Will Donald Trump derail the global energy transition? Probably not, because China is now driving the transition, not the US. But, as leader of the world’s largest economy, he can certainly do some damage, especially to American efforts to build clean energy manufacturing of solar panels, batteries, electric vehicles, and their supply chains.

“Trump appears to be on the cusp of barricading the US economy behind a tariff wall and cementing its role as the world’s biggest fossil fuel producer,” writes Bloomberg’s David Fickling. “The risk for the US is that China can see how doubling down on its green push will enhance its wealth and global status, and diminish that of its rival.”

Trump gets that China is America’s chief geopolitical rival. One of the few accomplishments from his first Administration is alerting the United States to the economic threat it poses. He blustered throughout the recent election campaign about tariffs, as high as 60 per cent, he intends to levy on China. 

But Trump thinks the prize is the American market. It’s not. 

That would be the Global South, which consists of the world’s low-income and emerging economies, including Latin America and the Caribbean, Africa, India, and large swaths of Asia. These correspond roughly to the non-OECD (Organization for Economic Co-operation and Development) countries OPEC expects to drive oil and gas demand growth to 2050 and beyond.

Extending the latest World Oil Outlook report’s time horizon to 2050 “amplifies the role of India, Other Asia, Africa and the Middle East as the key sources of incremental demand in the coming years,” OPEC says.

Twenty-two million barrels per day of incremental demand, compared to an 11 million barrels per day decline in the OECD.

Minimizing China’s presence in the Global South would seem like a logical strategy.

China has enormous under-utilized manufacturing capacity in the key clean energy technologies (wind, solar, batteries, EVs, heat pumps). At the Third Plenum a few months ago, the national government committed to “three new things” – solar, batteries, EVs – as the primary focus of its industrial strategy going forward. While it sounds crazy to Westerners, even with all that idle plant, over the next decade China is committed to investing as much or more as its Western rivals in building even more facilities. 

Where will all that production go?

The US and Canada will be closed for business. Europe is slowing imports of China’s clean energy tech with its own tariffs. Japan and South Korea aren’t keen about China flooding their markets, which aren’t that big anyway. China’s domestic market is big, but not that big.

The only outlet for all that pent up manufacturing is the Global South. 

Not surprisingly, Chinese companies are already building EV plants in key markets like Brazil and Thailand while doubling EV exports from 1.3 million units in 2023 to 2.7 million this year. China’s Belt and Road initiative is supporting infrastructure designed to export resources (e.g. Brazil soybeans) and import manufactured goods. For example, China invested $1.3 billion in Peru’s $3.5 billion recently opened Chancay port.

“Chancay is the latest development in a worrying pattern of Chinese state-owned companies, which are beholden to the political interests of their government, building and operating ports in strategic waterways across the world, from the Aegean Sea to the Panama Canal,” the Atlantic Council reported.

The Biden Administration’s response is the Americas Partnership for Economic Prosperity, designed to lever private capital along with US public funds to build infrastructure. The project hasn’t come close to matching China’s hustle. The Atlantic Council says that President Xi Jinping intends to sign more economic agreements this year with Latin American countries.

This is in a region the US has considered its “backyard” for over a century. 

China is on the move.

Let’s assume Trump slaps higher tariffs on Chinese goods when he assumes office in January. That will sting, but China’s leaders are ready with a pushback strategy of their own. You can bet it includes more attention to the Global South.

Given Trump’s antipathy to clean energy and his frequently stated desire to roll back Biden climate initiatives, there is a very good chance he will exit office in 2029 with US suppliers of clean energy products still not competitive with China. Perhaps costs will be low enough to speed up the American energy transition, but it’s unlikely firms will be active much beyond their domestic market. Meanwhile, their Chinese competitors will be firmly entrenched in the regions where growth is most expected.

Trump’s second term is very likely to end with the US a distant second place in the clean energy arms race, perhaps even third behind Europe. 

“[W]hile Trump is caught up with short-term and transactional wins, Xi has been laser-focused on coming out on top in the long run,” says Fickling.

How ironic that his “America First” strategy may end with an “America, Distant Runner-up” Reality.

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Yesterday I published a Note criticizing the University of Alberta energy transition course. The crux of my argument is that Alberta’s oil and gas leadership thinks the current energy transition is commodity-led like all past transitions when, in fact, this one is technology-led. The UofA course ignored that difference, hence my criticism. My Note was the target of some nasty ad hominem. Meh, to be expected. What annoyed me, though, was the baseless accusation that I am anti-oil. Not true.  

What I am against is combusting hydrocarbons when we should be using them, instead, as feedstock for Alberta advanced materials manufacturing industries. Imagine a future where Alberta-based factories turn oil sands bitumen into carbon fibre rather than shipping it to American refineries in Illinois or Texas to be made into gasoline or diesel.

This hypothetical isn’t an idle exercise. Change is coming and much sooner than most Albertans , especially my critics, are prepared to admit.

In addition to a rapidly accelerating energy transition, there is a global materials transition underway. At least that’s what Saudi Aramco VP Dr. Ibrahim Abba and chemist Dr. Paolo Bomben of Alberta Innovates told me. 

Starting with the assumption that Alberta hydrocarbons can be used for non-combustion purposes, at significant scale, follow my argument.

Here’s what I wrote in yesterday’s Note about the nature of this energy transition: “this energy transition is technology-led, unlike every other historical energy transition, which has been commodity-led. When your energy is made in a factory instead of extracted from the ground and combusted, different rules apply, the transition moves at a much faster pace, and the outcomes are different.”

In a nutshell, wind and solar energy, batteries, electric vehicles, heat pumps, and plenty of other clean energy technologies have passed the inflection point on their S-curves and are now competitive with oil and gas-based technologies like the internal combustion engine. In the words of Dr. Doyne Farmer, the triumph of clean energy is now inevitable.

But when are they likely to triumph? Plenty of forecasters have modelled the energy future. The International Energy Agency, which is well respected outside Alberta if not within, thinks peak demand for all fossil fuels will arrive by 2030, followed by decline within a few years.

Assume the IEA is correct

Is disaster ahead for the Alberta oil and gas sector? The Canadian Energy Regulator’s modelling shows oil sands production declining next decade if the industry has to pay even some of the compliance costs of lowering its extremely high greenhouse gas emissions. The efficient projects with an excellent resource will last longer than less efficient ones, but none of the producers will enjoy anything like the current boom.

Industry players have a more optimistic view of a demand destruction scenario, but it doesn’t hurt to worry about the worst case during a period of intense structural change. Fortunately, the oil sands, which comprise about 75 per cent of Alberta’s oil production, have a pivot: the aforementioned advanced materials manufacturing. 

I argue that the threat of a worst case is significant enough that Alberta should begin planning now to build a domestic non-combustion market for bitumen. This has a number of major benefits.

One, extends the life of the oil sands for decades. Instead of facing potential consumption decline combined with a marginal existence, or perhaps even widespread corporate failures, producers could profitably supply local non-combustion demand for decades. Perhaps even into the next century or two, given the huge size of Alberta bitumen reserves.

Two, a new market would provide new sources of revenue to pay for the clean up of Alberta’s unfunded oil and gas environmental liabilities, which likely top $300 billion and counting. Then there’s another $75 billion just to decarbonize the oil sands. Who knows what the bill for the rest of the industry will be? Keeping the industry financially healthy ensures that taxpayers won’t be on the hook for corporate liabilities.

Three, building an advanced materials industry and the necessary supply chains in Alberta will create tens of thousands of new jobs while generating more government revenue to support public services. 

How in the world can that argument be construed as anti-oil? 

The real energy conversation Alberta should be having

Let me be clear: I am not anti-oil, I am anti-Alberta oil and gas status quo. 

My journalism over the past decade has convinced me that the “Future is Electric” worldview is far more likely than the “Oil and Gas Forever” worldview that dominates in the University of Alberta course. If I’m right, then the Alberta industry is staring down the barrel of an existential threat unlike any other it has encountered, including the reviled National Energy Program. 

If I’m right, then Alberta should begin a pivot today away from the combustion of its hydrocarbons and toward non-combustion uses, like materials manufacturing. This is a perfectly legitimate argument, which makes my criticism of the University of Alberta’s course entirely legitimate, regardless of whose noses may be out of joint.

However, as energy economist David Gray is fond of saying about Alberta’s oil and gas hacks, “if it’s not combustion, it’s communism.” That’s about the quality of criticism levelled at my Note. Unfortunately, it’s also the quality of the Alberta conversation about the global energy transition.

Ask yourself this question: is it anti-oil to defend the Alberta oil and gas status quo, whose existence is threatened by the energy transition, or to argue for a pivot to a different market that has the potential to prolong the Alberta industry’s life while providing the revenue to clean up its liabilities?

Another question: whose interests are my critics serving? The giant oil companies or the people of Alberta, who actually own the hydrocarbon resource according to the Constitution of Canada?

It’s time for a new conversation about the future of oil and gas in Alberta. Thank you to the critics of yesterday’s Note for opening the door. If they have the courage of their convictions, they’ll agree to public debates where their Oil and Gas Forever narrative can be properly tested.

If I was a betting man, my money would be on them to avoid that spotlight, mostly because their analysis can’t stand up to close scrutiny.

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My bastardization of Gibson’s quote is inspired by the University of Alberta’s energy transition online training course. This flaccid agitprop for the province’s oil and gas industry should be an embarrassment for any serious institution. Don’t waste your money taking it. But you should think about what Dr. Brad Hayes and friends are actually trying to accomplish.

Hayes is an adjunct professor in earth and atmospheric sciences at the University of Alberta and the head of Petrel Robertson Consulting, described as “Canada’s leading integrated petroleum geoscience consultancy.” What does an oil and gas consultant know about the global energy transition? Not very much, as it turns out. But he does have Alberta’s oil and gas narrative down pat. 

The course is 27 modules long and between eight and 10 hours (I was so bored I eventually lost track) of Hayes and other experts droning to the camera. Very early on, under five minutes, it was clear what they were up to: persuading attendees (I can’t bear to call them students) that the energy future will look very much like the energy past for a long, long time.

The easiest way to explain their plan comes from Module 23 featuring Professor Monica Gattinger, director of the Institute for Science Society and Policy at the University of Ottawa, and an expert I’ve interviewed many times. She cites Dr. Marissa Beck’s 2020 study claiming that there are only two Canadian energy transition narratives.

Reality 1, which I call the “Oil and Gas Forever,” can be heard in any Alberta Tim Hortons or speech by Premier Danielle Smith. This narrative comes straight from OPEC courtesy of its World Oil Outlook 2045 report. Basically, a rising global population will create more energy demand than low-emissions energy (wind, solar, hydro, nuclear) can provide. Global oil consumption rises from 103 million barrels per day today to 116 million barrels per day by 2045, followed by a long plateau and eventually (maybe) a slow decline somewhere off in the foggy future. Natural gas, aided by rising LNG exports, enjoys a similar rosy outlook.

