A Silver Lining to COVID-19?

As an optimist I tend to look for silver linings in the darker clouds. The other day I read an article saying some Italians remarked that they could finally hear birds sing and see blue skies as a result of the decline of industrial activity caused by COVID-19. Something good at least had come out of the pandemic. Of course, for the cynics, there was also an unintended message, i.e. the Earth would be a lot better place without human beings to muck it up, including causing monster viruses.

But back to the silver lining. Among the things the bug has shown us, two could have positive outcomes. One, we are seeing the interconnectedness of all of us. We are truly a global society. And two, our global society is a lot more vulnerable than we might like to think. The interconnectedness has been illustrated by the speed with which the virus traversed the globe, confirmed by the desperation with which we try to stop it. The vulnerability has been illustrated by how just one minuscule bug can fracture our society while seriously undermining our health and our economy. Is it possible that these two lessons could wake more people up to the climate crisis?

After all, global warming is ultimately a far more serious threat than COVID-19. Our need to recognize the vulnerability of global society and to act collectively is therefore also far greater. Global warming, too, can spread disease. And it has many more dirty tricks up its sleeve: more frequent and more intense fires, storms and droughts; rising sea levels with massive flooding of cities and even countries; the melting of glaciers with the consequent exhaustion of water supplies; the acidification of the oceans and the death of the world’s coral reefs; disruption of ocean currents ironically creating another ice age in Wesstern Europe; and so on ... and so on. Global warming could even become irreversible and then it's a countdown until planet Earth is uninhabitable for Homo sapiens.

This cascade of catastrophes is heading our way—or is upon us now. Will this nasty little bug wake up enough skeptics and deniers such that humanity will do what is necessary to avoid the apocalypse? We really shouldn’t need a wave of suffering and death to alert us to the need to save ourselves from ourselves, but the evidence convinces even my optimist self that we probably do. If the virus does this it will truly have brought a silver lining along with the misery.

Oil Capitals Hunker Down

To Calgarians, the city is starting to feel like a punching bag. Its primary industry suffers one body blow after another. Oil prices crashed at the end of 2014 as surprising growth in U.S. shale production boosted supply while OPEC refused to cut its output. Major investment firms, finally recognizing climate change, have been turning away from oil one after another. Teck Resources decided earlier this year to abandon its proposed Frontier tar sands mine. And now a double blow: the COVID-19 bug has dramatically reduced oil demand while Russia and OPEC end their production alliance and engage in a price war. One punch in the face after another leaves the oil capital of Canada reeling.

The degree of the assault is a surprise but the assault itself shouldn't have been. What is more surprising is that North America's other oil capital—Houston—is also taking a beating. After all, Texas is the home of the Permian Basin, a major producer of shale oil, the very product that has largely undone tar sands oil while doubling U.S. production in under a decade and making that country the world's largest producer. But of course the drop in prices brought on by that surge in supply has hit shale oil as well. And now the climate change and  COVID-19 effects and the Russia-OPEC price war are further hammering the shale oil business. And hammering Houston. The oil industry drives a third of the city’s GDP and directly employs a quarter-million workers. Shale oil producers, like tar sands producers, can't make money when crude sells at $31 per barrel.

Bobby Tudor, chairman of the Greater Houston Partnership, warned recently “The oil and gas business is not likely to be the same engine for Houston’s growth over the next 25 years that it’s been in the past 25 years,” and went on to add how climate change has put  the oil industry “out of favor at the moment, in most every corner of the investing and political world.” Familiar words to Calgarians.

Oil and gas aren’t going away overnight, but the handwriting is on the wall. Ninety-five percent of new capacity being added to the Texas grid is solar, wind or storage.

Both capitals ponder their futures as they struggle with their finances. Both talk about diversification, tossing around words like data science, software engineering, innovation centers and other greener industries. Both cities are well-educated and entrepreneurial so the potential is there. The early cultures of the two cities was Western. A trace of nostalgia remains in both cities illustrated by a certain penchant for cowboy boots and Stetson hats. It's now time for the boots and hats to mosey on down to greener pastures.

The Baby Boosters

According to the Worldometer (the world population clock), at 12:22 p.m. today the planet's population of Homo sapiens was 7,769,974,138 with a net gain (births over deaths) of 114,862 so far this morning. You might think this was more than enough of us, given that we are multiplying on the Earth like a fungus, devouring its resources.

But to some it seems there is never enough of our kind. “Give birth!” Venezuelan President Nicolas Maduro declared recently. “Every woman is to have six children! Every one! For the good of the country!” This from a man who has run his nation into utter dysfunction. Hospitals are barely functioning, women can't breastfeed properly because they are malnourished, and baby formula is unaffordable. But breed on, ladies. Perhaps he is just trying to replace Venezuelans faster than they can flee his corrupt, incompetent regime. So far about 4.5 million have fled.

