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COMMENTARY · 27th January 2012
Alexander Pietrall
These past weeks have seen this region jumping to the forefront of the national and even international news. The Northern Gateway project is a subject of such extreme controversy that it is very hard to fathom how it can ever be nation binding. The time has passed that Canada defines a national energy policy, thereby engaging its constituents into the discussion on a broad basis.

This neglect, to determine what Canadian’s desire to achieve with their natural resources (ie. Oil, Gas, Water, Wood, Minerals etc.), and defining a strategy is now at the root of the dilemma. As much as China is trying to heave millions out of poverty and is in dire need of all kinds of materials to fulfill this plan, it also regards any nation that is simply selling their non-value add resources off as a second class nation. One that does not understand the necessity to build tomorrow’s economy with today’s policies.

Oil is at the very bottom of one the largest and most important ‘Value-Add Chains’, which exist in the modern world. Everything from our cell-phones, to computers, drugs, vehicles, bike tires etc. is all somehow linked to oil. One would think that the oil rich countries are then also the most modern in terms of their manufacturing capabilities. The exact opposite seems to be the case with such large scale oil producers like Venezuela, Nigeria, Saudi Arabia or Iran. Most simply take the easy way out, stay complacent and live a life from the land that feeds them, without ever adding any value whatsoever. The little value that is added in a refining process in Alberta is laughable compared to how much more could be done with the full range of petrochemicals.

Furthermore and even more worrisome, is the obvious neglect to use the oil rich era as a bridge technology into a fossil free energy future. The process of reducing our dependence on fossil fuels is a long one that needs a different type of education, more engineers, more money for entrepreneurs, and the right policies in place to spur innovation and then venture capital into this direction.

Today’s oil and gas revenues should feed into a trust fund that on a provincial and national level finances the above. In addition the revenues could soften the blow this society will face when the baby boomer’s all retire, drawing their well deserved pensions from a society that is getting older and older.

The insurance policies oil producers and pipeline builders need to run their operations should be transparent to minimize the distrust in anything related to oil. The track record of the petrochemical industry in terms of transparency, openness and ethical corporate governance suggests these things will never happen. The question is - why not?

The best business negotiations, in fact in any business contract, wheelings and dealings that focus on creating a win-win for both involved sides are the most prosperous ones as they are built on trust. Neither side looses their face.

With the Northern Gateway Project we have the oil industry on one side and the general public on the other side. Has this ‘negotiation’ taken all alternatives into consideration? Is the route wrong and should we use an existing pipeline corridor through Banff/Jasper National Park into Vancouver. This route would be cheaper to build as it adds onto existing infrastructure. The sailing route to Asia does not pass through 300 km of channels, but into an open ocean once passed the Juan de Fuca straight.

Does it have to be crude that we ship, or can/shall we ship refined materials? Do the Chinese still need our oil once this drawn out regulatory process is done and a pipeline built? China is at the forefront of green energy manufacturing and is heavily investing into electric vehicles today.

Do we use the revenues of today’s petrochemical industry to propel us into a greener and non-fossil fuel future? Should we not save our oil and stretch it over time so we have it for the non-transport uses that are so vital to our everyday life? Maybe invest in companies like Vancouver based Ballard to speed up their innovation-to-market process and getting combustion engine vehicles on mass off the road ?

And who is then building the infrastructure to electrify these vehicles – could it be this natural resource fund that is filled by today’s revenues? Might we allow municipalities to draw their initial 33% of capital for communal projects, out of this fund?

Shall B.C. demand that this fund is created? Shall B.C. demand that the benefits go where the most risks lie? Shall B.C. demand transparency in insurance protection once a disaster does happen?

Can Canada still create this win-win situation with our customer’s and with the people that live here?
Comment by blocky bear on 28th January 2012
Thank you sir for your thoughts! As I read your commentary I thought this is my way of thinking. Thank you again for spelling it out for the rest of us! d.b.