Reality 2, what I call “The World is on Fire,” is the climate crisis narrative. Advocates of this view are said to oppose oil and gas expansion, instead demanding a short phase-out of fossil fuel consumption. Canadian wildfires, drought, floods, and other assorted climate pestilences justify sacrifices and aggressive, interventionist public policies, according to the course.

The course very cleverly leads the attendee to the view that climate activists – including the federal government, which as we all know has it in for Alberta – are ideologues and following their prescription would lead to energy insecurity, energy poverty, and a host of other consequences too horrible to contemplate.

What the course does not do, and this is where I take great exception, is acknowledge that there is a third energy transition narrative. In fact, I took such an exception that Energi Media has created its own training course (the first of many, we hope) to explain the “Future is Electric” worldview.

Here’s the fundamental difference between the two: this energy transition is technology-led, unlike every other historical energy transition, which has been commodity-led. When your energy is made in a factory instead of extracted from the ground and combusted, different rules apply, the transition moves at a much faster pace, and the outcomes are different. 

Don’t take my word for it. The three Energi Talks interviews below – Dr. Doyne Farmer of the Sante Fe Institute, Morgan Solar CEO Mike Andrade, Kingsmill Bond of the Rocky Mountain Institute – explain in some detail why this time the energy transition really is different. You can listen or read the transcripts. 

Because this energy transition is technology-led, technology adoption theory goes a long way to explaining why clean energy costs have fallen so rapidly and why EV adoption has risen so rapidly, for example. This theory is explained in a general way during Energi Media’s 45-minute course, which is meant to be an introduction to the basics. A model, if you will, to help you organize and understand the firehose of energy transition information we’re flooded with every day.

Let me jump ahead to the conclusion: technology adoption theory leads one to a very different conclusion than the Oil and Gas Forever narrative. There is a reason respected forecasters like the International Energy Agency predict peak oil, gas, and coal demand by 2030, followed fairly quickly by steady decline. 

Nevertheless, economic modeling is not a guarantee of the future. The IEA could be wrong. OPEC might be right; I highly doubt it, but it’s not impossible. Which narrative is likely to be correct should be the subject of vigorous debate in Alberta. Instead, the Oil and Gas Forever narrative is lauded as “rational” and “real” while its theory and evidenced-based counterpoint is simply ignored.

That’s wrong.

But you can judge for yourself. The University of Alberta course can be audited at no cost. Take it and the Energi Media course. Come to your own conclusions. Engage us in conversation even if you don’t agree with the Future is Electric narrative. 

Just don’t pretend there is only one way to think about Alberta’s energy future. 

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Canadian media (news and social) is full of analysts pimping for more LNG (liquified natural gas) development on the West Coast while excoriating Ottawa for holding up final investment decisions by proponents. They point to the frenetic build-out of liquefaction plants in Qatar and the US as proof for their arguments. UK-based think tank Ember argues the contrarian case and the news is not good for Canada.

“We are an independent energy think tank that aims to accelerate the clean energy transition with data and policy,” the organization says on its website. 

Ember believes that the transformation of the global energy system now underway will be very fast rather than slow (OPEC) or fast (International Energy Agency). Those scenarios are important to this story.

Global demand looks bleak after 2030

Alberta political, oil industry, and business leaders believe fervently in OPEC’s slow transition narrative. Their view of LNG’s future aligns with the IEA’s STEPS (current policies) scenario. For many, even STEPS is too conservative. They look longingly at the massive construction in other countries and lament that Canada appears to, once again, be passing on an opportunity.

The Ember report is not new modeling of Canada’s LNG prospects. Rather, it is a review of existing analysis. 

“The IEA expects global gas demand to peak by the end of the decade in its current policies scenario (STEPS) and to already be falling by 2030 in its Net Zero Scenario (NZE),” notes Ember. “For LNG specifically, consumption is anticipated to fall from 2030 onwards.”

Natural Resources Canada lists four small LNG liquefaction facilities already in operation, with a further seven “in various stages of development.” Phase 1 of the $40 billion LNG Canada project will export 14 million tonnes per annum. If greenlighted by the consortium led by Shell, Phase II will double that output. The floating Ksi Lisims LNG facility, backed by the Nisg̱a’a Nation and having already received a final investment decision, will make 12 tonnes  per annum. Remaining projects are small, between two and three tonnes per annum.

But LNG proponents like Alberta Premier Danielle Smith are lobbying for much more capacity to be built on the West Coast. They claim that electrifying liquefaction will make Canadian LNG the world’s cleanest (i.e. lowest emissions-intensity), for which customers will pay a healthy premium. Boosters also argue that clean LNG will be used in Asia to displace dirty coal power plants.

“China and India are not switching from coal to gas. A very small percentage (3%) of their electricity is generated using gas, and it is not currently rising,” says Ember, noting that Japan and Korea are shifting toward nuclear and renewables while gas demand is falling rapidly in Europe because of an accelerated decarbonization strategy caused by Russia’s 2022 invasion of Ukraine.

Domestic risks

Ember also questions whether Canadian LNG is competitive: “According to a senior vice president from ST Energy, speaking at a recent Canada Gas conference, a US Gulf Coast offshore project has costs of $700 per tonne compared to LNG Canada at $3,400 per tonne and Woodfibre LNG at $2,400 per tonne.”

Then there is the domestic impact of expanding gas exports. “The US Energy Information Administration has determined that higher LNG exports result in increased domestic gas prices,” says Ember. 

What about all the electricity needed to power the LNG plants? “…they would increase the province’s annual electricity consumption by around 43 TWh,” says Ember’s report. “This is equivalent to more than eight Site C dams and over two-thirds (69%) of B.C.’s entire 2022 electricity demand. Importing just one Site C’s (1.1 GW, 5.1 TWh) worth of electricity could cost around $600 million annually.”

Fugitive methane emissions are a contentious issue. Measurement has been poor, with studies suggesting estimates of 1.5 to 2 times the official data are more accurate. Ember notes that significantly increasing gas production will likely endanger BC’s ambitious climate targets. The federal government is trying to raise 2030 methane emissions targets from 45 per cent to 75 per cent, which is being vigorously resisted by Alberta.

“Research from the Energy and Emissions Lab at Carleton University suggests that the methane intensity of B.C.’s gas is 0.4%,” says the report. “While this is lower than the extremely high methane intensities of Saskatchewan (2.6%) and Alberta (1.8%), it is still double the limits being set by the EU and US.”

To sum up, Ember identifies four significant risks associated with Canadian LNG: falling global demand after 2030; high, uncompetitive costs; electricity demand that BC cannot meet or which will raise prices for consumers; and increased greenhouse gas emissions.

An additional risk

An oft-repeated phrase from LNG boosters is “let private investment bear the risk and cost of stranded assets.” If only that were possible.

Except in extreme cases, security is not taken at the beginning of an asset’s life. Canadian oil and gas liability regimes are based on the assumption that companies will be around to reclaim wells, pipelines, plants, and infrastructure at the end of their productive lives. Despite plenty of booms and healthy profits over the decades, the Canadian industry has a terrible track record when it comes to cleaning up after itself. The estimate for Alberta’s unfunded liabilities alone is in the neighbourhood of $300 billion.

Under OPEC’s slow energy transition scenario, Canadian companies have decades to keep producing and, hypothetically anyway, fund the reclamation of all their unproductive assets, including LNG plants and gas pipelines. 

But under the fast transition scenario, the risk calculation becomes much dicier. The principal clean energy technologies (wind, solar, batteries, EVs) are past their inflection point on the adoption S-curve. They are now competitive with existing energy technologies. The IEA’s STEPS scenario is looking very unlikely. 

My bet is on the APS scenario, with an outside change that 2050 gas/LNG demand will settle between APS and NZE. There is no chance the future will look like STEPS.

But even under STEPS everything would have to break just right for Canada. Asian economies will start displacing coal with gas for power generation. Costs for BC facilities will somehow be lowered. Emissions will be extremely low and buyers will pay a significant premium for “clean LNG.” 

The graphic below showing changes to the IEA’s LNG gas forecast demands over the past five years is a startling reminder of how quickly the global energy system is being transformed. 

Canadian LNG is at best a risky gamble. Considering the worst case scenario, as Ember does, is the responsible thing for Canada to do. 

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Business owners are asked all the time how they intend to repay a loan in a worst case scenario. The lender would be negligent to not ask the question. Why, then, are politicians not asking the same question of oil companies looking for public subsidies (think carbon capture and storage)? 

I call this Mother’s Admonition: Hope for the best and plan for the worst, but under no circumstances should you plan for the best and ignore the worst.

Yet, this is precisely what Canada does. Over and over again when it comes to the oil and gas industry.

Let’s look at just one example, the Alberta oil sands.

Oil sands are the big kahunas of the Canadian industry. Alberta total oil production is 4 million barrels per day and 3.3 million barrels per day (83%) comes from the oil sands. That puts Alberta on par with Middle Eastern producers like Iran and Iraq. Hydrocarbons, led by the oil sands, are Canada’s leading export by a mile, usually twice that of automobiles and parts. Nationally, the sector directly employs 208,000 workers.

The oil sands’ Achilles Heel is greenhouse gas emissions. All by itself, it accounts for 12 per cent (84 megatonnes in 2022) of Canada’s total. Some recent projects with a better resource have emissions per barrel of around 40 kilograms of CO2 equivalent (kg per CO2e/b), which is in the ballpark of the US national crude oil average of 31 kgs. But plenty have much higher emissions, some as high as 160 kg per CO2e/b. The industry average is 68 kg per CO2e/b, one of the highest in the world.

Canadian Energy Regulator modeling shows that if oil demand peaks then declines, causing prices to fall, the cost of decarbonizing that emissions-intense bitumen rapidly leads to falling production beginning in the 2030s. 

That’s the worst case scenario for the oil sands, but it’s entirely plausible, according to economic modeling from BP and many other organizations (the International Energy Agency, BloombergNEF, Rocky Mountain Institute, Oxford Institute for Energy Studies, to name a few).

If oil sands companies begin to fail, or if their revenue is barely enough to survive, who covers their losses? There are three types of losses taxpayers should worry about because the numbers are really, really big.

#1 – $130 billion of environmental liabilities

Who cleans up old assets after they no longer produce oil? For the oil sands, those liabilities could be well north of $130 billion. You read that correctly: billions. The reason for the huge number is that Alberta has never, ever taken security to pay for reclamation at the beginning of an asset’s life. Instead, it assumes the company will be around to pay for clean up. What happens when those companies can’t pay?

