Ethical Oil: The Case for Canada’s Oilsands, Ezra Levant, Toronto: McClelland & Stewart, 2010, 272 pages.
EVERY DAY, bitumen plugs up the economic and political works of Canada with another heavy headline. Thanks to the rapid development of the tar sands, Canadians can now read about dead birds, deformed fish, petro dollars, enraged greens or our diplomats’ obstruction of climate change policies with numbing regularity. It seems that Canada has become a major oil exporter to the US with all the conscience of a drunk driver.
Attempting to hand the driver another bottle, Ezra Levant, a former tobacco lobbyist and libertarian activist, offers the reassuring argument that it is all ethical in his book Ethical Oil. Compared to “real competitors” like Nigeria, Levant preaches, Canada is a haven of blood-free petroleum. Therefore, the world will only become a “better place” as Canada triples production from its tar sands. The right-wing hydrocarbon salesman even compares Alberta’s bitumen to fair-trade coffee. But bitumen, a low-grade crude and a signature of peak oil, does not grow on trees, nor has it ever been harvested by peasant co-operatives.
While the oil patch and Canadian elites salute Levant’s ridiculous arguments (comparing Canadian performance to the very worst in any global class is a well-practiced ruse for the morally challenged), ordinary citizens should be disturbed by the boldness of the deception. Anyone who places the adjective “ethical” in front of a commodity or activity such as slavery, tobacco or oil is usually trying to hide a mountain of morally inconvenient facts.
Oil, like most staples, has nothing to do with ethics. It’s always about the money. (In Fort McMurray, workers call volatile bitumen fumes “the smell of money.”) As a consequence, oil raises extreme and difficult issues everywhere it is produced. That’s why economists generally refer to oil as “a curse.” Easy revenue from petroleum invariably weakens institutions, retards economic robustness, captures regulators, undermines government, poisons landscapes and encourages politicians to exchange public policy for corporate gambling. Even John D. Rockefeller, the founding CEO of Standard Oil, rightly called oil “the devil’s tears.”
If Levant’s argument held a shred of truth, surely blessed bitumen would be replacing blood-stained crude from the Middle East to make Canada more energy secure. But it is not. Despite the bitumen boom, foreign crude imports to Eastern Canada have increased by 156 per cent since 1996. Quebec and Atlantic Canada are now more dependent on foreign oil (80 per cent) than the US (70 per cent). While bitumen flows south, half of Canada grows more dependent on a $20-billion-a-year addiction to oil from Iraq, Algeria, Saudi Arabia and Venezuela.
This growing reliance highlights some peculiar moral deficits in Canada’s claim to the status of “energy superpower.” For starters, the North American Free Trade Agreement favours oil exports over energy security. Second, Canada has no national energy vision beyond a market free-for-all. Larry Hughes, a Dalhousie University energy expert, argues that the eastern half of the country must reduce its reliance on oil and switch to green power or face surreal volatility in energy costs.
If bitumen really possessed any miraculous ethical property, tar-sand investors might glow as benevolently as Mother Teresa. Unfortunately, the same morally challenged bunch that polluted the Gulf of Mexico and lied about climate change is now shoveling bitumen in Alberta’s magic sand box. Total Petroleum, which supports the military dictatorship in Burma, plans to open a multibillion-dollar mine here. Shell Canada, which turned much of Nigeria into a bloody hellhole, considers the tar sands a key part of the “global energy-supply equation.” Exxon Mobile, which funded the smear campaign against climate change science, counts on Canadian bitumen for 12 per cent of its proven reserves. And Petro China, undeterred by repression from investing in the Sudan, now has its sights set on dirty crude from Alberta.
Canadian policy and regulation does not demand much moral clarity from oil companies either. The Great White North simply offers what few oil companies can’t refuse: free water, friendly regulators, industry-controlled environmental monitoring, low taxes, even lower royalties and a special bonus of $1.3-billion in annual federal subsidies.
Levant also claims that bitumen is a great job creator, but here again the facts challenge the fantasy. Every time the daily raw-bitumen exports to the US hit another 400,000 barrels, Canada sends another 18,000 jobs to US refineries. At home, oil exports have given us a bad case of the “Dutch disease.” This affliction of oil-exporting nations typically inflates the local currency, making its other goods less competitive. According to Statistics Canada and several university studies, approximately half of the 340,000 jobs lost in this country’s manufacturing sector over the last decade are due to Canada’s rising petro dollar. Dutch disease is progressive: The more Canada relies on bitumen as a trading staple, the less diverse our economy will become.
If bitumen possessed the saintly qualities Levant claims for it, then surely “the most ethical oil in the world” would make Canada a global leader in energy conservation or carbon dioxide reductions. But bitumen’s greasing of the public’s palm has instead made us laggards. Last fall, the Canadian Senate quietly killed a climate change bill that Parliament’s elected members had approved, while our diplomats lobbied against low-carbon fuel standards in the US and Europe. To protect its chief revenue maker, Saudi Arabia has long argued that “there is no relationship whatsoever between human activities and climate change.” Canada now stands right behind the sheiks in obstructionist climate change politics.
Last but not least comes the money – an estimated $500-billion in tax revenue over the next two decades. Petro dollars pumped into government represent what Adam Smith once defined as “the income of men who love to reap where they never sowed.” Norway, a fairly transparent oil producer, had a national debate about its oil wealth. To prevent the country’s dissolution, all parties agreed to take 90 per cent of the money out of government’s hands and create a pension fund for the future. It is now worth more than $500-billion. As a consequence of that decision, Norway runs on taxes instead of oil income. In contrast, Canada has opted to mainline its public services on petro dollars, becoming increasingly beholden to oil lobbyists, with nothing saved for the future. In the last decade, Ottawa has squandered approximately $50-billion in bitumen-tax-related income. Even Jack Mintz, a conservative who sits on the board of Imperial Oil, warns that Alberta will end up looking like a ghost town unless it saves $100-billion by 2030.
Far from a happy blessing, this slow-motion coup by a resource is the greatest present challenge to Canada’s democracy. “Petro states are not like other states,” Stanford political scientist and oil expert Terry Karl has often observed. Oil wealth, over time, not only corrodes democracy, it leaves a legacy of “over-centralized political power” with “networks of complicity between public and private sector actors.” Ezra Levant serves industry’s desire to obscure the scale of this curse with his Disneyland jingle about ethics. Ordinary people in Saudi Arabia, Nigeria and Venezuela have heard this sad tune before. It seems oil can buy almost any illusion and lubricate any lie.
Watch a video of Andrew Nikiforuk debate “ethical oil” with Ezra Levant at vimeo.com/16629722.
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