In Hungary, President Orban offers IVF clinics, generous loans for couples who promise to procreate, and lifetime income tax exemptions for having four or more children, in order to encourage Hungarians to multiply.

Countries across Europe and other developed nations are instituting baby bonuses as their fertility rates decline. As Katalin Novak, Hungary’s minister of state for family, youth and international affairs, puts it, “Europe has become the continent of the empty crib.” In Eastern and Southern Europe, the declining rates are aggravated by young people seeking greener pastures elsewhere. These countries have legitimate worries about the economic ramifications of aging populations, but there is of course no shortage of young, industrious workers in the world. They are called immigrants and literally millions are desperately looking for places to make a fresh start.

But the repopulation is about much more than economics. It's also about building up the tribe. Vladimir Putin declares, “Russia’s fate and its historic prospects depend on how many of us there are … it depends on how many children are born in Russian families.” Putin, Orban et al. don't want people; they want racially correct people. It becomes some kind of population race.

It is one thing to provide children's benefits to assist lower income families, such as our Canada Child Benefit, but promoting population growth for growth's sake on a planet already swarming with excessive humanity is not just foolish, it's unsustainable and potentially suicidal.

The Cartel Still Rules ... Sort of

It isn't easy to convince nominally free-market Albertans that monopoly and government interference in the market made us rich, but of course they did. Nothing has contributed more to the province's coffers than OPEC, the oil-producing countries' cartel. OPEC's control of supply has kept oil prices well above what a free market would provide and that has kept Alberta's oil economically viable and made the province rich. It's fair to say that without OPEC there would never have been a tar sands industry.

Of course, the cartel's clout isn't what it was. It now controls only about 40 percent of the world oil market unlike the early '70s when it controlled 70 percent and first realized its monopoly power. Nonetheless, it still has muscle, particularly when it allies with another major producer. For the last three years it has teamed up with Russia to constrain supply and keep prices up. However that arrangement collapsed acrimoniously on Friday when Moscow refused to support deeper cuts to cope with the drop in demand caused by the coronavirus. OPEC answered by unleashing it own production. Oil prices have dropped accordingly.

Canada's oil patch is bracing for what Judith Dwarkin, chief economist at RS Energy Group, is calling a "toxic recipe" for prices. With the coronavirus effect and now OPEC freeing up supply, things are not looking good. Incentive to invest in oil declines even further. Can bankruptcies be far behind?

Do not be surprised if Jason Kenney blames both the coronavirus and the collapse of the Russia-OPEC deal on the diabolical machinations of the Prime Minister. Justin will stop at nothing.

On the Subject of Pandemics

The illness and death toll from the coronavirus, or COVID-19 as it is now known, steadily advances. As I write, the bug has sickened over 95,000 people and killed over 3,300, mostly in China. It still has a long way to go to match the flu which annually takes hundreds of thousands of lives globally, 3,500 on average in Canada alone. But both pale by comparison to the villain discussed in an article published by the European Society of Cardiology entitled "The world faces an air pollution ‘pandemic.’"

According to recent research by the Max Planck Institute, global air pollution caused an extra 8.8 million premature deaths in 2015, more than HIV/AIDS, parasitic and vector-born diseases such as malaria, and all forms of violence, including wars, combined. Even more than smoking (7.2 million deaths).

The researchers looked at the effect of air pollution on six categories of disease, including lung cancer, heart disease, and other non-communicable diseases including conditions such as high blood pressure and diabetes. They distinguished between human-made air pollution and pollution from natural sources such as desert dust and wildfire emissions. About two-thirds of the premature deaths are caused by human-made air pollution, mainly from fossil fuels. Five and a half million deaths a year potentially avoidable.

No viral diseases are as guilty. The bugs are nasty but by far the worst damage done to us we do ourselves. And perhaps first among our instruments of mischief are fossil fuels.

Is Kenney Coming After Our Pensions?

Premier Jason Kenney, ardent free market conservative, has started sounding a little like Peter Lougheed, a former premier with more progressive conservative leanings. Indeed Lougheed was once labelled "Peter the Red" by B.C. Premier Dave Barrett after he bought Alberta an airline. Lougheed never hesitated to dive into socialism when he saw an advantage for Alberta. In 1973 he established the Alberta Energy Company (AEC) to be owned equally by private shareholders and the Alberta government. It is Lougheed's AEC that has caught Kenney's eye.