This is a deeply flawed system that Alberta refuses to change. The federal government doesn’t have the constitutional jurisdiction to change it, even if it was inclined to, which it is not.

#2 – $50 billion of decarbonization subsidies

The second type of loss is the subsidies the oil sands are demanding to decarbonize. The Pathways Alliance, the oil sands companies’ lobby group, puts the bill at around $75 billion, of which Cenovus executive Alex Pourbais has said that governments must pay $50 billion. Ottawa has already provided over $7 billion of investment tax incentives just for the oil sands and more is expected. The Alberta government announced its own support program.

The companies are asking for much more. They hint that current carbon capture plans may be delayed or canceled if more regulatory and financial “certainty” is not provided by governments.

#3- Stranded assets (who knows?)

This number is harder to pin down. Environmental liabilities are a stranded asset, so they aren’t included, but carbon capture and storage infrastructure is not. 

Will taxpayers provide the subsidies to build capture equipment for oil sands projects, the pipeline feeders, the CO2 pipeline to a storage hub near Cold Lake, Alberta – then have to pay down the road to rip up all that material and reclaim the landscape?

Yes, in the event of a worst case scenario. There is no one else to do it. Unless, of course, governments decide not to clean up anything and Alberta is left with 9,000 square kilometres of heavily disturbed northern ecosystem filled with dozens of huge ponds filled with toxic tailings and several dozen giant industrial complexes, including all the associated infrastructure.

Bottom line: many hundreds of billions on the line

Add up all the potential costs and the worst case scenario for the oil sands is a massive expense. Certainly more than Alberta taxpayers could manage, which means all Canadians would be on the hook.

Are politicians, regulators, and industry considering that worst case scenario?

About six months ago, I emailed the offices of Natural Resources Minister Jonathan Wilkinson and Environment and Canadian Climate Change Minister Steven Guilbeault. I asked if the ministers had considered worst case scenario modeling when considering carbon capture and storage subsidies. A straightforward answer was not forthcoming.

During Alberta Premier Danielle Smith’s press conference at September’s World Petroleum Congress in Calgary, I asked her if she had a Plan B if her rosy view of the oil and gas future didn’t pan out. There is no Plan B.

The reasonable conclusion is that the Alberta and Canadian governments are committing taxpayers to unimaginable amounts of potential financial obligations and liability without properly assessing the risk of a worst case scenario.

And that’s just for the oil sands. There is still Alberta and Saskatchewan conventional oil and gas production, British Columbia gas production, and the East Coast industry to consider.

How do politicians sleep at night? CEOs presumably sleep like babies because they are happily transferring as much of their risk as possible to the Canadian public. 

In the end, it may be voters laying awake, staring at the ceiling, wondering how the bills will be paid in the harsh light of day.

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Spencer Dale warns that transitioning too slowly to clean energy – a disorderly transition – now will lead to a rush after 2040 that essentially breaks the global energy system as we try to stay within the 2C by 2050 carbon budget. Good advice, I suppose, but wrong. Chaos is our friend. It is the only force that can break the inertia of the energy status quo that is holding back the energy transition in Canada. 

Oil giant BP’s chief economist argues in the Energy Outlook 2024  that the world is in an “energy addition” stage, consuming increasing amounts of both clean energy and fossil fuels. Instead, we must switch to “energy substitution” as quickly as possible. Until we do, greenhouse gas emissions will continue to rise, as they have inexorably done, except for the brief blip of 2020 thanks to the COVID-19 pandemic.

But how to switch from the addition stage to the substitution stage is the challenge. Dale doesn’t have much to offer on this point. There are a couple of models to consider, neither of which are particularly palatable.

The first is to treat the climate crisis as a war. Governments direct companies to manufacture solar panels, electric vehicles, and batteries instead of televisions and other consumer products. Climate activist Seth Klein outlined this strategy in his book, “A Good War: Mobilizing Canada for the Climate Emergency.”

The second is to emulate China. Its more authoritarian government decided two decades ago to invest heavily in clean energy technology manufacturing and adoption by consumers and businesses. While not a “command and control” economy, the national government sets priorities, funds them, and directs provincial and local governments to follow suit. When the Communist Party decided to pivot to clean energy, China pivoted. Now, China is easily the world’s clean energy superpower.

Neither of these options is palatable to Western citizens. Nor should they be, for reasons that ought to be self-evident.

But the West’s energy transition still has a serious problem to fix: the power of energy incumbents. Oil and gas companies, electric utilities, their supply chains (think chambers of commerce), regulators, cautious politicians and governments – in effect, the status quo.

Alberta is the Canadian poster child for the power of incumbents.

Business leader Alex Pourbaix of oil company Cenovus explicitly argues that it is “energy diversification,” not transition. Alberta Premier Danielle Smith’s conservative government first imposes a moratorium on wind and solar development, then brings in rules that are a de facto “soft” moratorium. The list of examples is long. But Alberta isn’t alone.

British Columbia only recently directed its crown-owned utility to plan for rapidly growing electricity demand. Ontario was even slower off the mark and continues to fixate on nuclear, with eye-watering bills to refurbish existing reactors. Saskatchewan, whose government refuses to collect the federal carbon tax, is a clean energy basket case.

To paraphrase Yoda, energy system inertia is strong with these ones.

A big reason is that because Canada insists on selling energy transition policies as climate action. This approach will not work, as I argued in Tuesday’s column, because Canadians (like most citizens in Western nations) mostly pay lip service to addressing climate change. The much better argument is that, in many cases and soon to be in all, electric technologies like solar, batteries, and EVs are now better and lower-cost.

What governments won’t do, markets will, and if Canada waits for the new clean energy technologies to drive systemic change, then change will not just be “disorderly” but chaotic.

Bankrupt oil companies leaving behind hundreds of billions in environmental liabilities. Stranded fossil fuel assets, many of them subsidized with taxpayers’ money, galore. Much less tax revenue to pay for healthcare and education. A decimated workforce. Failed businesses left and right.

A Canadian rustbelt like the one in the American Midwest.

Incumbents circa 1980 probably laughed at the prospect of a de-industrialized United States, just like Smith and the oil CEOs deride the idea of a rapid decline in oil demand after 2030. Well, the US switch from an industrial to a service economy was a structural one (just like the current switch from hydrocarbons to clean electricity) and look what social and political mayhem that wrought.

Canada is headed down a similar road and changing course now seems impossible. That leaves only the chaos of a “disorderly” transition.

If that’s what it takes to break the stranglehold of Canada’s energy incumbents, then so be it. 

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In episode 313, political scientist, Jared Wesley, explained that Smith is guilty of creeping authoritarianism. Waiting through the labels to get some clarity about what is clearly an alarming political trend in Alberta, but also in other parts of Canada, is confusing. Recently, however, I ran across an excellent essay titled authoritarian libertarianism and the freedom to do what I say. The author is retired professor of rhetoric and writing, and former director of the University of sorry. The University Writing Center at the University of Texas at Austin, Patricia Roberts Miller, And I’ve asked her on Energy Talks to help us better understand modern politics in both Canada and the United States.

So welcome to the interview, Trish.

Trish: Thank you so much for having me.

Markham: This is a puzzling question. Trying to sort out what in Canada is called the freedom movement, the convoy movement. We had I mean, these folks actually occupied the the nation’s capital for 3 weeks in October, and the and the the federal government had to employ the Emergency Measures Act. Well, what used to what came Canadians are sitting there going, no. No.

No. It’s the act that superseded them. Whatever. The the, the to clear them out. It was a national emergency.

And since then, they’ve been trying to, you know, they bubble up every once in a while, and they’re but in Alberta, there’s a government that essentially is the personification of those ideals, and it’s very much like Trump and and MAGA ism in the US, at least from my point of view. And we’re having trouble getting our heads around this, and I read your your our your essay. It’s excellent. And maybe let’s start with if you could kinda give us an overview about what you think about authoritarian libertarianism.

Trish: Well, I think that it starts with not acknowledging legitimate disagreement, and not acknowledging uncertainty. And so it posits that there is some group, and it’s always in group, so is us, who have the truth, who perceive the truth directly in an unmediated way. And so freedom is the freedom to do what they say, the freedom to do what they believe. Isaiah Berlin, a long time ago, talked about the difference between freedom from and freedom too, and what I find interesting about this sort of libertarian authoritarianism is it kind of does both. That it’s the freedom from any rules or restrictions you don’t like, or that don’t benefit you, and the freedom to do what your authorities, the authorities in your in group say is the right thing.

Markham: Is this rooted I remember back in, you know, when I was an undergraduate in the early 19 eighties at the University of Saskatchewan and Christopher Lasch’s book came out, the culture of narcissism. Mhmm. And and

Trish: that was a

Markham: you know, it it it’d only been out a couple of years. It was a big deal, and and then it, you know, was often quoted and and talked about, on campus. And here we are, 40 some years later, and when I listen to or or engage with people who are fall into this authoritarian libertarian camp, it’s very often it seems narcissistic. It’s like, I wanna do what I wanna do. Like, if I don’t wanna wear a mask and I don’t wanna get a vaccine and you die of COVID, well, too bad.

It’s just that’s, you know, that’s natural selection or whatever. And and it that seems incredibly narcissistic to somebody who was raised in an area of, an era when public health was very important. We all got vaccinated. We all did all sorts of things to protect our fellow citizens. What role does narcissism selfishness play in this in your theory?

Trish: That’s a great question. And I’ve sometimes described it as narcissism. I I’m not sure that there’s that that narcissism arose when Laff said it did. But I do think that, say, the experience of World War 2 caused people to be much more sensitive to the public as a whole, and the needs of groups as a whole, than, you know, some other eras might have been same the same thing I would say with the the Depression. The Depression, got people to think about the public good.

And, in the early late 19th, early 20th century, in both the US and Canada, there were movements for saving public lands. So there was a notion of the public. And public good, public land, public resources, all that. And I think that’s kind of what’s gotten lost, is that sense of a public of which we’re a part and and which we should all work to preserve. I think some of it has to do with I hate to say this, but I think some of it has to do with the Internet.

And there’s research that suggests that perhaps the the way that the media used to work, you would tend to see more centrist media. And that now it’s possible to to get into a situation where you’re only gonna hear people who agree with you. And the research is really clear on that. The more time you spend around people who agree with you, the more extreme your beliefs become. And it doesn’t matter whether it’s about, you know, what what where it is on the political spectrum or even if it’s political.

Markham: Gotcha. Your comments about the the notion of the public good is very interesting, to me because, I I think back to my parents, my grandparents, people of that age, and they really did have a an ethos of the public good. And if you look at Canada, you know, we have we have a a social democratic party here, the new democratic party that generally holds nationally about 18 to 20%. It forms government in, the the Prairie provinces in particular on a regular basis. In fact, there there’s one now in Manitoba and in British Columbia where I live, and and they put a high value on, common goods like public health care, public auto insurance, that sort of thing.

