart’s criticisms effectively. Both reflect poorly on Bloomer and his organization, as well as the industry it ostensibly represents. After all, if they can’t effectively make their case on a carefully moderated television show, how on earth do they expect to do it in less carefully controlled environments like social media.
If it’s any consolation for Bloomer, he isn’t the industry’s biggest embarrassment this week. That title belongs to Barry Cooper, the University of Calgary professor (and early supporter of the ironically-named “Friends of Science”) whose work, if you can call it that, is a key part of the Allan Inquiry. It’s increasingly that said inquiry will be a first-ballot entry into the Clusterfuck Hall of Fame, and Cooper bolstered its case this week with an interview he did with Inside Climate News’s Nicholas Kusnetz, in which he basically admitted that the industry has been trying to “buy off” its enemies. “I keep telling them, ‘You guys are just naive and stupid, it ain’t gonna happen.’”
Kusnetz’s story also revealed the merit-based approach that inquiry commissioner Steve Allan has been using to recruit contributors.
In an interview, Cooper said he had no prior experience in the subject. He said he knows the commissioner of the inquiry, a forensic accountant named Steve Allan, through their work on the Calgary Stampede, an annual rodeo.
Once again: with friends like these….
Yes, the electric revolution is coming
But not all of the bullets that are whizzing towards Alberta’s oil and gas industry are being fired from its own gun. Oil prices have rallied strongly in the face of both recovering demand and falling supplies, but the long-term picture for demand growth remains muted, at best. That’s a reflection of the growing influence of electric vehicles, and there’s more good news on that front — at least, for those who want to see our transportation system get de-carbonized. As a recent poll conducted for KPMG shows, the shift towards electric vehicles may be about to accelerate.
Canada's automotive industry is nearing the tipping point, with nearly 70 per cent of Canadians indicating that they're looking to buy an electric vehicle not in a decade's time but in the next five years," says Peter Hatges, Partner, National Sector Leader, Automotive, KPMG in Canada. "Our poll research illustrates huge consumer demand in Canada for EVs, putting the onus on manufacturers and governments alike to shift gears not only to meet the expected surge in EV sales but to invest heavily in the necessary infrastructure."
And while that’s partially a function of the declining cost of EVs, it’s also a reflection of the fact that cheap new cars don’t really exist any more. As Nathaniel Bullard notes in the latest Bloomberg: Sparklines newsletter, the market for ICE vehicles has been getting ever-more expensive. “In 2012, more than 50% of new vehicles sold were priced below $30,000,” he writes. “Last year, more than 50% of vehicles priced above $40,000.”
With the cost of your traditional gas-guzzler rising steadily, and the price tag on an electric vehicle dropping every year, it’s safe to assume that up-front price parity is about to arrive. It’s no wonder most Canadians plan to make their next new vehicle an EV. And given that, it might be time for those who are bullish about the future of oil demand to mark down their forecasts a bit.
Why oil sands companies might be a great investment
Those marked-down forecasts might sound like bad news for Canada’s oil sands companies. But as I wrote in this month’s Report on Business magazine, there’s actually a compelling case for them (and their shares) in the near and medium term. The billions of barrels of bitumen they control have uses other (and potentially more valuable) than combustion, and the rapidly shifting global supply picture may be far more hospitable to Canadian producers than it’s been in the past. Even without the Keystone XL pipeline, things look better for companies like Suncor and Canadian Natural Resources than it has in a while.
But, as I wrote:
….if there’s anyone who can mess up the industry’s surprisingly bright future, it’s the industry itself. The federal carbon tax is only an asset if the companies advertise it accordingly, and for an industry whose leaders haven’t always been enthusiastic supporters of the idea, that might be more difficult than it should be. Indeed, some of those leaders continue to trade in dead-end arguments about the ethical nature of Canada’s oil production or the sins of the OPEC regimes—the very same arguments that failed to gain traction with investors five years ago.
The recent behaviour of people like Chris Bloomer and Barry Cooper doesn’t exactly inspire much hope here.