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Real story of this energy crisis is not supply disruption, but demand transformation

Turn on the news, and you hear about war in the Middle East, the Strait of Hormuz, and rising oil and gas prices. Governments talk about supply. Exporters talk about opportunity. But the real story is happening somewhere else in the demand system. And it is moving much faster than most policymakers understand.

The current geopolitical shock—like the Russia–Ukraine war before it—is not strengthening fossil fuels, but accelerating their displacement. Not because of climate policy, but because of basic economics that wouldn’t surprise most consumers.

I recently sat down with energy economist Dr. Chris Bataille to unpack what’s really happening in global energy markets. You can watch the full interview here.

But the system has changed. For decades, fossil fuels had no real competition. When prices rose, consumers absorbed the shock because there were no viable alternatives. Today, electricity—powered by solar, wind, and batteries—competes directly across transport, buildings, and parts of industry.

“One of the things that’s happening is probably the biggest boost to global decarbonization ever, more than any policy that’s ever occurred, that’s trying to make it easier for you to have,” said Bataille.

“The top 20 per cent of the crude oil supply curve is now wildly uncertain. And the top 20 per cent of the LNG supply curve is wildly uncertain. dIn previous crises there just weren’t other options. But the world has really changed in the last five years. Solar and batteries have really come on mainstream.”

That change is now driving behaviour. Countries are not waiting for markets to stabilize. They are redesigning their energy systems.

The system is electrifying faster than expected

The shift is not subtle. It is structural.

Electricity demand is rising rapidly across transport, buildings, and industry as economies electrify. What matters is not just growth, but composition. Electric vehicles, cooling demand, and industrial electrification are becoming the dominant drivers of energy demand growth. That means the system is shifting from fuels to electrons.

Bataille sees this clearly in global markets.

“The new standard is basically solar, and to a certain extent batteries. It’s not coal plants like everyone imagined. The dominant amount of energy that’s being used is from solar,” he said. “That’s really the story globally. And we’re not seeing it because we live in a country with copious amounts of gas.”

The Global South is forcing the transition

The real pressure is coming from emerging economies. After Europe outbid developing countries for LNG following Russia’s invasion of Ukraine, many were forced to rethink their dependence on imported fuels.

That lesson stuck.

“And here we are once again, driving up LNG, driving up oil,” I said during the interview. “The lesson is not lost on the Global South. This is expensive. They have to use US dollars to pay for it. And there are alternatives.”

Bataille agreed—and pushed it further.

“The amount—like as you say—they have to get U.S. dollars to buy it. It becomes a really big macroeconomic problem really quickly. A lot of places are curtailing industrial production because they can’t get LNG or crude oil. They are going to be looking very carefully at alternatives in all sectors. And this is going to take a big structural chunk out of the global fossil fuel market.”

Those alternatives are increasingly clear. Solar is now the dominant source of new power capacity globally. It is cheap, scalable, and deployable without fuel imports. That makes it ideal for countries trying to reduce exposure to volatile global markets.

China is capturing the shift

China has spent two decades preparing for this moment. It built manufacturing capacity across solar, batteries, EVs, and grid infrastructure. Now it is exporting that system into emerging markets.

“And what’s really interesting is everyone keeps looking at what China did five or ten years ago. They’re not looking at what China’s doing right now,” Bataille said. “They’re taking all that industrial policy and turning it on the industrial sector. The next thing that’s going to go is industry and chemical products.”

That expansion is already reshaping global energy flows.

“And that is cascading throughout the world with their overcapacity,” he added. “They’ve moved really quickly to give themselves more options for their electricity system, their chemical products system, and their transport sector.”

The result is a feedback loop:

• Energy shocks raise fossil fuel prices
• Countries seek alternatives
• China supplies those alternatives
• Fossil demand weakens structurally

Oil demand is more fragile than it appears

This has direct implications for oil markets. Roughly half of global oil demand comes from road transport—the sector most exposed to electrification. Electric vehicles are scaling rapidly, particularly in China and increasingly in developing markets.

Bataille does not hedge on the implications: “The crude oil demand for transport is a dead man walking at this point in time. It’s about 50 per cent of global oil demand. That’s the sector that’s going to go.”

Even if that timeline proves aggressive, the direction is clear. And once demand begins to erode, it weakens at the margins first—the highest-cost, least secure supply.

That is exactly the portion of the market now under pressure.

Canada is still telling itself the old story

Canada continues to view the world through a petroleum lens.

“We still see global energy issues through the petroleum lens,” I said during the interview. “From the federal government on down.”

That framing leads to a dangerous assumption: that high prices are a windfall. In reality, they are a catalyst.

“And what they’re not seeing is the shock that that’s still delivering to demand globally,” Bataille said. “This is like a quasi standstill for a lot of places. They’re going to move away from it.”

The risk for Canada is not cyclical. It is structural.

If global demand begins to weaken faster than expected, long-lived infrastructure bets—pipelines, LNG terminals—become harder to justify.

The system is already changing

The global energy system is not waiting. It is being reshaped by price shocks, technological substitution, and industrial strategy. The question is not whether this transition will occur.

It is whether countries like Canada recognize it in time. Because the real story of this energy crisis is not supply disruption. It is demand transformation.

And that story is already underway.

To watch more energy expert interviews on this topic, you can find them on the following playlists on the Energi Media YouTube channel:
Electrotech Revolution Explained
Electric Vehicles
Energy Transition

To learn more about energy transition theory, take our free one-hour training course: The Energy Transition Explained.

The post The Canadian energy conversation is stuck in the wrong century appeared first on Thoughtful Journalism About Energy's Future.

For all the noise surrounding climate policy, this is the rare file where ideology doesn’t change the physics, and the economics are as plain as daylight: methane is the cheapest, fastest, most practical emissions reduction lever available to Canada’s oil and gas sector. And yet, we still move too slowly — not because the solutions are unclear, but because some governments refuse to raise their sights.

Nowhere is this resistance more visible than in Alberta. While the federal government and most major producing jurisdictions around the world have embraced the need for deeper methane cuts, Premier Danielle Smith’s government has consistently resisted calls to strengthen Alberta’s targets. Even as provinces like British Columbia meet their methane goals early — and even as U.S. states such as Colorado and New Mexico push ahead — Alberta continues to argue that higher targets would harm competitiveness. The evidence suggests the opposite.

Pembina Institute’s Meeting the Moment

The report is unambiguous: methane abatement is the low-hanging fruit of climate and energy policy. Solutions are proven. Costs are low. Many fixes pay for themselves. And on the global stage, methane performance is becoming the new measure of energy credibility.

Contrast that with other oil and gas emissions. Deep decarbonization of heavy oil, upgrading, bitumen extraction and processing remains expensive. Carbon capture, utilization and storage is slow to scale and costly to deploy. Electrification in remote regions is challenging. None of these pathways move quickly or cheaply. That is why, as Pembina notes, other oil and gas emissions remain stubbornly high, locked behind technological, economic and regulatory barriers that will take years to resolve. Methane stands alone: fast, cheap, and immediately achievable.

This is not theory. It is field-tested reality. British Columbia proved it. Colorado proved it. New Mexico proved it. Even the European Union — with a massive reliance on imported gas — has set methane standards so ambitious they will force exporting nations to clean up or lose market access.