And in Alberta, it’s exactly the opposite. It’s very much it looks reminds me much more of Texas, you know, much more rugged individualism. In fact, they often compare themselves to Texans. And my favorite line about that is they would say, oh, I’m a redneck. I say, dude, I’ve been to Texas.

You’re a pinkneck at best. I’ve seen real rednecks. But but there is a stark difference here, and and, of course, the freedom movement in Canada has deep roots in Alberta. The leadership came from Alberta. And so given the fact that you live in Texas, so you’re familiar with that kind of culture, what role does all of that play in authoritarian libertarianism?

Trish: I I have one thing that I think makes Texas somewhat different is that, you know, Texas was, a a Jim Crow state, and it was a slave state. And Texans don’t like to admit that. They they really will not admit that there was a substantial amount of slavery here and that slavery significantly contributed to the, to the economy. They also don’t like to admit that the Jim Crow operated against Mexican Americans as well as African Americans. And so the the note the the the narrative that people will give is that, there’s this rugged individualism because people had to depend on themselves because they were out.

But actually, that’s not how it worked. In in a real in that kind of pioneer environment, that’s when you’re especially dependent on the people around you. And you you really need them to help build a barn, and help you out when, you know, your cattle got ticks. So there’s there’s this real discrepancy between what the history actually was and how people narrate that history, and that narrative is what contributes to this sense that I can just do whatever I want. I should be able to do whatever I want, but you shouldn’t.

Markham: In Alberta’s a special case because there’s a fair amount of public opinion polling and scholarship that shows that half or more of Albertans identify so closely with the oil and gas industry that an attack on the oil and on oil and gas, they perceive that as attack on their own identity. And I wonder to what extent like, you you mentioned, earlier in, in our conversation, the role of change. And the oil and gas industry is is been profoundly disrupted even though people are trying to deny it. You know, there have been tens of thousands of jobs lost, and and everybody can see the changes that are that are coming. And I wonder the role of this the disruption plays in communities, in provinces, where the in group, as you call it, their identity, their way of thinking is being profoundly challenged like that.

And then this is a reaction. The their authoritarian libertarianism is a reaction against that disruption.

Trish: Yeah. Well, so I’ve written a couple books on demagoguery, which is essentially authoritarian rhetoric. Although it often, positions itself as though it is populist rhetoric, as though this is rejecting an authority, rejecting some someone who’s trying to force bad things on us. And so one of the very strange things about authoritarian rhetoric or demagoguery is that, people claim to be victimized. And they claim to be victimized by some much more powerful group that is usually just a hobgoblin.

And so I I tried to figure out at one point if it correlates to massive disruption and to change, and I I couldn’t get that to work. And one of the reasons I I couldn’t find some sort of correlation between the rise in authoritarianism and, and significant change is there’s always significant change. I I couldn’t find a a control group, essentially. You know, I couldn’t find a time when there wasn’t significant change. It seems like it’s more a media issue.

The rise of demagoguery seems to correlate with access to new media, And with people using demagoguery to get viewers, buyers, readers, clicks. So that’s one answer. The other thing, though, about change is that, I do think that there’s something about when when people’s understanding of themselves gets, re I hate to use this word, but reified, like, thrown into the past, so it’s always been that way. Then they they believe that we’re they’re confronting something entirely new. And, you know, Texas has been dependent on oil and gas for maybe a 100 years.

But even then, not I I don’t know the exact moment when that became dominant. It’s probably more like 50 years. And so I think sometimes if people can understand, we’ve been through this before, it’s okay, change happens, it’s You’re gonna run out of oil and gas at some point. That’s how resources work. So, and I think often what authoritarianism does is it tells people they don’t have to think about the long game.

Markham: There’s very much a a sense of victimhood in in Canadian authoritarian libertarianism. And and and again, getting back to Alberta, it’s particularly strong there because the, back in 1980, then prime minister, Pierre Elliott Trudeau brought in the National Energy Program, which was it’s like a legend, in in in Alberta and how how it would victimize people and, you know, I’ve I’ve had I had my lawyer in in Calgary tell me that, you know, he knew people who jumped out of windows, you know, because of that. They were financially ruined and and whether it happened or not, it’s it’s part of the zeitgeist of of being an Albertan is that you hate anybody named Trudeau. Well, as it turned out, Pierre’s son, Justin, is now prime minister of Canada, and it’s it’s the handiest you know, he’s just a whipping boy for for the for Albertans and in particular, premier Smith. And that she continually accuses him of making Alberta a victim, trying to shut down oil and gas, of, you know, of the climate policies that she that the federal government inflicts upon Alberta and upon the industry.

And I wonder and we see that all the time in in in is this sense of victimhood as a means of, I don’t know, expressing angst, motivating other people. I don’t know what it is. But what role does that play, the sense of victimhood in in authoritarian libertarianism?

Trish: It justifies the authoritarianism. So what it does is is say so people, again, have a tendency to think of minors. And so we tend to think about there’s a victim and a villain. And if we’re victimized, that means the other group is a villain. And if the other group is a villain, then there are no holds barred.

Then we’re justified in violating all the norms of democratic practices, engaging in legal things. It’s, in fact, I have a book coming out in July, of deliberating war, that is exactly that argument. That when people see themselves as faced with an existential threat, you know, that there’s this group that is out to kill us, of course, we don’t hold them to the same standards. Of course we say it’s it’s you you need to do what you need to do, and it’s a state of emergency and a state of exception. So what people will do then who are, maybe they feel justified for various reasons, but they will, inflate the threat in order to say this is an existential threat, and therefore, we shouldn’t be held by the very standards we hold others.

So we get to do whatever we want or whatever is necessary and we’re justified in doing so because we’re the victims here. And so it’s difficult for people to understand that that binary is rarely the case. Especially when you’ve got a bunch of people who are working together, you know, a community, a nation state, a city. There’s no policy that’s perfect. No policy is gonna make everybody happy.

And in fact, no policy should make any one group perfectly happy. The whole point of of a non authoritarian system, that is democracy, is is everybody gets a little hurt.

Markham: Right.

Trish: And, you know, you try to balance it out, and and you you try to make sure I think it’s, Jan Werner Mueller who says the thing about democracy is nobody should always be the loser, but everybody needs to lose a little.

Markham: Sure. It’s like a good deal. Right? Exactly. Happy.

But Yeah. It works for everybody somehow. Yeah. One of the things that I I I’m wrestling with is this idea that authoritarian libertarianism is almost it’s like an oxymoron. It’s like military intelligence.

The two words don’t belong together. Yeah. And it and it doesn’t it doesn’t intuitively make sense to me. But in your example of, 17th century Massachusetts Bay Colony, what they did around freedom of conscience, I think is a good example of why they do fit together. And maybe you could just explain that example to us.

Trish: Well, it it it’s a fascinating situation, actually. So, the New England Puritans had been persecuted in England. And so then they were really pretty coherent and cohesive, and they got along. And then they moved to Massachusetts, where they were no longer being persecuted. But central to their sense of identity was that they were persecuted.

That was important to them, because it proved that they were following God’s will. And so they kind of need to find new persecutors, is part of what happened. But they they got into a a fight about theology so abstruse that scholars still have trouble explaining what the disagreement was.

Markham: How many angels can dance on the head of a pin? That kind of

Trish: thing. Yeah. It really it and so they they each called each other antinomian, which is a terrible thing to be. So it’s often called the antinomian controversy, but it’s worth remembering everybody called each other that. So, so then what the part of the debate had to do with, salvation and and course of events in salvation.

It’s really too absurd, and I’m not gonna go there. So, what what but they needed to have freedom of conscience. That was part of their, agreement with the crown as to why they could have this colony at all. And so they’re having to defend it. And I think they really believed it.

But so you get these things like John Cotton writing this long, it’s like a bad Internet argument. So he and Roger Williams got into this argument, and each response is longer than the previous one. And and but in it, John Cotton kept insisting that it was freedom of conscience to banish people who disagreed with the authorities, you know, take away their property, hang quakers, because the freedom was the freedom to be right. That’s the that’s the freedom that you have. And freedom of conscience means the freedom to follow, what the authorities say.

So part of what they sincerely believed, I think, is that their opponents didn’t really disagree. The opponents knew they were wrong and secretly agreed, but were so corrupt by Satan that they were lying about what they believed. And so, I think that’s one of the things that is, really interesting in talking to certain kinds of people, is that they they believe that secretly everybody agrees with them.

Markham: Yes. I would agree. I run it into that myself, and I’ve had these discussions many times on what we won’t call them discussions. I I’ve I’ve been attacked on social media many times by folks who identify with the freedom movement, and one of their arguments is that, by virtue of being a journalist who doesn’t agree with their view of the world, I’m therefore I’m I’m by definition corrupt. I’ve contributed to a corrupt society, and frankly, I should be hanged in a Nuremberg like, trial.

And, I it’s astonishing how many people have called for me to be hanged, and, well, here I am still, you know, unhanged. But even the the this reminds me of a comment that was made by a very well known Canadian named Brett Wilson, who lives in Calgary. He made his fortune in in oil and gas. He was a reality TV star for a time in the 19 nineties or, you know, was the dragon’s den or the shark tank as you would call it in in the US. And and, he sees himself as a thought leader.

Right? And there was a big debate 4 or 5 years ago over foreign funded activists, attacking the oil industry in Canada, and he said that any the eco environment environmentalist, these these activists should be hanged. Mhmm. And then when he was called out for it, he doubled down on it. Mhmm.

And so here’s somebody who is, you know, identified as a thought leader within the Alberta, oil and gas industry, calling for this kind of extreme behavior because somebody else violated that sort of in group norm that you’ve identified. And it’s one thing to have, you know, sort of folks from the fringes doing it, but this guy is, like, mainstream establishment in Alberta. What what do you would you make of that?

Trish: That is so tricky. And and it’s, I think I call it strategically ambiguous hyperbole because it it enables a person to to do 2 things at once, to make these extreme claims, and to deny accountability for inciting violence by saying it’s just hyperbole. But they wouldn’t really mind if somebody took them up on it and didn’t see it as hyperbole. And that’s what makes it really, really, problematic. But also notice that so in group, out group, as far as social scientists think of it now, is not the group in power versus the group out of power.

The in group is the group we’re in. And so, you know, for me, professors is an in group. For someone else, that’s an out group. But, but notice that what you described is you have a policy disagreement. And instead of arguing policy with you, they instantly shift to your identity and say that you’re a bad person because you disagree with them.

And the fact that you’re a bad person proves that your argument is wrong. So it’s a way of completely avoiding the responsibilities of making a decent argument. And I think in some cases it’s cynically done on the part of political figures and and repertoires and pundits who don’t have a good argument.