And that's not all that has caught his eye. He is also gathering up civil servants' pensions under the umbrella of the government-owned Alberta Investment Management Company (AIMCo). The government has announced that the Alberta Teachers’ Retirement Fund as well as funds managed by Alberta Health Services and the Workers’ Compensation Board are to be turned over to AIMCo for investment management.

Three other plans have also attracted government attention. The Local Authorities Pension Plan (LAPP), the Public Service Pension Plan (PSPP) and the Special Forces Pension Plan (SFPP) had recently become independent of government, to be equally managed by employers and union reps. This change, long sought by public workers, was introduced in legislation by the former NDP government. The change gave over 351,000 public sector employees, including government and municipal employees, health-care workers, firefighters and police officers, joint control of their pension funds.

The new government has now restored government control. It has mandated AIMCo as permanent investment manager with no discretion for the plans to make changes. Boards of directors, currently appointed by the sponsor groups, will henceforth be appointed by government.

And not only Alberta pension plans are under scrutiny. One of the items being examined by the province’s “Fair Deal” panel is Alberta taking control of its share of the Canada Pension Plan. A separate Alberta pension plan could then also be tucked into the warm embrace of AIMCo.

Kenney's pension-grabbing may stem from a concern about where future oil investment is going to come from. His concern is well-founded. Major investment institutions such as BlackRock and J.P. Morgan are making environmental concerns central to their investment strategies. Even Norway's massive sovereign wealth fund, which was built by oil revenues, is ditching its tar sands portfolio. Foreign oil corporations have been selling off tar sands assets to Canadian companies. Apparently even U.S. shale drillers, who have been leading a phenomenal growth in oil production, are now seeing the money pipeline drying up.

If the premier's plan is to open up a pipeline with our security blanket, we pensioners (I am a member and beneficiary of the LAPP) have great cause for worry. AIMCo is committed to its fiduciary duty to act solely in the best interests of the members, but the AIMCo Act explicitly states that it must follow directives issued by the Treasury Board. Presumably that includes directives aiming investment at tar sands mines. What irony for me, a long-time advocate of strong action on climate change, if my pension fund were used to fuel global warming.

Justifying Lougheed's decision, Kenney stated, “The Toronto banks and the foreign funds, they weren’t going to go there. A lack of access of capital was met by bold leadership and public participation.” Well, they aren’t going there today, either, but for very different reasons. As Calgary Herald columnist Don Braid put it, "The earlier premier was launching an energy economy with infinite prospects. Kenney is trying to preserve it." Bold leadership today is moving away from fossil fuels, not desperately clinging to the past.

Wet’suwet’en—A Divided Nation

I have on a number of occasions sat with fingers poised over my keyboard attempting to write something about the Wet’suwet’en/pipeline issue. Too many issues keep cropping up in my mind frustrating my ability to see it all clearly. I am no doubt conflicted in part because the Wet’suwet’en are themselves conflicted. They are a divided nation.

They have two governments: one, the hereditary chiefs, almost unanimously oppose the Coastal GasLink pipeline; the other, the band councils, almost unanimously support it. Families are split over the issue. Hereditary chiefs go east to thank the Mohawks for backing them with railway blockades; a Wet’suwet’en businesswoman suggests blockaders "mind their own business."

The split is understandable. Our governments have failed to bring the hereditary chiefs adequately into the decision-making even though this is the body responsible for use of Wet’suwet’en land. And the Wet’suwet’en are concerned about the environmental effects of the pipeline on their territory, quite aside from the production of ever more fossil fuels.

On the other hand, the pipeline will carry natural gas, the least offensive of the fossil fuels. A leak would do little if any damage to land and water resources. And the Wet’suwet’en would benefit greatly from the line. Apparently Coastal GasLink has been exceedingly generous in its offers of compensation. According to a leaked agreement with the Nak'azdli Whut'en, it is offering general project payments, annual legacy payments over the lifetime of the pipeline, education and training benefits, and contracting and employment opportunities. And in addition there will be benefits from the provincial government.

The project offers the Wet’suwet’en prospects of a more financially secure future for themselves, their children and their community. We must eventually stop burning fossil fuels, but they will nonetheless continue to make up a large part of our energy needs at least in the short term. Why should the Wet’suwet’en not get a piece of the remaining action?

Personally, I am strongly opposed to combusting more fossil fuels, but stopping the pipeline would cost me nothing. It would cost the Wet’suwet’en a great deal. What would it say about me to sacrifice their prosperity on the altar of my beliefs?

The Price Ain't Right

Back in August of 2018 our federal government bought us a pipeline. Not exactly a bargain, it set us back $4.5-billion. The pipeline, the Trans Mountain, carries oil from Edmonton to Burnaby, B.C. The government's reason, apparently, was to reassure Albertans that it really did want to help them get more oil to market. If we owned the pipeline, we could ensure that the proposed expansion to the line would be built—at a cost of a further $7.4-billion, rather more than the previous owner's estimate of $5.4-billion. The expansion was popular at the time with 57 percent of Canadians supporting it and only 26 percent opposed.