Canada cannot afford to pretend this shift isn’t happening. And yet, Alberta’s approach does exactly that. The province still does not require the full phase-out of emitting pneumatics, a major methane source, even though zero-bleed alternatives are widely available and already required in peer jurisdictions. Alberta also recently weakened its flaring rules, eliminating a long-standing ceiling after the industry exceeded the limit two years in a row.

This is the opposite of leadership.

Federal amendments offer a blueprint for credible action

Quarterly inspections at high-risk sites, monthly instrumented screenings, annual third-party audits, and strong restrictions on venting and flaring together form one of the most rigorous methane regimes in the world. Canada is not “acting too fast,” as some claim. If anything, it is struggling to keep pace with the jurisdictions shaping the new global rules.

The stakes are not abstract. They are profoundly economic. As the report notes, methane cuts in Canada cost roughly $11 per tonne of CO₂e, far lower than almost every other emissions pathway in the sector. Imagine if any other emissions source offered reductions at that price. It would be the centrepiece of national policy. Instead, methane is treated as just another line item in the climate debate,  when in fact, it is the strategic hinge between maintaining competitiveness and falling behind.

The reason is simple: you cannot sell energy to the world in the 2030s without proving its emissions profile. The EU knows this. The United States (outside of Washington’s current political turbulence) knows this. International buyers know this. Methane intensity is becoming the passport for participation in global markets, and Canada’s current performance — roughly ten times the emerging best-practice benchmark — is not good enough.

In this environment, refusing to strengthen methane targets is not a defence of Alberta’s industry. It is a disservice to it. The companies that invest early in low-methane operations will command premiums and secure market access. The ones that wait will find themselves negotiating from a position of weakness.

This is why the report argues so strongly for finalizing Canada’s methane regulations without further delay and why provinces, including Alberta, must modernize their frameworks to align with the world’s leading jurisdictions. The economic logic is straightforward: strong methane policy is not a cost. It is a competitive advantage.

There is a broader lesson here. Climate policy is often framed as a series of hard trade-offs. And in many areas, that is true. But methane is the exception — a policy space where the climate benefits, economic savings, public health improvements and competitiveness gains all point in the same direction.

The only real question is whether Canada chooses to lead or whether it allows political resistance to delay the inevitable.

Because on methane, the facts are clear. The solutions are ready. The advantages are obvious. And the world is already moving. Canada can either meet the moment or watch the moment pass by.

The post “Cost and Carbon Competitiveness” was an Alberta rallying cry for years. What happened? appeared first on Thoughtful Journalism About Energy's Future.

Today in the Legislature, Danielle Smith launched yet another salvo of victim-language. accusing unspecified “foreign money” of funding recall campaigns targeting United Conservative Party (UCP) MLAs. She told the legislature that, among other things, “a GoFundMe is being used to raise money.” The claim deserves scrutiny for three interlocking reasons.

First: the claim of victimhood is integral to the populist ideology, authoritarian-libertarianism, that she promotes.  Smith’s rhetoric locates the threat to “our freedoms” in some shadowy conspiratorial force. Her political style emphasizes “you vs them,” “us losing to outside forces,” and “elite actors pulling strings.” When she blames foreign money for recall petitions, she is recycling exactly this tired script.

Claims of victimhood are part and parcel of authoritarian-libertarianism. She portrays her opponents (and democratic challenge) as illegitimate, not merely part of the normal political process. In that worldview, recall efforts transform from an accountability mechanism into an external attack.

Second: she has provided not one shred of publicly produced, verifiable evidence for her claim.

We have no published financial trail. We have no named foreign donor. We have no independently verified audit or investigation showing foreign funds flowing into these petitions. But we do have her suggestion — that “there’s a GoFundMe being used” — with no further substantiation.

Raising an allegation without delivering evidence is classic populist behaviour. It allows the speaker to court outrage, distraction and grievance, rather than engage in the messy business of transparency and truth. Smith has absolutely no shame in asserting what amounts to an unsubstantiated conspiracy claim, thereby shifting attention from the substantive issues of recall law, democratic accountability and the concerns raised by voters.

Third: the UCP — her party — have used precisely this playbook before. Back in 2019, then-premier Jason Kenney’s government commissioned the Public Inquiry into Anti‑Alberta Energy Campaigns, explicitly to examine “foreign-funded activism” against Alberta’s oil and gas industry. The inquiry itself was triggered by the “research” of Vivian Krause — whose claims of foreign money influencing Canadian environmental non-profits have since been debunked.

The money-under-the-bed narrative worked then for the UCP: framing challengers not as citizens but as foreign agents. And because the earlier version failed to produce meaningful findings (the inquiry’s conclusion was that the groups in question had done nothing illegal) the lack of rigour here is predictable. Smith is essentially deploying her party’s old toolkit.

Putting these three objections together — ideological lens of victimhood, absence of evidence, prior institutional behaviour — one arrives at a clear conclusion: this is not serious governance. This is theatre. It is distraction. It is a defensive reflex. It is the posture of a party and leader who feel the ground shifting beneath them.

When a premier claims foreign actors are funding democratic petitions against her, she is not engaging in good-faith democratic dialogue. She is signalling a retreat into grievance and blaming.  That is not the language of pluralism or of democratic humility. It is the language of incompetence.

The UCP’s playbook is long-established: create the outsider threat, mobilise the base, shift blame away from her government’s many recent failures. Here are just two of them.

Invoking the Notwithstanding Clause to End the Teachers’ Strike

Smith became the first premier in Alberta history to use the notwithstanding clause to suspend Charter of Rights and Freedoms protections. She didn’t have to. As Energi Media expert interviews clearly showed, there were other regulatory tools at her disposal.

Instead, she chose political convenience.

The Auditor General’s Scathing Report on Healthcare Failures

Alberta’s Auditor General delivered a devastating assessment of healthcare governance under Smith’s restructuring agenda. The report cited poor oversight, lack of accountability,  fragmented decision-making, failure to provide clear performance measures, and significant risk to patient care because of chaotic reorganization.

It confirmed what health-care workers have been saying for months: Smith’s “reform” has produced confusion, instability, and declining system performance.

Smith’s invocation of foreign funds is simply the latest chapter in a long story of the most inept government in Canada.

What’s at stake is not just this recall fight. What’s at stake is public trust in democratic institutions. The recall process is meant to be a tool of citizen accountability. It is meant to allow constituents to hold elected representatives to account. Smith is effectively defaming the very notion that voters might legitimately disagree with her government, might legitimately exercise a democratic tool, might legitimately say: you are not representing us.

She is framing dissent not as local political agency, but as external sabotage. Again, this is standard authoritarian behaviour.

There is also a sharp irony in Smith’s outrage: she is furious about a recall mechanism that her own party put into law. The UCP framed recall legislation as a populist accountability tool when it served their interests — a way to posture as champions of “the people” against unresponsive politicians. But now that citizens are using that very law against her own MLAs, Smith treats it as an abuse, even a foreign-funded plot.

It’s the classic boomerang of bad-faith populism: a tool designed for political theatre suddenly functions as real democratic accountability, and the government that created it recoils in indignation. This is not sabotage. It’s consequences.

The post Where’s the Beef, Danielle? appeared first on Thoughtful Journalism About Energy's Future.