Markham: Yeah. I would have to I I’m fond of saying, Trish, because, as a journalist, and I’d say particularly over the last 5 years, as the global energy transition really began to accelerate the year or 2 prior to the pandemic. I have spent so much time with data, with evidence, with expert interviews, you know, reading IEA reports and other kinds of reports. And I’ve I’ve really steeped myself in that because my background I, is, you know, when I was doing graduate work 40 years ago was in energy transition. Mhmm.

And so I had a theoretical understanding that very few journalists would would have. Was it a big advantage for me? And so I went looking for evidence to how does that fit to the theory and how are we gonna explain this? And the reason I bring this up is I would say in the there has not been one Alberta oil and gas thought leader that I’ve engaged with or whom I’ve, you know, read what they, they’ve written or or heard what they’ve said who could make an evidence based, data based argument. It’s all narrative.

It’s all rhetoric. It’s all demagoguery. And they they appeal to they make these emotional peels that, you know, they’re pushing buttons in the Alberta politic that, that they think are are maybe even universal that apply out across Canada. And, for that experience lines up exactly with what you just described.

Trish: Mhmm. Yeah. Well, and then the another move that people will make when they they’ve got a bad argument is they got a motive. And so they’ll say, you’re just making this argument because you have this motive. You’re you’re a lefty.

You’re part of the woke mob, whatever. And you can’t argue that. Like, you can’t argue motives, right? And what I have often found helpful is to ask people, are you open to persuasion on this? Is there any data that would cause you to change your mind?

And if they say no, then you say then you don’t have a reasonable argument. And that makes them mad. But I you know? But but I I I do think that that, you know, as I said, I think for some people, it’s cynical. And we sell this with, tobacco.

You know, we saw this with lots of different industries or whatever were just losing they they didn’t have a good argument. And so they started fabricating data, they’re picking studies, and, but then also demonizing deliberation, and demonizing difference of opinion.

Markham: Why then is now why is now different? Because the the kind of, you know, rhetorical dodginess that you describe has been part of politics for a long time. It’s not like we invented this. It’s not like Trump invented it. It’s not like Danielle Smith invented it.

But why is it so prevalent now? Why is it being weaponized? And who’s weaponizing it? That in a way that it wasn’t weaponized in the past.

Trish: I think it was weaponized in the past. And I don’t know much about Canadian history, but I can tell you that this is exactly what happened in the antebellum era in the South. And the same things about any criticism slavery meant that you were an abolitionist, if you were an abolitionist, you were satanic, and you were inciting violence. And so, so that’s why, you know, in the antebellum South, teaching slaves to read was illegal. Criticizing slavery got people hung.

It wasn’t hyperbole, they were literally hung. You know, there were fantasies of all these, conspiracies. So that’s a time when the US went through exactly this. It was regional in a way that the current thing isn’t. Anti communist hysteria in the fifties actually, in the twenties, which led to a lot of, you know, throwing people out of the country, deporting people to various places.

And then again in the fifties, the the anti communist hysteria, you know, was pretty bad. What happened in the fifties, it calmed down a little bit because neither the Republicans nor Democrats would fully take it up. And so, you know, they they sort of did, but not not completely. So that it continued and certainly contributed to things like Vietnam, and, you know, intermittent purges on university campuses and things like that. So it’s it’s not the first time.

Markham: So but all the examples that you’ve just used strike me as being times when the established order was under threat.

Trish: Mhmm.

Markham: And and people clapped back. You know, this is this is a a reaction to that. And so if we don’t wanna call it disruption, but we think of it in terms of the status quo, being threatened, that describes Alberta perfectly.

Trish: Well and it’s often I was gonna say, and often in those cases, a relatively recent status quo is part of what’s interesting. But then also, I think that, the the twenties, communist hysteria was, partly to sell papers. And, I mean, I I do think that there was just some short term benefit to people who saw that, in the David Halberstam argues that the reason that anti communism was a big deal in the fifties was that the Republican party needed something. The Democrats had done incredibly well for 12 years, and so they they needed something that they could turn into a a mobilizing passion.

Markham: Does that it’s often said that history doesn’t repeat itself, but it echoes.

Trish: Mhmm.

Markham: And is that what we’re seeing here? Is this is, you know, nothing new under the sun. It’s it’s a an echo of other historical trends and events that have happened in the US and Europe and and elsewhere, and we shouldn’t really be surprised by it?

Trish: No. But we should be worried. It didn’t end well. You know, it doesn’t end well. And it doesn’t end well for the very people who take it up, which is part of what’s really interesting about it.

And I think some of the people, as I said, take it up out of a sense of short term gain. They think they’re going to benefit by this particular party or figure being given all this power, by undermining norms of democracy and legality. And they do get a short term, but but it it doesn’t end up well for them in the long run either. And then I think also that there are people who, if you say to them the situation is complicated, they’re just gonna be like, I don’t wanna hear it. That’s no.

And then if you say to them, the situation is simple, they’re gonna go for that. And so it’s it’s partially our desire for simple solutions. And thinking about the world in terms of good people versus bad people is much more straightforward and much more mobilizing than seeing it as as long term versus short term, different interests in conflict with each other, ambiguity about data. That sort of stuff is just not and some people get act actively angry.

Markham: If it doesn’t end well, are there examples where the political the democratic institutions, the the political process manages to sort out this conflict before it turns into violent conflict and threats to the institutions and perhaps even civil war? Or do these echoes of history always turn out much, much worse than than we we fear?

Trish: Well, I think, the the times that it’s it’s backed off, you know, it’s it’s scaled back down. Some sometimes, unfortunately, what it has to do with is a common enemy. And that’s kind of what psychology says, right? So that we can get along because we’ve got a common enemy. So sometimes that’s that’s what has done it.

And and then sometimes I think it’s members of the elite, deciding this has gone too far and we’re not okay with it. So that’s what happened with McCarthy in the United States. It was actually, you know, well respected people who said this is not okay. So that I think that’s part of it, and I think an important part is is various leaders being brave enough to say this is democracy is our system, and we need to lose occasionally, and we need to respect the rules. So, yeah, I think those are the various times when either the public or elite with power managed to say, we’re not gonna go there.

Markham: Yeah. The the, the two examples that keep coming to mind are Donald Trump in the in the US because, I mean, yesterday, he was convicted on 34 felonies and and and apparent you know, there are more in the in the offing, more trials coming up and and he’s you know, that just seems to be headed for a cliff. It’s I don’t envy your country in in November. It’s gonna be very, very difficult. But Alberta is kind of in the same imagine if Trump won.

You know? That’s Alberta. And and, it’s it is very difficult, and one of the difficulties is the requirement to conform.

Trish: Mhmm.

Markham: Like, I I had I’m not I little personal history here. I’m not opposed to the evolution of oil and gas moving. In fact, I argue that it should pivot into providing feedstock for, advanced materials manufacturing. We should stop burning it. You know, bitumen is just way too valuable as a feedstock, for that than a feedstock for refineries.

So I’m criticizing the oil sands industry all the time and their leaders and policies and so on. And I was having coffee with somebody from the industry, and they were saying, well, you’re perceived as hostile to the industry. And I said, I’m not hostile. I’m critical. Those are 2 very different things.

And the fact that you don’t understand it is a real serious problem, and then your your bosses don’t understand it. And there’s this tremendous need for conformity in Alberta around the basic principles and and, you know, the the adherence to oil and gas, you know, has almost become a cultist. You know, we love oil and gas bumper stickers. And what do we make of that? What role would does that play in authoritarian libertarianism?

Trish: Yeah. That’s the base. Right? To and it that’s that binary thinking of that you’re either with us or against us. I wish people would quote the other one from the Bible, which is those who are not against us or with us.

Us. But anyway, yeah. And so it’s it’s seeing but I also feel like there’s, some people believe that if you are just passionately, fanatically committed to the in group, things will work out, and and the will will triumph. The will doesn’t always triumph. And so fanatical commitment is not necessarily gonna solve it.

And and that’s what I think a lot of people feel, and especially when they they feel like they might be wrong. So there’s really interesting, work that has been done by social psychologists showing that, and a lot of people respond to uncertainty by increased fanatical, in group loyalty.

Markham: So that would that would then, I think support my argument that disruption does play a role in the rise of Uncertainty

Trish: does. Yeah.

Markham: Yeah. And and and certainly that would be the case in Alberta. And what’s really interesting in Canada, and I don’t know. I’ll I’ll ask you whether it’s also true in in the United States because we do know that there’s some regional factions within the US that has led to the rise of of the MAGA movement. But in Canada, it’s very interesting because, British Columbia is where I live on the West Coast is perceived to be more like California, you know, kind of hippie granola crunching, you know, lefty leftyism.

Alberta and Saskatchewan are seen as, you know, very much like, you know, bedrock conservatism and really authoritarian libertarianism. I think that’s the the root of it. And then of the other provinces are kind of, I would say, in the Canadian norm. You know, kind of that mushy centrism that that is defined Canadian politics for a long long a long long time. And so that means that the authoritarian libertarianism in Canada, does have a regional basis, but at the same time, the federal party that embodies authoritarian libertarianism, the conservative party of Canada is leading the polls by a long a long shot, and and that seems to be another disconnect here.

How do we square that? I mean, are people just not paying attention? You know, the the CPC leader, Pierre Poliev, is very much hitting the the buttons, the right buttons for, you know, for millennials who can’t buy a home, that that sort of stuff. And and he makes it really, really complicated to when you start framing it around authoritarian libertarianism, it’s more complicated than that. How does that apply to the US?

Trish: Well oh, so many ways. But I think something that has to be discussed in the US, and and I I know that it’s true in Canada too, is, the role of hate talk radio. And, and also these, you know, media that have discovered that outrage about the other is the best way.

Markham: Can I interrupt for just a second? I have I cannot not say this. Danielle Smith, prior to becoming premier, spent 9 or 10 years as a conservative talk radio host.

Trish: Yeah. Yeah.

Markham: That can’t be a coincidence.

Trish: No. No. And, I mean, and I also I I I really wish that we would stop talking about the term conservative because these people are not conservative. They’re radical.

Markham: Yeah. Good point.

Trish: You know, and to some extent they’re reactionary, but they’re not actually reactionary in terms of their policies. They’re reactionary in terms of their rhetoric. Of saying that liberals have gone too far, the woke mob, all this stuff, and so we have to go along with these policies, which sometimes they pretend were policies in the past, but actually weren’t. So, yeah, I think that’s that’s an important part of it. I also think that that the the tendency we have to talk and term as though politics is either a binary or a single axis continuum is really destructive.

