By December 27, 2017 Read More →

Kevin Taft’s claim for Big Oil-controlled Canadian ‘deep state’ ignores Climate Leadership Plan

Belief in Big Oil “deep state” treads dangerously close to conspiracy theory

Has Big Oil subverted democracy and installed a polite version of the “deep state” – a state within a state intended to further industry’s interests at the expense of pubic interests – in Canada? Are public institutions in Alberta “captured” by the Petroleum Club cabal? Kevin Taft, former Alberta Liberal Party leader, makes that case in a Maclean’s op-ed. Taft is often described as the smartest guy in the room, but you wouldn’t know it from his flimsy argument.

Author and former politician Kevin Taft.

In fact, Taft does Canadian political debate a disservice by deflecting attention from what is really going on in Alberta: a cage match-style struggle between progressives and conservatives within the oil industry itself.

Taft is also the author of Oil’s Deep State, in which he details how Big Oil has spent billions around the world to prevent governments from taking action on climate change.

This is really the crux of his argument.

“The link between fossil fuels and global warming has been known since the 1980s, and so has the solution to global warming: phasing out fossil fuels,” he writes in Maclean’s.

“Rather than accepting the science and adapting to other sources of energy, the oil industry has developed an aggressive campaign to obscure the science and advance its own interests.”

Big Oil did, indeed, impede public acceptance of the dangers of climate change with massive advertising campaigns, as Geoffry Supran of Harvard described in my Sept. interview with him about ExxonMobil.

The problem with the arguments of Supran and Taft is that Big Oil lost that political battle, as the 2015 Paris climate accord amply demonstrates. The industry – from super majors like Exxon and Royal Dutch Shell to Saudi Arabia – acknowledges the dangers of global warming, supports carbon pricing, invests in clean energy technology, and is beginning, albeit slowly, to transition into energy companies write large instead of just fossil fuel producers.

But Big Oil is not a monolith.

While enlightened head offices in the Hague or Dhahran (I can’t believe I just wrote that) understand the global economy has begun an energy transition that will eventually flip the current reliance upon coal, oil, and gas to electricity generated by clean or low-carbon source, there are still pockets of resistance.

Saudi Arabia’s Energy Minister Khalid al-Falih, who publicly acknowledges seriousness of global warming, Energy Transition.

Donald Trump’s America, for instance.

My LinkedIn feed is full of comments from Alberta middle management oil and gas types who praise the United States’ repudiation of Paris, condemn climate change as a hoax, hate the carbon tax, and chide CEOs and politicians they think have succumbed to “leftists ideology.”

No wonder Taft thinks the Canadian Association of Petroleum Producers has “captured” the Alberta “deep state.”

As proof he points to the CAPP’s A competitive policy and regulatory framework for Alberta’s upstream oil and natural gas industry report, released this past summer, that recommended forming a Sustainable Prosperity Steering Committee comprised of senior industry representatives and key provincial ministries, including the Premier’s Office.

“The intent of the committee would be to provide government and industry oversight to steward reform initiatives and drive performance on key files, with a view to minimizing cumulative costs on industry while still achieving government outcomes,” Taft writes.

“In short, Canada’s staggeringly powerful oil industry wants “oversight” (their word) of political, civil service, and regulatory institutions in both the Alberta and federal governments. Do the words “deep state” start to take on more meaning now?”

No, not really.

The context for CAPP’s request is a wholesale reform, as Taft himself acknowledges above, of the federal and Alberta policy and regulatory framework within which industry operates. Those reforms are the response to climate change concerns – e.g. the high carbon-intensity of oil sands crude, methane leaks from natural gas infrastructure  – and commitments Canada, supported by Alberta, have made to its Paris emissions reductions targets.

But companies investing tens of billions each year prize what they call “regulatory certainty” and change makes investors very nervous, especially if it increases operating costs at time when global oil and gas markets are undergoing structural changes wrought by new technologies, such as hydraulic fracturing, that have unlocked tremendous new supplies of oil and gas and created a “lower forever” price environment.