For years, Canada has promised to build a full critical minerals and battery supply chain. We’ve published strategies, signed MOUs, pitched foreign investors, and talked endlessly about “value-added opportunities.” But these were mostly aspirations, not assets. Now, in St. Thomas, Ontario, the strategy is turning into steel and concrete.

Volkswagen’s PowerCo is erecting one of the largest battery-cell factories in the world, up to 90 gigawatt hours (GWh) at full build-out, on a 350-acre site where main-building construction is now underway. The project is no longer a political announcement. It is the physical anchor of a Canadian supply chain that finally runs from mineral extraction to finished battery packs. And its arrival signals something important: Canada is no longer trying to join the global battery race. It is in the race.

Where St. Thomas fits in the supply chain

A modern lithium-ion battery supply chain has four major steps:

1. Mining – extracting critical minerals (lithium, nickel, graphite, manganese, cobalt).
2. Refining & processing – turning raw ore into battery-grade materials (sulfates, precursors, cathodes, anodes).
3. Cell manufacturing – assembling electrode materials into the electrochemical “cells” that store energy.
4. Pack manufacturing – integrating cells into packs with cooling, electronics, and enclosures for EVs.

Volkswagen’s St. Thomas plant is step #3: battery-cell manufacturing. This is the heart of the value chain and the highest-value manufacturing stage after cathode-active materials.

But what makes this project strategically significant is how it connects backward to Canada’s upstream minerals and forward to pack integration in Ontario’s automotive plants (backward and forward linkages explained). The plant creates a gravitational centre that pulls the rest of the supply chain into alignment:

• Mining and refining in Ontario, Quebec, and Atlantic Canada now have a guaranteed world-class customer.
• Cathode and precursor manufacturers—like Umicore in eastern Ontario—fit directly into VW’s procurement needs.
• Automakers assembling EVs in Ontario (Stellantis, GM, Ford, Honda) will have access to locally manufactured cells.

For the first time, Canada is on the cusp of closing the loop. Mining investment only makes sense if processing exists. Processing only makes sense if cell producers are located nearby. Cell producers only invest where EV platforms are already being built. St. Thomas is the keystone that allows the whole arch to stand.

Why this story matters so much for Canada

This project is not just another automotive investment. It represents a structural shift in Canada’s economic future.

1. We are finally capturing midstream value, not exporting it.

Historically, Canada exported raw materials while other countries captured the high-value manufacturing. Lithium from Quebec and graphite from Ontario would have ended up processed in Asia, turned into cells in Asia, and shipped back to North American automakers.

St. Thomas flips that equation: value now stays in Canada.

2. It creates the conditions for a domestic critical-minerals flywheel.

Mines need demand certainty. St. Thomas provides it.
Refiners need stable offtake. St. Thomas provides it.
EV manufacturers need proximity to cell production to meet trade requirements. St. Thomas provides it.
This is how integrated industrial ecosystems form.

3. It positions Canada as a serious global player in the energy transition.

Volkswagen chose three global hubs for its unified-cell strategy: Salzgitter (Germany), Sagunt (Spain), and St. Thomas (Canada). That is extraordinary company and a sign that Canada is no longer a peripheral actor.

4. It strengthens North American supply-chain resilience.

With the United States desperate to reduce dependence on Chinese cells, Canada becomes central to the continental EV strategy. St. Thomas is much more than a factory; it is an insurance policy for North American automakers.

5. It sticks even through global headwinds.

The EV slowdown of 2024–25 forced VW to delay or scale European plans. But not this one. The St. Thomas timeline still targets 2027. That tells you where VW believes long-term North American EV demand is heading.

Only now do we get to the nuts and bolts

PowerCo confirmed in late October and early November that major building construction is underway, with concrete pouring and steel erection on the 350-acre site . Magil Construction Canada Inc. is executing the foundation package—more than 30,000 cubic metres of concrete. Steelcon Group is erecting nearly 5,000 tonnes of structural steel.

Ontario government releases reinforce the original job estimates: roughly 3,000 direct workers in the plant, plus thousands more across the local supply chain.

The timeline remains unchanged: start of production in 2027, with capacity rising toward 90 GWh per year, enough for more than a million EVs depending on pack size. This plant will use Volkswagen’s unified prismatic cell format, the global architecture meant to drive scale across all PowerCo factories.

Construction is advancing through the classic gigafactory phases:

• site preparation and utilities (2023–2025),
• foundations and steel (2025–2026),
• equipment installation and dry-room integration (2026–2027),
• commissioning and ramp-up into 2028.

In other words: the milestone that matters, the one that transforms political rhetoric into industry reality, is already behind us. The factory is rising.

The bottom line

Volkswagen’s St. Thomas project is not a symbol. It is a signal. A signal that Canada’s critical minerals strategy has crossed the line from policy into practice. A signal that the country finally has a nucleus around which a full battery supply chain can grow. And a signal that the energy transition’s most valuable manufacturing step—battery-cell production—is no longer something Canada watches from the sidelines.

This time, Canada is in the game.

The post Canada’s First Giga-scale Battery Plant is Under Construction. Why That’s Important appeared first on Thoughtful Journalism About Energy's Future.

Canada is sitting on a world-class opportunity to build a world-scale advanced geothermal industry, yet the federal government’s climate competitiveness strategy barely acknowledges it. That silence isn’t just puzzling, it’s risky. Because if we’re serious about electrification, industrial heat decarbonization, energy security, and creating new clean energy industrial opportunities, then advanced geothermal isn’t optional. It’s indispensable.

And the irony is this: Canada already has everything it needs to lead. We just haven’t decided to act like it.

The interviews (here, here, here) underlying this column offer a clear picture. Start with the basics: the new generation of enhanced geothermal systems (EGS) is nothing like the “Iceland model” of tapping naturally occurring hot-water reservoirs. As geoscientist Gord Brasnett, the co-author of the Cascade Institute report The Deep Heat Advantage: A techno-economic analysis of Enhanced Geothermal Systems in western and northwestern Canada, explained, Canada’s geology isn’t blessed with those “geologic unicorn” hotspots where heat and water sit conveniently near the surface.

Instead, our opportunity lies deeper — literally. EGS drills several kilometres down, engineers a fracture network between two wells, and circulates water through hot rock to recover that heat. It’s modern, modular, and powered by technologies developed in Canada’s own oil and gas sector. In other words, we are already experts at the hardest part of geothermal: drilling deep, hot, technically complex wells.

Canada’s engineering capability is so strong that Canadians are already doing this work internationally. “We have folks doing insulated drill pipe in deep volcanoes in Oregon,” Brasnett explained, “and Canadians deploying drilling expertise in Germany.” Our people are helping build the geothermal future — just not here.

Why not? Partly because we lack the policy framework to bring them home. The European Union gave Ever Technologies a €90-million grant to build its first closed-loop commercial project south of Munich, supported by Germany’s €251/MWh feed-in tariff. That’s industrial policy. That’s how new clean-energy sectors are built.

By contrast, Canada’s 2025 federal budget — marketed as a “climate competitiveness strategy” — barely mentioned geothermal at all. As Brasnett said, geothermal remains “overlooked,” both because it is literally underground and because Canada has not yet deployed commercial-scale projects that would put it on Ottawa’s radar. But that invisibility has consequences. Without a strategic signal from government, capital, talent, and supply chains drift elsewhere.