How things change. On February 7, Trans Mountain President and CEO Ian Anderson announced that the company’s expansion project would now cost $12.6-billion. Canadians' opinions changed in a hurry. Support, which had declined only slightly now dropped below 50 percent for the first time. Opposition jumped to 45 percent. We are now close to equally divided.

British Columbians, however, are more opposed than supportive. Over 60 percent of Quebeckers and almost half of Ontarians oppose the project. Albertans, needless to say, remain overwhelmingly in support. But for most Canadians, the truth is sinking in. We just may have a white elephant on our hands.

The legal hurdles appear to have been cleared, but now we face the critical hurdle—money. Who exactly is going to lay out $12.6-billion on an investment to move more dilbit? The investment markets are in fact trending very much in the other direction. So if a buyer doesn't step up, I guess it's on us, folks.

Why Would the UN General Assembly Elect Canada to the Security Council?

Prime Minister Trudeau has been hustling around the world, attempting to round up votes for Canada when the UN General Assembly elects members of the Security Council in June. Two seats are available for the Western European and Others Group, and three countries are in the running: Norway, Ireland and Canada. We've been elected to the council six times but infamously lost our bid in 2010 to Germany and Portugal.

So will enough countries vote for us this time? I wouldn't. What exactly have we done to deserve it? Our record on the most important issue facing the international community is appalling. As I noted in a previous post, we are consistently among the top three per capita greenhouse gas emitters in the G-20 and among the three least likely to meet our targets. Our competitors' do much better, easy for Ireland because it has no oil industry but Norway has a thriving oil industry and still gets its emissions down to almost half of ours.

On foreign aid we are a slacker. The UN aid target for a developed country is a minimum of 0.70 percent of its GDP. We give a measly 0.28. Ireland does a little better at 0.36 while Norway is well over the target at 1.05, one of the world's most generous countries. We were at one time a leader in peacekeeping, a concept we practically invented, but now we seem to have largely abandoned the enterprise. In 1993 there were 3336 Canadian peacekeepers deployed on UN missions, in 2019 only 150.

After his impressive election win in 2015, Trudeau announced, "Many of you have worried that Canada has lost its compassionate and constructive voice in the world over the past 10 years. Well, I have a simple message for you: on behalf of 35 million Canadians, we’re back." Well, call me naive, but after a dreary decade on the international front with Stephen Harper, I believed him.

Yet here we are. A foreign aid budget of 0.28 percent of our GNP is not particularly compassionate and being a laggard on greenhouse gas emissions is hardly constructive. We seem to be idling along, failing our commitments to the international community, while hoping that same community will somehow recognize our inherent virtue and elevate us to the Security council, just  as we did with Harper. Plus ça change, plus c'est la même chose.

A Letter from an Albertan to His Prime Minister About the Tech Mine

Over the weekend I wrote a letter to Prime Minister Trudeau about the proposed Teck Frontier tar sands mine and cc'd appropriate parties. The letter is below. I felt it was important to let the feds know that not all Albertans are in denial about the climate crisis. I hope other like-minded Albertans will do the same. We can but try.

9 February 2020

Prime Minister Justin Trudeau
House of Commons
Ottawa, Ontario
K1A 0A6

Dear Prime Minister:

In 2015, you indicated a desire to make Canada a climate leader. Today, we are consistently among the top three per capita greenhouse gas emitters in the developed world and among the three least likely to meet our targets. Rather than a leader we have become a laggard.

And now your government faces a decision about the Teck Frontier tar sands mine. If we are to have any chance of being considered a climate leader, we must reject the folly of adding even further to the climate crisis.

I am quite frankly embarrassed that a country as rich as ours is failing its responsibility to the international community. Indeed, as a resident of Alberta, the pollution province, the prime agent of our delinquency, I am doubly embarrassed. This would not be the case if our government would accept the gravity of the crisis and take measures to transition us from where we are (heavily dependent on fossil fuels) to where we need to be (a low carbon economy). Unfortunately it is instead doubling down on oil. It is clinging to the past.

Therefore, whether or not we are to hold our heads up on the world stage depends on your government. I urge you to make the decision in the interests of all of us and reject this project. As for we Albertans, the very best thing you can do for us is to creatively and generously assist us in the essential transition.

Sincerely
Bill Longstaff

cc. The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Intergovernmental Affairs
    The Honourable Jonathan Wilkinson, Minister of Environment and Climate Change
    Greg McLean, MP Calgary Centre