Because in point of fact, what matters most is how pluralist somebody is. That is how open to disagreement. And that’s the opposite of authoritarian. And so, authoritarianism aspires to univocality, and perfect conformity, and agreement, and, a kind of top down organization. And so and plural you can be centrist and authoritarian.

I mean, I’ve met them, and they just think everybody has to be centrist. And you can be conservative in the sense in the old sense, you know. And and that can make you tolerant and can make you so so I that’s why I think it’s it’s really useful to think about authoritarianism in regard to all this, is because it’s not particular to any, place on the political spectrum, but it is it is probably one of the most important axis.

Markham: Right. But right now, at the at this moment in time, authoritarianism seems to be rising on the right as as opposed to the left, or you’re you’re hesitant, it looks like.

Trish: Yeah. Yeah. Because I don’t like right versus left.

Markham: Yeah. Yeah. Well, fair enough. It neither lies a rule either. So

Trish: Yeah. Because it it’s doing that thing that, you know, of conflating identity and policy. And in fact, you can have people so this is this is something else that is really interesting in regard to energy policy, is that you can have, people who don’t actually agree with whatever the energy policy is. You know, the Trump talks tough about about tariffs against China, and that is not something that actually all of his base supports. They don’t know that that’s what he wants to do and what the consequences would be for them.

So also, when what, what that talk about left versus right does is it keeps us from talking about specific policies. And that’s when I think people would recognize that that politics is actually very complicated, and what’s gonna help some people in this region is gonna hurt people in that region. And and also what what happens with energy policy, this is my crank theory, is that it’s something that, one political scientist calls defensive avoidance. That people don’t like what they think the policies are that necessarily come from acknowledging climate change, and so they deny the need. And this is really common.

If you don’t like what you think the policies will be, you pretend there’s no need. And and actually, if we could do what you were just describing, say, okay, there is a need, climate change is a problem, but we don’t necessarily have to go back to eating rocks or something. I mean, there there are lots of things that we might do, and let’s talk about what those different policies are that will be different from what the industry is doing right now, but not necessarily the, you know, Kyoto protocols.

Markham: Yeah. I I approach that from a different point of view. My I I I do talk about climate change, but the focus of my journalism, is, the energy transition. Because in from my point of view, the climate policy fostered the development of of wind and solar and EVs and batteries and all of that along the bottom of the s curve for decades. But in since 2020, it’s clear that all of those technologies have passed their inflection point.

So now it’s all about the adoption of the the clean energy technology. And the point I make to the to the Alberta oil and gas industry is your business model has been disrupted. It’s coming for you. And and the theory and the case studies show that while you may that they don’t come for you when you’re, when you’re having a bad year, they come for you when you’re at the top of your game, when you’re the best managed, when you’re making the most profit. When you think you’re invincible, that’s the time they get you.

Yeah. And it’s very clear that the electrification of transportation, which displaces oil, that’s the existential threat, and that is anathema, absolutely anathema in in Alberta because they don’t wanna hear it. Yeah. They don’t it it because it would mean that they would have to do something very radically different in preparation for a threat that doesn’t arrive for 5 or 10 years maybe.

Trish: Yeah.

Markham: And and so they do all of the things that you just described in in you know, I’m I’m woke. I’m stupid. I don’t understand anything. I don’t I don’t know. I just I oh, I I’m I’m not an expert in oil and gas.

I don’t work in the oil and gas. Therefore, I know nothing about it. You know, all of that, they attack me personally, and nobody ever attacks nobody ever responds to the actual argument and the evidence that I’ve I’ve I’ve gathered, to to back that argument. And Yeah. And that then it it is a a a disruption.

It is very much an attack on the status quo that they’re just beginning to feel now.

Trish: Well, it’s yeah. It’s just a way of sticking their fingers in their ear and screaming

Markham: Good way to describe it.

Trish: I I I don’t know if you know the book, How Nations Fail, but, it’s a really good book, and and that’s what it’s about. It’s about these various nations, who get attached to some industry or, and and in their striving to protect the status quo, end up, making disastrous decisions. But they really resist disruption, is what he talks about. And just to be clear, it’s not, what I’m saying is that I think there’s always disruption going on, and I don’t know why it sometimes leads to demagoguery and sometimes doesn’t. But it’s it’s definitely when there is demagoguery, there’s always been a disruption.

Markham: So I think I have a story to tell that you as a professor will appreciate. When I was in graduate school, my historiography professor, said we had to pick one historian and write about one of their major works. And I, not knowing any different, I basically threw a dart and got Arnold Toynbee in the study of history, all 11 volumes of it. Yes. I know you you you’re familiar with Toyngby.

It it it was a bit of a slog. But the point I took away from from Toynbee’s, you know, the great study of history, writ large over 1000 of years, is that, civilizations rise and fall, and generally when they begin to stumble is a crisis in leadership. The elites make bad decisions, and it seems like we’re kind of headed in that in in the western world and and in Canada and North America in particular. And that gets me into your discussion about expertise and experts

Trish: and

Markham: how we perceive them, those of us who are in the pluralist camp versus those who are in the authoritarian camp. Maybe you could talk about that for a bit.

Trish: It is so hard to get people to I mean, if we’re back to uncertainty. Right? It’s so hard to get people to understand that the more expert somebody is, the more likely it is that they’ll talk in terms of tendencies and and consensus, and, and uncertainty, and and degrees. And, because and oh, I’ve just forgotten the guy’s name. Political scientist, Weston, I think, who talked about the fact that people associate expertise with certainty.

We still have this very 19th century model of knowledge. And so the more certain someone is, the more they are an expert. And and it it’s it’s anything or an inverse correlation that experts understand the nuance and understand that, you know so, it’s it’s very interesting that experts tend not to do very well in trials because

Markham: Gotcha.

Trish: Queries don’t like that the person admits they might be wrong. You know? And so so I think that’s that’s one problem is getting people to understand that expertise means a a familiarity with relevant data.

Markham: You, addressed the issue of the mass controversy that came up during the pandemic. And, during the 1st year and a half of the pandemic, we, here at Energy Media departed, from our our journalism. We pivoted a little bit because our model of doing Zoom interviews with with experts, worked really well for for the pandemic. You know, what was the latest scientist? What do epidemiologists say?

What do health researchers say? What do, you know, engineers say about the move you know, masks and their efficacy? And and so we did probably 65, 70 of those kinds of interviews, and and I think they were very well received because bringing expert opinion, in the kind of conversation that you or I are having where the expert can talk about, you know, nuance and uncertainty and where we need more data and research and so on was perceived well by my readers and viewers, not everybody else. And but now what we’re seeing this is very interesting. The one of the epidemiologists were very, very clear COVID is airborne.

Trish: Mhmm.

Markham: And and now, of course, the the World Health Organization has just now in 2024 had to finally admit COVID is is airborne. That’s the primary mechanism of transmission. And so there they were actually very certain. There was not much nuance, and they were absolutely convinced that that was the and it turned out they they were right, and nobody and still to to this date, the getting communicating that certainty and the latest research is almost impossible. Yeah.

Aside from the in group, which you generally see around Twitter, around some of the you know, they gather around some of these really expert people. I how does that play into your use of the example of the mass controversy in your essay?

Trish: So if you have people who think about politics in terms of of my in group is right and everybody else is, you know, satanic, then what becomes transimportant is signalling your loyalty to the to the in group. And so masks took on the unfortunate meaning of of a political affiliation, and it really shouldn’t have.

Markham: Oh, okay.

Trish: And, and so hostility to masks became a sign you know, refusal to wear a mask, became a sign of your commitment to a political affiliation. And then that encourages people to engage in what’s called motivated reasoning, which is then you’re more critical about studies or whatever experts who disagree with you than you are. And lots of people engage in that kind of motivated reasoning. There have been studies that show that scientists do too if they come up with a someone comes up with an argument they don’t like. But, what so so then this is so interesting.

So once people have committed to being hostile to masks, then then they needed to be hostile to vaccines because it wouldn’t make sense to be opposed to masks on the grounds that those experts are bad and then take their advice on this other thing. So you get what some people call a pyramid of harm. That this initial commitment leads you to make bigger and bigger commitments that are increasingly harmful. So a lot of people who initially were just opposed to masks, that led to their being opposed to the vaccine, and that led them to being opposed to all vaccines, who didn’t used to be opposed to vaccines. And it’s it’s really hard to get people to to stop creating that pyramid of harm.

Markham: The snowball is rolling down the hill, and and it just gets bigger and bigger, and we don’t seem to be able to to stop it. And and I run again up against these people all the time. And it’s it is very it is very, very difficult.

Trish: And Well, and some of it is just shame that they don’t want that they feel that they would shame themselves by admitting that they were wrong about something, and so that they will keep doubling down on these errors, rather than it rather than admit one error.

Markham: So that I can see how that plays into an authoritarian libertarianism kind of mindset, and we ceased even still today. I’ll give you an example. I can’t remember if it’s been happened recently or is going to happen in the very near future, but premier Smith convened a panel of absolute wacko doctors, vaccine deniers, conspiracy theorists. I I had one of them put me he put me on, his mailing list, and so I got to see his daily rants, and they were just frightening. I don’t know.

How this guy ever got a medical license? I have no idea. But, anyway, there’s 3 or 4 of them on a panel that are gonna go out and talk to Albertans so that they give they can vent about their anti vaccine and anti, mask, views. This is a government responsible for for public health and for the the administration of the public health system. Like, I I’m sorry.

The health system, which is pub which is a public system in in in Alberta, they’re actually giving they’re platforming the conspiracy theorists, the extremists, the authoritarian libertarianism. Any insights into into that?

Trish: That’s that 19th century notion about about science. I mean, I I there are certain things where I wish that just a giant air horn appeared by people’s head and went off whenever they said science says. And, you know, and that and it’s true of, like, New York Times articles. All sorts of people do that. Science doesn’t say anything.

Markham: I’ve made that I I I’ve said that in the past. I confess. Yes. Stop.

Trish: The the air horn’s gonna appear. But, but yeah. And so the fact is that not all doctors are really scientists. That’s not necessarily their training. And I my dad was a doctor, lots of my best friends are doctors, but you don’t necessarily get trained in epidemiology and, how to you know, what makes a good or bad study.

So I think that’s, that’s part of it. But there’s also a a really frightening, willingness for people to to believe what it’s useful for them to believe. I I think that it was, Upton Sinclair who said that after running for California governor, you know, that it’s really hard to get people to believe something if their paycheck, requires them to not believe it. And that’s what’s to Alberta. Yeah.

Yeah. You know, And and I think also a lot of political figures believe that, that if they sell their souls to get into power, they’ll be able to do good, not doing a really very good assessment of the math of how much harm they’re doing versus what they’ll do.