Canada is uniquely suited to scale this industry

Alberta, in particular, has the deepest bench of drilling, reservoir engineering, geoscience, and oilfield manufacturing expertise in the country. “Eighty-five percent of the skills from the oil and gas sector transfer to geothermal,” Basnett noted, citing International Energy Agency estimates. Alberta has more engineers per capita than anywhere else in Canada, and its industrial parks — Calgary’s Foothills, Edmonton’s sprawling fabrication corridors — already manufacture rigs, drilling assemblies, subsurface tools, and sensors perfectly suited to geothermal applications.

This is not a workforce that needs reinvention. It needs redeployment.

The technology fit is equally strong. Much of the innovation that advanced geothermal now relies on — insulated drill pipe, high-temperature electronics, durable casing, cementing techniques — was pioneered in the oil sands decades ago and proven at commercial scale. Canada is already exporting these tools and techniques to the United States, Germany, and elsewhere. “These are made-in-Canada solutions… deployed worldwide,” Gord said. “It’s a great story we don’t tell loudly enough”.

And the economics are compelling. With deeper plays targeting hotter rock, the efficiency gains more than offset the higher drilling costs. Gord’s modelling shows advanced geothermal achieving levelized costs below $50 per megawatt-hour. That’s competitive with gas and with solar-plus-storage. For clean, firm, dispatchable power, that price is extraordinary.

Even more compelling is the global opportunity. Dozens of countries share Canada’s geology: deep, hot, dry rock, but no natural hydrothermal reservoirs.

“There are far more places that look geologically like Canada than like Iceland,” Brasnett emphasized. If we can prove out deep EGS here, it becomes a “turnkey capability” exportable to Australia, central Europe, Africa, and beyond. In a world desperate for clean baseload power, especially with electrification and data centre demand spiking, that capability is priceless.

So why isn’t geothermal a pillar of Canada’s climate competitiveness strategy?

Partly, as Brasnett carefully noted, because Canada has a habit of “spreading too little butter over too much toast,” avoiding bold bets in favour of lukewarm, incremental efforts. Meanwhile, China is filing “unbelievable numbers of patents” in subsurface technology while the United States has spent a decade running the Utah FORGE living lab to de-risk deep geothermal through coordinated research, drilling, and reservoir engineering.

Canada has done none of that.

Yet nothing prevents us from starting now. The regulatory barriers have largely been resolved; Alberta and BC now have geothermal resource development acts in place, eliminating past ambiguity about rights and permitting. The supply chain exists. The workforce exists. The technology exists. The economics are lining up.

What’s missing is the strategic decision to treat advanced geothermal the way Europe treated wind or China treated solar and batteries — as a national growth pole with backward linkages, forward linkages, and technology linkages that drive prosperity across entire supply chains.

Canada has a once-in-a-generation chance to lead in a sector perfectly aligned with its strengths. If we continue to ignore it, others will not.

We don’t need to invent this industry. We just need to build it here.

The post Canada’s Geothermal Opportunity Is Bigger Than We Think — So Why Is Ottawa Ignoring It? appeared first on Thoughtful Journalism About Energy's Future.

The International Energy Agency has always built its authority on policy. Its World Energy Outlook models are maps of intent: what governments say they will do, not necessarily what markets or industries are already doing. That worked when energy transitions moved at a bureaucrat’s pace. But today, the engine of change is industrial, not political. China — through sheer manufacturing scale and global electrification reach — is driving a transformation that the IEA’s scenarios struggle to capture.

The agency dropped APS from the World Energy Outlook 2025, saying that national commitments are too uneven to model reliably. Instead, it focused on the Current Policies and Stated Policies Scenarios. In effect, the IEA narrowed its gaze to a future far more friendly to oil and gas. A world that changes, but only as fast as formal policy permits. Yet the real world is moving faster, driven not by pledges but by production lines and industrial policy.

China: The Electrifier-in-Chief

Over the past decade, China has fused state planning, industrial finance, and scale to build the world’s most powerful clean-energy ecosystem. In 2024 alone, it sold 12.8 million New Energy Vehicles and exported 1.3 million more. It now accounts for roughly 60 percent of all new renewable capacity installed globally each year. Its solar panel manufacturing capacity will soon exceed the United States’ total electricity demand.

This is not just an energy story; it is an industrial one. Chinese automakers — BYD, SAIC, Geely, Changan — are flooding the Global South with affordable sub-$20,000 EVs, the ubiquitous two- and three-wheelers, bundled with charging networks, battery-recycling plants, and joint-venture factories. Beijing’s “industrial diplomacy” is electrifying emerging markets in the way Western aid once sought to wire them for fossil fuels.

The IEA sees policy diffusion as the main driver of energy transitions. China shows us something else: industrial diffusion. What the IEA calls “infrastructure limitation” in Africa, Southeast Asia, and Latin America is being dismantled by Chinese capital, logistics, and engineering. Electrification is becoming an export commodity.

The Physics of Scale

The story that the IEA’s model misses is not ideological; it’s arithmetic. Every doubling of cumulative solar production cuts costs by about twenty percent; every doubling of battery output by roughly eighteen percent. Those learning curves compound faster than politics can keep up. In 2010, a battery pack cost over $1,000 USD per kilowatt-hour; by 2023, $130. By 2030, it may hit $60. Solar module prices have fallen by over ninety percent since 2010.

Once parity arrives, substitution accelerates. Each ten million EVs on the road displaces around half a million barrels of oil demand daily. At projected adoption rates, that’s the equivalent of erasing an entire Saudi Arabia of oil demand within a decade.

This is the industrial feedback loop that OPEC, ExxonMobil, and the U.S. Energy Information Administration have consistently failed to model. Their scenarios assume hydrocarbons’ dominance and treat innovation as exogenous, a polite way of saying “someone else’s problem.” The IEA broke from that orthodoxy with the APS, which embedded learning curves and cost feedback. Yet by retreating from APS in 2025, the agency risks losing sight of the very dynamics that once made it the gold standard.

The Global South’s Leapfrog

Look beyond Beijing. Across the Global South, Chinese-financed solar farms, grid-stabilization projects, and electric-mobility programs are rewriting development logic. In Kenya, rooftop solar is offsetting diesel generation. In Brazil and Indonesia, low-cost Chinese EVs are scaling faster than policy incentives can track. In the Middle East, Chinese firms are co-building battery-storage complexes once thought decades away.

This diffusion matters because it shifts the geometry of the transition. For decades, energy modernization flowed North to South. Today, it runs in reverse. China’s overcapacity — derided in Western policy circles — is accelerating global deployment by forcing prices down. The IEA’s models, calibrated to declared policies rather than industrial momentum, under-represent this structural feedback.

Capital Flows Tell the Truth

Follow the money. Global clean-energy investment surpassed $2 trillion USD in 2024 and continues rising about 6–7 percent annually. Fossil-fuel investment, meanwhile, has plateaued or declined. Capital allocation now looks more like APS than like the new CPS (Current Policies Scenario), or even the still conservative Stated Policies Scenarios (STEPS). Markets are already betting that electrification, not hydrocarbons, defines the mid-century energy mix.

If the IEA’s CPS and STEPS project fossil demand growth into the 2040s, they describe a world that capital markets have already abandoned. APS aligns more closely with where investors are placing real money — grids, storage, batteries, renewables, and electrified transport.