CAPP’s competitiveness document is definitely push back by the conservative wing of the industry, an attempt to stall and influence reform.

But Taft ignores the fact that Notley ignored CAPP’s demands. She didn’t form the steering committee and she politely pointed out that her government has consulted extensively with industry.

The NDP leader could also have pointed to the support of big oil sands producers like Suncor and Cenovus, who stood on stage with Premier Rachel Notley in 2015 during the announcement of the Climate Leadership Plan, the most aggressive sub-national climate mitigation strategy in North America outside of California.

Industry’s leaders like Suncor’s CEO Steve Williams publicly acknowledge the climate change threat and have committed their companies to significantly reducing greenhouse emissions, which not coincidentally also lowers their operating costs and makes them more competitive in an increasingly carbon-constrained global market (see China’s Dec. 19 launch of its national carbon market).

These same oil sands producers worked closely with government to design the recently announced Carbon Competitiveness Incentives, which includes an oil sands emissions cap, a carbon levy, output-based allocations, and a $1.4 billion Innovation Fund designed to foster technical innovation that address climate issues.

Dave Collyer, former head of CAPP.

Progressive industry players like former CAPP head Dave Collyer, (see other relevant columns here, here, and here) who co-chaired the provincial Oil Sands Advisory Group with environmental firebrand Tzeporah Berman, support Notley’s Climate Leadership Plan.

Yes, just like their conservative colleagues at CAPP and industry associations they worry about the effect of more and more regulation on costs, as well as the Canadian industry’s ability to compete in global markets going forward.

But the progressives also recognize the world is changing and Alberta has to change with it.

I once asked Collyer what percentage of the notoriously conservative Alberta-based industry thought of itself as progressive, thinking it might be five or 10 per cent. About half, he replied.

That split illuminates the current power struggle between conservatives and progressives currently riving Calgary energy head offices that Taft – and his many cheerleaders on the Canadian left – has missed.

Back when Taft was leader of the official opposition (2004 to 2008) and conservative Alberta premier Ralph Klein regulated and taxed the provincial energy industry with a light hand, the argument for a Big Oil-controlled “deep state” might have had some currency.

Those days are long gone. Even if United Conservative Party leader Jason Kenney becomes premier in 2019 and tears up the Climate Leadership Plan, the structural changes in the global energy industry and the direction of Canadian policy – buttressed by rapidly evolving national public opinion on climate change – will ensure that the progressive view of energy will eventually win out in Alberta.

“The hard truth is that in coming decades the oil industry must be phased out in Canada and around the world if we are to avoid catastrophe from global warming. A healthy democracy can rise to that challenge; a country run by oil’s deep state cannot,” Taft concludes.

Canada and Alberta are already rising to that challenge. For some inexplicable reason, Kevin Taft completely failed to notice.

Posted in: Markham on Energy

2 Comments on "Kevin Taft’s claim for Big Oil-controlled Canadian ‘deep state’ ignores Climate Leadership Plan"

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  1. Glen Schmidt says:

    Energy in transition is no different than the technology & progress that has advanced since the industrial evolution, technology & time creates the options that have succeed as well as indentifying those that do not.

    Politics and its evolution has its own fits and starts. Ideas that may lack sustainability can march on until the cost of carrying the unworkable collapses policies that never did work.

    Climate change and science are not articles of faith but facts which can be discerned. Carbon has an impact but the science, not the politics tells us a story where adaptation and investment in technology which will mature in its own time.

    Declarations of the climate crusade which overstates observations and accepts no question will fail as both economic and practical realities assert themselves.

    Canada can and should develop its resources, they are needed and of the highest quality. Alternate energy options that can compete will advance. We should neither panic nor ignore a natural process which will consume decades.

    We should also respect that reasoned minds can fairly conclude that we need not rush into a political carbon campaign where facts and time can allow us to utilize our resources & also not waste them. The Carbon crusade needs its own reformation not surrender as accolates to a movement.

    We can think for ourselves.

    • Rick Collins says:

      bla, bla! The World decided in Paris! Technology is hitting the roll out phase already (didn’t you read the column) . Knuckle dragging was yesterday!