Markham: How do we so we’ve we’ve provided a number of examples of the rise of authoritarian libertarianism, what it is, why people are drawn to it, how it corrupts our, you know, our, our centrist, pluralism, are not take out centrist, just our corrupts our pluralism, does away with nuance, and it it seems like the model of authoritarian libertarianism that you’re talking about can incorporate any number of different topics. It can be about health, public health policy, pandemic policy. It can be about oil and gas and energy and climate policy. And it seems like there are politicians who arise. Like, I will give Danielle Smith credit for this.

She has been a brilliant communicator on this, and she has been able to put she’s almost Trumpian in her ability to push the right buttons to to she will make the wackiest policy sound completely rational, when she explains it on television. And and I know her. I’ve been I’ve interviewed her. She’s interviewed me. I’ve moderated a panel she sat on, and she doesn’t know this stuff in any great depth.

She just, you know, knows a little bit. She’s picked up some words, and she gets briefed by her deputy ministers, that sort of thing. But it how what is the role of a an an the individual leader? We see it in in in the US with Trump. We saw it with Ron DeSantis in Florida, where and we’re seeing it now with Danielle Smith in in Alberta, where they advance authoritarian libertarianism, and they they have a skill set that others don’t.

Mhmm. And how so the role of the individual in advancing that?

Trish: Well, people do have a tendency, as I said, to confuse certainty, expression of certainty, and confidence with intelligence and expertise. And so one of the things that a lot of really destructive political figures have is shamelessness.

Markham: I’m sorry for laughing, but they you just described Danielle Smith to a team.

Trish: Yeah. Absolutely shameless. And so there’s no, there’s no hedging that they engage in. There’s they don’t admit her, and and I think some people really like that. Eric Fromm had some really interesting explanations as to why people, why Germans really liked authoritarianism.

I’m really drawn to social dominance orientation research that was done more like nineties or or early odds. But it’s saying that some people just feel they like a structure. They just want a clear structure that they’re gonna fit into. And The

Markham: pecking order and they know their place on the pecking order.

Trish: Yeah. Exactly. And that they get to, you know, piss up and kick down. And that’s their ideal thing. The other thing that hasn’t come up that I think matters though is what’s called Vladimir’s choice.

And it comes from an old Russian folktale, which is that there’s this guy Vladimir, and God comes to him and says, I will give you anything you want. The trick is, I’m going to give twice of that to this guy you hate, Ivan. So what do you want me to give you? And Vladimir thinks for a while and then says, gouge out one one of my eyes. And, it’s and political, political scientists talk about that as a decision making thing, that people will choose to hurt themselves as long as it hurts the out group more.

Markham: Okay. So in in the case of the authoritarian libertarianisms, where they identify the out group as Libtards Yes. Just as an example, It doesn’t matter that the ideas and the policies they espouse hurt them, but it’s gonna hurt the Libtards more.

Trish: Yep. Yeah. And so they’re they they feel like that’s a win. And that’s what you get with authoritarian libertarianism, but I think also, in general, anytime that a decision is is framed in terms of us versus them on a zero sum. So I’ve heard people talk about this in business, that that, you know, engineering wants to do down marketing, and will do anything they can to hurt marketing even if it hurts them in in the long run.

Markham: This has been a fascinating conversation, Tricia. I’m I’m really glad that we’re having it, and I think it’s very, very relevant to what’s going on in Canada right now, and, and, of course, goes without saying in in in your country. But the question then arises, and maybe we’ll wrap up the interview with this question, what do we do about this?

Trish: It’s so hard. Right? I mean, if there were a simple solution, Aristotle would’ve figured it out. But, you he watched the Athenian democracy collapse. So I do think that we have to continue to try to talk to people.

I do think that, pointing out that that people are evading argument, that they’re evading the data, that they’re holding others to different standards. This is the thing that it really comes down to because people will often be able to cite a study. And they’ll say, I’m right because here’s a study. And if but if you say, okay, and if I show you a study, does that make you wrong? They’ll say no.

So it’s this is hokey, but I keep ending up on do unto others as you have them do unto you. Old people to the same standards.

Markham: What I’ve been arguing, and I should point out here for, listeners may not be aware of this, but about 6 months ago, we started a a launched a citizen led initiative called the energy, circle. And the idea is to bring together, you know, folks who are just interested in energy issues and policies and to talk about it, to do webinars, to do, you know, live energy interviews like this, to to do events. We put on a number of public events. And the reason there’s a amongst, you know, we’re attracting people who are, you know, like engineers and geoscientists and, you know, some fairly highly, accomplished energy professionals. And one of their their complaint their persistent complaints is I talk about this stuff inside our company, Markham, and the old guard and barely his old white guys.

They just dismiss it, and they don’t wanna hear about it, and they and they, you know and they’re frustrated. They’re so frustrated that they can’t even have a conversation inside their work place or inside their peer group or inside their professional association because the dominant group shuts it down. And my response to that is, I know it’s hard. I know it’s really we’re we’re swimming against the stream here. But we if you have to do it over and over and over and over again to make progress, and, eventually, people begin to say, hey.

You know, maybe this guy’s maybe there’s some merit to these ideas, and and we should rethink, you know, the, what we have thought for a long time. And so is that is that an argument? And would you agree that the important thing is to engage as much as possible? Yeah. We have the conversation.

Trish: Absolutely. You know, and and sometimes it can be useful to ask when has this worked? When has it worked to shut down this agreement? When has it worked to, and played out well in in businesses? I mean, this is something that businesses have figured out.

When you get groupthink in a business, they make bad decisions, and and nobody stops them. And and when you look at these kind of, you know, autopsies of various companies that were very successful until the last minute, Every time, it’s that, people refuse to rethink things, they refuse to have the hard conversations, they refuse to think about the long term plan. And so I think that’s there’s a way in which businesses should be the most open to this kind of discussion. And, you know, you’re right. Other industries have failed, and they they’ve failed because they refused to acknowledge change has come.

Markham: I’m I’m reading a fascinating book, about, the in in, the incumbent’s dilemma. And it’s making the point as an American author, and it makes the point that many, many, many, you know, titans of American industry over the years have failed. And they didn’t fail because they were poorly run. In fact, they were they were looked upon as a as an example of of, superlative management. And they they failed, because somebody came along with a better idea, disrupted them very quickly, and you can see that the what you just said, people were not talking about it.

They wouldn’t acknowledge it. They tended to, you know, do what Blockbuster did. Well, no. That that that streaming video thing from Netflix, that that’s like next thing you know, you’re out of business.

Trish: Yeah.

Markham: And and I I can see where you would argue, and I I I agree with you that the the having the hard conversation, and carving out space for those conversations in an environment like Alberta, is incredibly difficult. And it takes some it’s gonna take some sacrifice. But if everybody says it’s too hard, we’re not gonna do it, then the authoritarian libertarians win. Yep. Would you agree?

Trish: Yep. Absolutely.

Markham: Okay. So the the the takeaway from this interview is that this is a disturbing trend, and the only antidote to it is is, is discussion.

Trish: And And problem solving. Discussion not in terms of who’s who’s better or who’s worse or which group is right or which group is wrong, but of how can we work together to solve to identify and then solve the problems.

Markham: I wonder if that’s a very difficult conversation to have, and I wonder if there are conversations that need to proceed, getting people organized and and all, you know, forming another in group that whatever. But the engaging with the the the authoritarian libertarians is a very difficult exercise. Very difficult. I’ve and I know from experience because I’ve done it many times on social media and outside of social media. So maybe we’ll just leave it at this, is that we need to have the conversations at a much broader level than we’re doing now.

How we get there is another risk for another interview, another another, episode of Energy Talks. But, look, this has been fascinating. I I really have learned a lot, and I I’m gonna be printing out the transcript of of this interview and and studying it because there is a a a great deal that that we as Canadians and particularly in Alberta need to accept these ideas, and incorporate them into how we conduct ourselves, because the consequences could be quite serious. So thank you very much for this.

Trish: Thank you. It’s been really good.

The post Danielle Smith’s authoritarian libertarianism explained – interview transcript appeared first on Thoughtful Journalism About Energy's Future.

Bill Hatton was a Vietnam vet, 300 pounds of menace, and an imposing figure around the board table. His only job, he once explained to me, was to sit across from CEOs and explain what access to First Nation traditional lands was going to cost them. The same principle is now at play in the dispute between the Woodland Cree First Nation (WCFN) and Obsidian Energy, which is getting uglier by the day.

Hatton returned home to Minnesota after his discharge and fell into community development. He was influenced by the work of notorious activist Saul Alinksy, who died in 1972. At some point he drifted into community economic development. In those days, that was defined as helping local and minority communities create businesses that boosted local employment while offering goods and services not otherwise available in the neighbourhood.

Like Alinsky, Hatton was a character. He talked in a grand eloquent style, frequently quoting – perhaps accurately, but probably not, who could tell? – military strategists like Von Clausewitz and Sun Tzu. During the 1980s he worked in northern Saskatchewan with the La Ronge Band, which pioneered joint ventures between Canadian companies (eg trucking) and Indigenous communities. 

When I met him in the early 1990s, he was essentially a thug for hire. At least that was the way corporate types viewed him. They much preferred negotiating with the less experienced First Nations than the steely-eyed ex-Marine. Hatton knew how to say “no” and back it up. It’s a simple skill, much harder to do than describe, and his services were much in demand from First Nations back in the day.

But Hatton never forgot a lesson he learned during his days with the La Ronge Band: transfer skills to Indigenous leaders. A related lesson he never tired of talking about is the importance of building institutional and management capacity to support those leaders.

Watching interviews with WCFN Chief Isaac Laboucan-Avirom reminds me of Hatton, who hadn’t worked in Canada for years and passed away some time ago. Articulate, resolute, and happy to call out Obsidian CEO Stephan Loukas for showing no respect to First Nation leaders. He has the backing of his council and his community. And, after yesterday, support on the ground at the WCFN camp near Peace River from other Chiefs.

Those Indigenous leaders are tough negotiators. They know exactly what they want: “It’s pretty simple from our end,” says Driftpile Cree Nation Chief Dwayne Laboucan. “If you’re going to come and make a livelihood from our lands, we must too. That’s our message to oil and gas: you’re not going to come in here and start bullying us. We’re here to stay and we’re ready to fight.”

To be fair to the oil and gas industry, it has spent considerable effort building relationships with Alberta First Nations, including many Indigenous contractors, many of them nation-owned development corporations. Producers’ operations are often located on First Nations land, so looking to the local community for workers and services makes plenty of sense. 

But the economic benefits from oil and gas extraction haven’t helped many First Nations, including the WCFN, according to Chief Laboucan-Avirom.

“My people shouldn’t be living in poverty,” he said. “We want to be part of the workforce. We want to develop mega projects. We want to be owners of the resources. And you’re darn rights it is about money.”