The Model and the Machine

What’s unfolding is a divergence between two kinds of forecasting: the model built on policy, and the machine built on production. The model counts regulations; the machine multiplies learning. The IEA’s WEO 2025 treats electrification as an outcome of government intent. But China’s industrial ecosystem shows it is increasingly a self-propelling system — feedback, not fiat.

This is not to diminish policy. Without it, China’s ecosystem would not exist. But policy there functions as scaffolding for industry, not a ceiling. The IEA’s omission of APS makes sense within its institutional DNA; it reflects what can be officially promised. Yet it leaves unmodelled the real-world force now shaping the transition: manufacturing momentum.

The Consequences for Analysts and Policymakers

For analysts, the lesson is simple: the energy transition is being built, not legislated. The baseline for understanding it is no longer the pace of policy but the speed of industrial learning. For policymakers, particularly in countries like Canada still investing billions in hydrocarbon expansion, the implication is brutal. The world is electrifying faster than you can permit a pipeline.

The APS still fits the facts because it embeds the physics of feedback. The IEA may have stopped publishing it, but China is still proving it — one gigafactory, one grid, one EV fleet at a time.

The post WEO 2025: China’s Electrification Outruns the IEA’s Imagination appeared first on Thoughtful Journalism About Energy's Future.

Alberta already has a Plan A. It’s called the Emissions Reduction and Energy Development Plan. To understand how risky it is, you need to understand OPEC’s “Oil and Gas Forever” worldview, which is the basis for how the Alberta government thinks about the energy future.

OPEC’s recently released World Oil Outlook 2050 forecasts mid-century oil demand at 120 million barrels per day, up from 103 million barrels currently. You read that correctly. Just as the global energy transition grabs another gear, perhaps two, the cartel is doubling down on the status quo. 

OPEC forecast comes with OPEC narrative

“OPEC does not believe that energy sources are locked in a zero-sum game,” Secretary General Haitham Al Ghais wrote in July, “nor can the history of energy be reduced to a succession of energy replacement events.”

In other words, the energy future will look much like the past. 

After 1945, the rapidly industrializing world couldn’t get enough energy and primary energy demand skyrocketed, led by fossil fuels. Hydro and nuclear also grew rapidly, but were added to fossil fuels. Diversification, not displacement.

OPEC thinks history will repeat itself. This time, the rapid growth of energy consumption will be led by emerging middle income economies in the Global South. An expanding middle class in India and Brazil and Indonesia want the same lifestyle as the North. The new voracious appetite for consumer goods will ensure that wind and solar are absorbed into the energy mix and do not displace hydrocarbons in the 21st century.

Premier Danielle Smith and the oil and gas industry share OPEC’s view. 

That’s all Smith talked about during the World Petroleum Congress in Calgary a year ago. She pilloried the International Energy Agency for predicting peak oil demand by 2030, calling it a “political activist organization.” Recently, she has mused about doubling Alberta’s oil output to eight million barrels per day. Every second day it seems she is in the media excoriating Prime Minister Justin Trudeau for supposedly holding up West Coast LNG expansion.

For Smith and OPEC, oil and gas are entering a golden age of expansion, not staring down the barrel of demand destruction.

During her World Petroleum Congress press conference, I asked her if Alberta had a Plan B, just in case the IEA turned out to be right. Smith’s long-winded politician’s non-answer made it clear there is no Plan B. 

Alberta all in on “Oil and Gas Forever”

Smith’s gamble is unacceptable. At least, it should be. Peak oil and gas demand by 2030, followed by decline, low prices, and oil company failure, is a huge gamble for Albertans. If she’s wrong, a lot of workers won’t be able to pay their mortgages in the not too distant future.

An Alberta Plan B isn’t a nice-to-have, it’s a need-to-have. The existential threat to the Alberta oil and gas industry, one of the largest in the world, is too great to be fantasized away. 

Or, as is more likely, simply misunderstood.

This energy transition is different. It is technology-led, not commodity-led. Solar, wind, and batteries on the supply side, electric vehicles, batteries, heat pumps, and electric industrial processes on the demand side. And all of that technology is manufactured in a factory, most of them in China.

Manufacturing technology that creates energy is fundamentally different from extracting oil and gas. More like electronics manufacturing. For example, the calculator that cost my parents $75 for my Grade 8 math class is now an app on my phone and costs me nothing. In a pinch I can ask Google to do the calculation. 

A similar process is at work for clean energy. Wind and solar often bid into wholesale electricity markets at zero cost. China automakers churn out EVs as low as $5,000. Battery prices have fallen off a cliff, enabling even more renewable power generation and lowering the cost of EVs. Perhaps most importantly, clean energy costs are forecast to continue falling for years. 

Which is why Haitham Al Ghais is wrong. Make no mistake, electricity is an existential threat to oil. Oil’s customers, the automotive industry, have chosen its competitor, electricity, to fuel their vehicles. 

In fact, electric transportation is the “disruptive innovation” for the oil and gas business model. And that’s bad news for Alberta.

“…the list of leading companies that failed when confronted with disruptive changes in technology and market structure is a long one,” wrote Harvard Business School professor Clayton H. Christensen wrote in his 1997 classic, The Innovator’s Dilemma.

Hard to imagine Suncor or Imperial Oil declaring bankruptcy, but once a business model has been disrupted, failure often follows in short order (e.g. BlockBuster). Failure on that scale would be catastrophic for Alberta.

Hence the need for a Plan B.

During her press conference, Smith said that if demand for Alberta oil and gas dries up, “we’ll make stuff out of it.” I’m paraphrasing, but it was a throwaway comment. Not meant to be taken seriously. Nor should we take it seriously. It takes 10 to 20 years to build new industries, scale up new companies. The time to begin is now, not when the golden goose begins its death rattle.

Alberta desperately needs a new energy plan. But who will step forward to draft it? That’s the awkward question for which there appears to be no answer.

The post Alberta needs a Plan B appeared first on Thoughtful Journalism About Energy's Future.

Last week, Canada kicked off 30 days of consultation about restricting imports of EVs from China. This follows the recent imposition of 100 per cent US tariffs. Should Canada follow the American lead? If it does, then the Justin Trudeau Liberals should ditch their strategy of selling clean energy with climate policies and replace it with aggressive industrial policy – just like China and the United States.

To climate purists, this would be anathema. For activists like Seth Klein, author of A Good War: Mobilizing Canada For The Climate Emergency, the warming of our planet is an existential crisis that supersedes all others. Klein argues for governments to take over or direct industry to fight the war on global warming. He wants a much more aggressive climate response and messaging.

So, too, did the Americans at one time. Economic blogger Noah Smith attended a 2017 Bloomberg conference at which all anyone could talk about was the need to ramp up industrial policy to combat the climate crisis. “But China was never mentioned — the big justification that everyone cited was climate change,” he writes.

There was just one teeny problem: Americans consistently tell pollsters they are very concerned about climate change, but few will pay even a small amount to reduce emissions. 

China, on the other hand, skipped right over concern about a warming planet: “It is clear that for China, economic growth — and its own military power — take absolute precedence over addressing global warming,” says Smith.

A few years later, the pandemic changed US political calculations.

“COVID opened our eyes to the long-term risk for both the private sector and the American people of this over-dependence on China and the need to rebuild domestic manufacturing and innovation,” Commerce Secretary Gina Raimondo said in a 2022 speech. 

Consequently, the Biden Administration deployed a more effective motivation: national security. 

Noting that the US only accounted for 10 per cent of global manufacturing output, National Security Advisor Jake Wadland says that this “creates a critical economic risk and a national security vulnerability.” He called for a doubling down on “investments in infrastructure, innovation, and clean energy. Our national security and our economic vitality depend on it.”

“It’s all about national defense,” argues Smith. “Tariffs and industrial policy are intended to prevent America from deindustrializing in the face of Chinese competition.”

In the strategically important auto sector, American companies are already starting down the barrel of “deindustrializing.”

“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,” Carlos Tavares, CEO of Stellantis NV (parent company of Chrysler and Jeep), said in a recent interview. “If the automotive industry doesn’t move, this industry will disappear under the offensive of the Chinese industry.”

The idea that household names like GM and Ford might fail is hard to comprehend for an American or Canadian. Their television ads, logos, and slogans are ubiquitous in popular culture.

Perhaps not for much longer.

China, the world’s first electro-state

The auto sector is one of the “New Three” – the others are solar and batteries – that China is prioritizing. The goal is to dominate global markets in these products and their supply chains. After 20 years of aggressive industrial policy, including hundreds of billions in subsidies, China is almost there. Over 80 per cent of solar panels are made in China, as well as a similar percentage of lithium-ion batteries. 

Only automobile production remains to be conquered.

Last year, the world made 94 million light duty vehicles, according to Statista, with 30 million of those made in China. That’s three times what the US manufactured and 20 times Canadian output. Many legacy automakers make internal combustion engine (ICE) cars in China, but there are few competitive Chinese companies.

Not so for EVs. As Tavares’ quote makes clear, China EV makers are fierce competitors.

BYD, which stopped making ICE vehicles in 2022, is leading the charge, but there are many others whose market share is growing. Half of all cars sold in China now come with a plug. What really stands out, though, is the quality of construction. Not only is the fit and finish first rate, but they are technological marvels, befitting China’s role as the largest maker of electronics products.

But the killer feature is price. 

While North American, European, and Korean (Japanese automakers are slow to join the EV game) models mostly start around $50,000, Chinese EVs sell for $10,000 to $20,000 in their home market. BYD, in particular, has slashed prices in the past year, largely due to its vertical integration into batteries (it is the second largest in the world). Tesla, once the industry leader, is losing market share because of its outdated designs.

The bottom line

Imagine a world in which China controls most of the manufacture of the 21st century’s energy (solar), the key technology to make modern power grids and transportation work (batteries), and it makes most of the world’s vehicles. That’s the spectre keeping American policymakers up at night. 

Where does Canada fit into this emerging new world order? Right where it has been for at least the past 60 years: a hinterland to the American metropolis.

Why, then, is Canada pushing clean energy technologies as solutions to climate change instead of industrial policy? The United States has given up on that tact. China was ever only interested in so much as clean energy furthers its geopolitical goals. 

The only possible Canadian strategy: Follow the US lead

No one is under the illusion that Canada is or ever will be a military power. That job was long ago outsourced to the Americans. Justifying EV tariffs as a response to China’s geopolitical ambitions would be silly.

But there is one very good reason for tariffs on Chinese EVs: taking maximum advantage of the US build up of clean energy manufacturing.

Canadians aren’t paying enough attention to the US government’s industrial policies of the past few years. Between the Bi-partisan Infrastructure Act, the CHIPs Act, and the Inflation Reduction Act, the Biden Administration has committed over $1 trillion over 10 years to building new battery plants, shifting factories to make EVs, manufacturing solar panels, modernizing the US power grid, creating hydrogen hubs, and so much more.

That’s just the supply side. Like China, the US is also subsidizing the adoption of many of those technologies by consumers and businesses.

That’s the demand opportunity. The world’s largest economy is embarking on a spending spree the likes of which has never been seen before and Canada is its largest trading partner. Canadian policymakers should be absolutely giddy with glee.

But there is also another motivation, one that Canadians rarely discuss: the world is experiencing another industrial revolution, or the sixth long wave of innovation, if you like. 

This one is characterized by digital (think artificial intelligence) and clean energy technologies. The very ones China is working so hard to dominate.

If Canada is ever to escape its “hewers of wood, drawers of water” past, now is the time. 

Unfortunately, and this is admittedly a very broad generalization, Canada has instead chosen to (mostly) back the incumbents. The oil and gas industry, the monopoly electric utilities, the mining companies, legacy auto makers, and the executives and business leaders who are comfortably in control of the country’s economic status quo.

Now, arguing for EV tariffs might seem to be the quintessential status quo move, but it doesn’t have to be. If we view tariffs as one part of the broader US push back against China’s geopolitical expansion, imposes tariffs will signal that Canada is all in on a Fortress North America strategy.

The next step is to replace the emphasis on climate change with a focus on industrial policy. The activists will howl, but the stubborn fact is that Canadians, like their American cousins, support climate policy as long as they don’t have to pay for it. The popularity of the CPC’s “Axe the (carbon) Tax” campaign proves the point.

An important part of that next step is to copy the American government’s activist role. Justin Trudeau’s Liberal government has enacted more climate policy in nine years than all the Canadian governments before it, but much of it is too passive.

Where is Canada’s Jigar Shah, the US Department of Energy’s frenetic evangelist for all things clean energy? There isn’t one.

The closest approximation is Environment and Climate Change Steven Guilbeault. As befitting a former Greenpeace activist, he sells clean energy policies with an emissions reduction bent. As I argued in this column, the Liberals should ditch him and find a frontman who focuses overwhelmingly on the energy transition.

For example, why sell the federal Clean Electricity Regulations as climate policy in a country where 84 per cent of electricity is already zero-emissions? The far better strategy would be to argue that renewable energy (particularly solar) is already the lowest-cost electricity, it’s on its way to a marginal cost of zero, and that Canada can use that competitive advantage to expand home-grown industry. 

How many jobs might that create? How many opportunities for business expansion? How much extra government revenue to fix an ailing healthcare system?

And no new money for fossil fuel industries unless support is consistent with a clean energy industrial strategy.

For example, only subsidize the Alberta oil sands decarbonization (companies want $50 billion from governments) if there is a corresponding move to build an advanced materials manufacturing sector that uses the bitumen as feedstock for carbon fibre or asphalt binder. Then aggressively support the scale-up a materials sector in Alberta. 

Making carbon fibre instead of gasoline creates over four times the value per barrel, according to Alberta Innovates, the provincial innovation agency leading the Bitumen Beyond Combustion research. Why are we still burning such a valuable resource? Why is Canada (and Alberta) not seizing this huge opportunity with both hands?

It’s what the US and China would do. 

Where is the federal or provincial politician with a vision for the 21st century Canadian economy? Name one. Any party at any level of government. Can’t think of one? Include the business community and academics. Still nothing?

That’s because there is none.

Canada is bereft of big thinkers and risk takers. The country is embroiled in an historic global energy transition and there is no Canadian leader to point the way.

Let’s talk about THAT during Ottawa’s EV tariff consultation.