First Nations aren’t the only locals worried about money. The WCFN camp is littered with oilfield equipment like bulldozers brought by local contractors. They say Obsidian is using a contractor from Rocky Mountain House, hundreds of kilometres away, while local service companies remain idle. 

The combination of a determined Chief Laboucan-Avirom, support from many other Indigenous communities, and the visible support from local companies is a potent opposition to the legal tactics of Loukas and Obsidian. Consultants like Bill Hatton are no longer needed. Indigenous leadership is perfectly capable of standing up to not only Obsidian, but also the Alberta Energy Regulator and the provincial government, who have been called out by the Chiefs for their roles in creating the current deadlock.

If I was advising Loukas, my advice would be to negotiate an agreement with Chief Laboucan-Avirom as quickly as possible. Pay the asking price and count yourself lucky that it’s not higher.

Even in industry-friendly Alberta the chances of Obsidian winning this dispute are slim to none and slim left town decades ago.

The post First Nation leaders know the value of access to traditional territories appeared first on Thoughtful Journalism About Energy's Future.

On Tuesday, President Joe Biden will raise import tariffs on China’s electric vehicles by 400 per cent, according to the Wall Street Journal. My inbox and timelines are now full of Americans pondering what Biden’s move means for the global economy, legacy automakers, climate change, and the fate of human civilization generally. But no Canadians. Why is that? 

The easy answer is that Canada is an insular, provincial country content to be an economic and intellectual hinterland to the United States. Our elites, our leaders, are too busy squabbling about the latest petty internal issue to worry about changes in the broader world in which we live.

Not true, you object, what about the current protests over atrocities in Palestine or the escalating angst over climate change? Aren’t they proof that Canadians are plugged in? Well, exceptions abound to any rule. But when it comes to my beat, the global energy transition, the easy answer still holds true.

Why aren’t Canadians pondering what Biden’s need to protect legacy automakers means for Canada’s industry, the world’s 13th largest auto manufacturing sector? Or what it means for the future of petroleum, the feedstock that powers the internal combustion engine, given that Canada is the world’s fourth largest crude oil producer? 

I return time and again to this frightening quote from Carlos Tavares, CEO of Stellantis NV (parent company of Chrysler and Jeep) and a grizzled veteran of the global auto industry:

“If the automotive industry doesn’t move, this industry will disappear under the offensive of the Chinese industry…The magnitude of the Chinese offensive, the competitiveness that they can demonstrate and the massive arrival of all of their best carmakers is a significant change.”

Disappear under the offensive of the Chinese industry? Can Tavares seriously be arguing that the manufacturing sector at the heart of Western industrialization for the past century is about to be engulfed by the industrial tsunami that is “made in China”?

I read Tavares’ quote to Flavio Volpe, president of the Automotive Parts Manufacturers Association, on a recent Energi Talks podcast and asked him to respond. His reply is chilling: “Well, that’s the end of the interview because what else can I add to that? He’s hit the nail on the head.”

Why isn’t the China threat front page news? Why aren’t policymakers debating the issue in legislatures across the country? More importantly, for our purposes today, why aren’t Canadian journalists and news organizations shouting this from the rooftops?

Rex Murphy, that’s why.

The most polarizing writer in modern Canada died on Thursday at the age of 77. Some remembered him fondly as a leading liberal intellectual of the sixties and seventies, a worthy successor to CBC radio icon Peter Gzowski on the Cross Country Check Up show. But most focused on his years as a shill for the Alberta oil and gas industry and his headlong plunge into the murky world of alt-right conspiracy theories that included his hatred of all things Trudeau.

Murphy in his later years was unreadable, especially on energy topics. 

His Postmedia columns were CAPP (Canadian Association of Petroleum Producers) press releases regurgitated as Trumpian word salads. He had nothing new to say, but if paid by the pound for his polysyllabic verbosity, he died a rich man. He was, however, widely read and roundly praised by the empty-headed “thought leaders” of the Calgary Petroleum Club and other dens of business iniquity across the country. No more damning thing will ever be said of poor Rex.

Allow me to try: if there was one writer, one “intellectual” who most muddied Canadian thinking about the future of energy, it was Rex Murphy.

By the time the Murphy clones in Canada’s news media notice what’s really going on in Washington, or more importantly what’s going on in Beijing, it will be too late. 

Which is only fitting because Murphy missed it entirely.

The post I come not to praise Rex Murphy, for his evil will live long after him appeared first on Thoughtful Journalism About Energy's Future.

A key assumption of the OPEC oil and gas narrative, which is the de facto Alberta narrative, is being blown to smithereens by China. That narrative is supported by economic modelling that in less than a year has already been seriously undermined by the tsunami of clean energy technologies spilling from Chinese factories. 

The OPEC narrative goes something like this. Rich OECD (Organization for Economic Co-operation and Development) countries like the United States and Canada will electrify because their governments can afford to subsidize costly green technologies like electric vehicles and heat pumps. Non-OECD nations, which is most of the world, cannot. Therefore, OECD oil demand will begin falling in the near future, while non-OECD consumption will rise as poorer economies stick with tried and true hydrocarbons. 

As hundreds of millions, maybe billions, are pulled out of energy poverty and aspire to middle class lifestyles, the growth of non-OECD consumption will outstrip the decline in OECD demand. 

OPEC’s World Oil Outlook to 2045 calls for global demand to rise from the current 102 million barrels to 116 million barrels per day. Rather than an existential crisis for oil companies after peak demand in 2030, as the International Energy Agency forecasts, the next three or four decades will be a Golden Age for hydrocarbons.

How does the OPEC assumption about non-OECD oil demand hold up? Not well, thanks to China.

China’s aggressive clean energy industrial policy

The national government decided 25 years ago that it wanted to dominate clean energy, both making and deploying it. Mission accomplished.
Read this column: Canadians oblivious to China’s lead in clean energy arms race

China has provided huge subsidies to the EV industry for years. Not just automakers, but battery companies and their supply chains. The national and local governments have provided all manner of indirect support, like special “new energy vehicle” licence plates while restricting gasoline car registrations. 

Now, China’s EV makers are threatening the very existence of the car brands  we all grew up with. China is just now unleashing a blitzkrieg of cheap ($10,000 to $20,000) EVs that are well-built with technology that far exceeds what the legacy manufacturers can offer. My interview with Flavio Volpe, president of the Automotive Parts Manufacturers Association, is a must listen or read (a transcript is available). 

I bring up Chinese EV manufacturers because there has been a great deal of criticism lately about the industry’s “over-capacity.” Simply, China is building more EVs than it can sell, at least to its current customers.

The Europeans accuse China of dumping (selling below the cost of production) EVs in their markets. US Treasury Secretary Janet Yellin was recently in China chiding officials about unfair competition while American climate envoy John Podesta was announcing a task force that will determine penalties for “high embedded carbon” (read, Chinese) goods.
Read this column: Rust Belt Alberta? Canada ignores changes to US trade strategy

China’s response is interesting. A recent story in the state organ Xinhua News Agency accused the US and EU of being afraid to compete with lower-cost, more efficient Chinese producers. “Chinese products are widely popular around the world, not because of so-called ‘unfair practices,’” Xinhua crowed, “but because Chinese products have extremely high cost performance, stand out in the fierce market competition, and are technologically innovative.”

The state rag isn’t wrong. Insideevs journalist Kevin Williams recently attended the Beijing auto show. He was blown away by the high quality of Chinese EVs. “Western automakers are cooked,” he concluded, echoing the fears of Stellantis CEO Carlos Tavares, who is quoted in my interview with Volpe.

This gets us back to the issue of over-capacity. Why would China heavily subsidize factories that operate at well below full capacity? In the west, those plants would throttle back production, trying to better match supply with demand. 

In China, however, the government promotes cutthroat competition to force companies to be innovative and efficient, slashing prices to survive in the hyper-competitive domestic market, where as many as 100 EV makers vie for consumer dollars. Unsurprisingly, companies that have been able to scale up while driving down costs are looking to export markets for their surplus output.

With the giant US auto market effectively closed because of political tensions and the EU mulling over trade restrictions to protect its own auto industry, China is turning to the very markets OPEC is counting on for future oil demand.

The non-OECD countries. 

OPEC modellers get it wrong – again

OPEC economists assumed that China’s oil demand would grow by four million barrels per day by 2045. Shortly after WOO 2045 was released last fall, state-owned refiner Sinopec released its annual report that called for China’s peak oil demand arriving as early as 2026, no later than 2030. 

They were wrong because they underestimated the impact of China’s switch to electric transportation. Passenger EV sales, for example, have reached 50 per cent of auto sales. Buses are now almost all electric (600,000 of them in China, versus a few thousand in North America). In China (and India), where they are very popular, two and three-wheelers are rapidly switching to electric.
Read this column: 2024 Preview: IEA’s right, OPEC’s wrong, Alberta allied with oil cartel

Then OPEC got it wrong again. 

The second mistake was taking the non-OECD economies for granted, ignoring or downplaying the likelihood that China would pursue those coveted markets.

“In many developing countries, not only do Chinese products benefit consumers, but Chinese companies also contribute to the transformation of local industries,” Xinhua argues, noting the example of Thailand. Chinese EVs have “allowed Thai people to drive electric vehicles at affordable prices…which has promoted the development and transformation of Thailand’s automobile industry, stimulated investment and employment, and promoted Thailand’s economic development.”

If trade disputes block access to big Western markets, then China’s EV makers are happy to pivot to southeast Asia; growing exports to Vietnam, for example. Or Latin America, where BYD is building a factory in Brazil. There are many other examples of China’s EV manufacturers boosting exports or setting up shop in developing countries.

“Western trade protectionism undermines the principle of fair market competition, hinders free market trade,” says Xinhua, seeing no irony in a communist government’s news agency sounding like a Milton Friedman lecture.

Where does that leave Alberta?

BloombergNEF’s modelling predicts that oil demand from road transport, just under half of global oil consumption, plunges after the end of this decade. The IEA’s Announced Policy Scenario, the most likely, in my opinion, shows a rapid decline in global oil demand after 2030.

Alberta oil’s ability to compete in a scenario of falling demand and low oil prices is grist for another column. But Albertans remember well what happened in late 2014 when Saudi Arabia opened the taps to drive American shale producers out of the market. Two-plus years of economic carnage was the result. 

Predicting the future is tricky and one is guaranteed to be wrong. That said, as of this moment in time, the evidence supports the IEA’s 2030 peak oil demand call, largely because of China. 

What is the likelihood that Alberta oil and gas bosses will pay attention? Not great.

Veteran Alberta oil and gas journalist Bill Whitelaw recently said to me, “If peak oil demand happens by 2030, I’ll eat my hat.” 

Will that be plain or with some of that rugged, Alberta free enterprise barbecue sauce, sir?

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