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Naheed Nenshi is the new Alberta NDP leader. The former Calgary mayor’s record vote total, 86% of nearly 63,000 votes cast, suggests many voters are ready for change. But are they ready for the hard work of changing the provincial economy and its energy systems that is required by the breakneck pace of the global energy transition? Here are three ideas Nenshi and the NDP should consider adopting.

Let’s begin with the obvious: the energy policies (there are few climate policies to speak of) of Premier Danielle Smith and her UCP government are predicated on a slow energy transition. She hews to the OPEC view where substantive change doesn’t even begin until well past 2050. Until then, job number one is lowering emissions to make Alberta hydrocarbons more competitive for the Golden Age of Oil and Gas the Premier and the oil and gas industry think is already upon us.

As I’ve argued many times, the International Energy Agency’s (IEA) rapid transition (announced pledges scenario) appears at this point to be the most likely. But let’s not discount the Rocky Mountain Institute’s very rapid scenario, which lands somewhere between the IEA’s APS (announced policy scenario) and net-zero by 2050 modeling. 

If either of those scenarios comes to pass, Alberta is in big trouble.

Here’s where Alberta stands: Smith is wrong, the oil and gas industry is wrong, but there isn’t much daylight, at this point, between them and Nenshi, as I suggested in last week’s column.

In fact, there are no big, bold ideas to be found anywhere in Alberta.

Academics like Andrew Leach and Trevor Tombe are preoccupied with critiquing current policies. Mainstream media like the Calgary Herald simply reports on the business of the energy status quo. And the scribbling shills for the oil and gas industry, like Dave Yager and Terry Etam, are busy explaining why hydrocarbons are humanity’s greatest blessing and we should enjoy them forever.

There is very little discussion about how Alberta should respond to the disruption of the oil and gas business model.

NDP partisans won’t like to read this, but the party under Rachel Notley wasn’t much better after its 2019 electoral defeat. Aside from some weak flag waving about renewables and climate change, the NDP retreated to its traditional social policy strengths. Insiders have told me that Notley and her campaign team explicitly rejected focusing on the energy transition during the 2023 election.

Judging by his comments to date, Nenshi won’t do much better. Should he want to, here are three areas desperately in need of attention.

Create a new domestic market for bitumen: advanced materials manufacturing

The Alberta Energy Regulator’s 2024 Energy Outlook forecasts bitumen production to rise to almost four million barrels per day by the early 2030s while conventional light sweet crude will remain between 500,000 and 600,000 barrels per day. Never mind conventional production, the oil sands is, for all  intents and purposes, the Alberta oil patch.

Smith and the CEOs are fond of saying that “no credible forecasts” show global oil demand peaking by 2030. In fact, many do: the IEA, S&P Global, BloombergNEF, to name a few. If demand declines in the early part of the next decade, prices will likely fall. Canadian Energy Regulator modeling says that such a scenario will cause significant production declines in the oil sands, perhaps to as low as 1.5 million barrels per day. 

If that happens, Alberta will be devastated.

And let’s face it, bitumen should not be turned into fuels anyway. As Dr. Paolo Bomben of Alberta Innovates explains in the interview below, bitumen’s unique molecular structure (like a sheet of hydrogen and carbon atoms instead of a chain) makes it the perfect building block for advanced materials manufacturing. 

This should be Alberta’s new mantra: don’t burn it, make stuff instead.

Since the oil and gas industry has no interest in venturing outside its historical box, the pivot to a non-combustion oil sands has to be led by the Alberta government. How convenient, then, that Alberta Innovates, a provincial agency, holds the intellectual property for turning bitumen into products like carbon fibre and asphalt binder. Building an advanced materials manufacturing sector will take time, probably 10 to 20 years, but it can be a significant source of domestic demand for bitumen.

Alberta Innovates modeling shows that turning bitumen into carbon fibre creates over four times more value than refining it. Imagine the jobs that can be created and the investment capital attracted by such a moonshot project. 

Perhaps just as important, oil sands producers like CNRL and Imperial will remain viable so they can pay for their unfunded environmental liabilities.

Blow up the Alberta Energy Regulator (AER)

In the Unethical Oil investigative series (here, here), still underway, I reported how almost 100 years of oil and gas development has resulted in approximately $300 billion of unfunded environmental liabilities. Inactive wells, processing plants, pipelines, oil sands tailings ponds and facilities – virtually no money has been set aside to pay for the reclamation of these assets. 

The assumption has been, since the first Alberta oil and gas regulator was created in 1938, that oil companies would be around – and willing – to pay for reclamation. This assumption has proven to be disastrously wrong. Oil companies have no intention to reclaim any more of their old assets than they are explicitly required to by the AER.

Part of the solution to this horrendous problem is keeping the oil companies from failing so that they can afford to pay to clean up their messes, which is why pivoting to a domestic market for bitumen is attractive.

But make no mistake, there is no solution to any of Alberta’s oil and gas issues without addressing the regulatory problem.

Where to begin?

I’ve reported extensively on this issue, but the Unethical Oil series is a good place to start. At the bottom of this column I will link to other key interviews with subject experts. 

But here’s the bottom line: the AER as structured and operated is a captured regulator. That is, it works primarily for the interests of the oil and gas industry rather than the public interest. 

The AER cannot be reformed. An NDP government should blow it up, pass the requisite enabling legislation, and create a new organization purpose fit for managing an industry about to be severely disrupted by the energy transition.

Re-engineer the power sector

Oil and gas isn’t the only Alberta industry about to be disrupted. The story of Alberta’s huge head start developing wind and solar projects – now 14% of generation – and Smith’s August, 2023 moratorium that was lifted in March, then modified to be a “soft” moratorium, is well known. The Premier is no fan of renewable energy.

What’s less well known is the emergence of two electricity grid models and how they apply to Alberta.

The first model aims to change the grid as little as possible. Switch from coal to natural gas-fired generation, then in the mid-2030s or thereabouts replace gas with nuclear power plants. Nuclear is a dispatchable, drop-in replacement for thermal generation. The grid remains stable and reliable, with nuclear – preferably small modular reactors (SMRs) – hopefully providing low-cost, clean electricity. 

The second model, much favoured in jurisdictions like California, is to rapidly adopt intermittent wind and solar while simultaneously re-engineering the grid. This is much riskier, according to advocates of the first model. But experts like Gerhard Salge, chief technology officer for Hitachi Energy (see interview below), argue that a plethora of new grid technologies can make modern grids more flexible, lower cost, and even more reliable. 

Alberta is all in on the first model. But that comes with its own risks. 

Distributed energy resources are becoming ever more viable. What if large industrial and commercial users (which make up 75% of Alberta power consumption) decide to generate their own electricity on-site and defect from the grid? Will remaining customers have to pay much larger transmission and distribution fees to make up the lost revenue?

SMRs are in their infancy. What if they fail to realize their promise, as skeptics argue? Will Alberta be stuck with white elephants that are way behind schedule and way over budget? What’s the economic cost of that scenario?

Smith has directed the Alberta Electric System Operator to undertake market reforms. This is the perfect time for Nenshi to tell Albertans which electricity system he prefers. Or are there other choices?

What will Nenshi do?

At the very least, Alberta should be having a fulsome conversation about these impending, and very serious, issues. Instead, there is plenty of evidence that politicians, policymakers, regulators, and industry are stuck in a slow energy transition fantasy.

What a perfect opportunity for the new leader of the NDP. He could put that conversation on the public agenda by using his new soapbox as leader of the Official Opposition. Perhaps he could convene his own panels of experts to provide advice that leads to the NDP drafting a 2027 energy plank for its election platform that doesn’t look like a pale imitation of the UCP.

There are a million things Nenshi could do, including champion the three issues described above, but will he do any of them?

Judging by his leadership campaign website, probably not. He said early on that it wasn’t for a potential leader to tell the political party what its policies should be, then he basically lived up to his intention of saying little about energy and climate.

Well, that was then, this is now. 

Alberta is suffering a crisis of leadership (refusing to acknowledge that in a decade or so the global energy transition will likely wreck the provincial economy) and Nenshi is the only leader able to rise to the occasion. His first order of business should be to recognize that Alberta is facing an existential economic crisis and his second is to craft a response. This should be his highest priority, bar none.

The time has come for bold action. The New Democratic Party of Alberta is now his to direct. Will Nenshi rise to the occasion? Albertans need to know. 

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Danielle Smith really hates changes to the federal Competition Act that prevent oil companies, mostly located in her province, from greenwashing. There is, however, a simple solution to her angst: oil companies can stop greenwashing. For her part, the Alberta Premier could show leadership by toning down her perpetual outrage. 

For journalists, Smith is like former US president Donald Trump: her firehose of fabulism simply overwhelms attempts to fact check. And, again like Trump, everyone now just assumes that she lies, often and without shame. 

Sadly, Albertans don’t seem to care if their premier fibs up a storm.

What is a bit rich is that Smith accuses the federal government of doing the same.

“Bill C-59, when it receives royal assent, will prevent private entities from sharing truthful and evidence-based information that happens to oppose the extreme and untruthful oil and gas narrative of the federal NDP and Liberals,” she said in a joint statement yesterday.

Nonsense. 

There is nothing in the amendments to existing rules that prevents corporations from telling the truth. They will, however, be required to be more careful that their version of the truth hews more closely to evidence and facts. This is a good thing.

Why, then, does Smith so vociferously oppose Bill C-59?

The Smith playbook

In past columns I have argued that the UCP under Smith fights with Ottawa as part of Alberta’s plan to shield its oil and gas incumbents from the disruption of the global energy transition. 

Canadian oil companies are vulnerable. They are middle-of-the-pack cost-wise, far from markets, and oil sands bitumen, in particular, is very high emissions-intensity at a time when even the Americans are cracking down on “high embedded carbon” in their imports.

Climate policy increases their compliance costs. Modeling from the Canadian Energy Regulator suggests that having to pay all of their compliance costs will make much of current oil sands production uneconomic starting in the 2030s. The companies would much rather put off emissions reductions until new technologies like small modular reactors are available in the mid-2030s to early 2040s to do the job more easily at a lower cost.

Imperial Oil, Canadian Natural Resources, Cenovus, Suncor, ConocoPhillips, and MEG Energy don’t oppose lowering emissions, but they want to do it on their schedule at the lowest possible cost. They think Ottawa’s 2030 targets are arbitrary, unnecessary, and unrealistic. 

Smith, who briefly worked as an oil lobbyist before becoming premier, is their champion. 

Her job is to keep the federal government at bay until the 2025 election, when a more friendly CPC government will presumably gut Liberal climate policies. Her favourite tactic is what I call “enshittification,” which is essentially a blizzard of near truths, fuzzy logic, and outright torquing of the evidence, all communicated in outrageous language at the top of her lungs.

Bill C-59 messes with Smith’s strategy.

While the legislation won’t apply to premiers, it will apply to oil and gas lobby groups. The Pathways Alliance, representing the oil sands producers, is already being investigated for alleged greenwashing by the Competition Bureau after Greenpeace filed a complaint last year. Yesterday, Pathways removed all content from its website, citing “uncertainty” about the new rules.

“These actions are a direct consequence of this legislation and are not related to our commitments or belief in the accuracy of our environmental communications,” CEO Kendall Dilling said in a statement, adding that Bill C-59 creates “significant uncertainty and risk for all Canadian companies regardless of sector, that communicate publicly about environmental performance, including actions to address climate change.”

One of those companies is the Alberta “energy war room.”

The Canadian Energy Centre

When then-premier Jason Kenney created the war room in 2019, it was set up as a corporation with three cabinet ministers as board members. This arrangement prevented it from freedom of information inquiries by nosy journalists. The decision was upheld by the province’s Office of the Information and Privacy Commissioner.

Public interest lawyer Drew Yewchuk explains why this decision was incorrect:

“Because the government did not set up the CEC with an even nominally independent board and retained complete control in the hands of Ministers, the CEC is a department, branch, or office of the Government of Alberta…it should go without saying that the adjudicator’s decision leads to a wildly absurd outcome – the government could move government functions into corporations completely controlled by the executive branch and gain immunity from FOIP.”

Now, I would never accuse executive director Tom Olsen, a former Calgary Herald columnist, or his staff of outright lying. But the Energy Centre articles I read massaged the evidence and data far more than a democratic society should be comfortable with. No one was surprised when the UCP moved the Energy Centre inside the government, where it will be free from the prying eyes of the federal Competition Bureau. 

The joint simply doesn’t stand up to close scrutiny.

Time will tell if the Energy Centre disappears completely or emerges in some other form. If it does reappear, it will no doubt have to be more circumspect in its cheerleading for the oil and gas industry. 

Say what?

If Ottawa succeeds in neutering the energy war room and forcing oil and gas trade associations to tone down their climate claims, who wins? Smith says that Bill C-59 will muzzle “boards and shareholders, silence debate, and amplify the voices of those who oppose Canada’s world leading energy industry.”

Which voices are those?

Since the Tar Sands Campaign ran out of steam a decade ago, opposition to Alberta’s supposedly “world leading energy industry” has essentially evaporated. 

At the same, the voices of those boosting the industry have grown substantially. From Smith and her grovelling government to trade associations and their lobbyists to astroturf organizations to the legion of “oil bros” who police social media platforms, there is a massive campaign both formal and informal to protect Alberta’s hydrocarbon industry. 

Well, it worked. 

From 2012 to 2022 bitumen production rose from just under 2 million per day to 3.2 million per day. Total provincial oil production is now higher than all of ExxonMobil’s global output. Alberta all by itself is the eighth largest oil producer in the world. And let’s not forget the $35 billion Trans Mountain Expansion pipeline Ottawa bought and built for Alberta.

David’s pebbles have been no match for the might of Goliath.

And now, the rest of the story

The oil and gas industry’s real problems are economic. 

As I argued in a recent column, the Alberta oil companies’ business models have been disrupted by the rapid electrification of economies around the world. My guess is that in five to 10 years most of them will be failing or bankrupt. 

To those who scoff at the prospect, former Harvard Business School professor Clayton H. Christensen replies, “…the list of leading companies that failed when confronted with disruptive changes in technology and market structure is a long one.” 

The bigger they are, the harder they fall, and Alberta’s oil giants are not immune from changes to global markets.

Smith may be able to shield Alberta oil companies for a short time, but there is no stopping the disruptive forces unleashed by the energy transition. 

If all parties in the Canadian energy conversation are now required to tell the truth, perhaps that truth is where we should start.

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