Trudeau ‘energy transition’ speech positions him as global policy leader

Prime Minister Justin Trudeau at CERAWeek 2017.

Trudeau understands emerging clean energy technologies will compete with fossil fuels for many decades

Prime Minister Justin Trudeau gave the most important speech of his political career Friday in Houston. He told more than a thousand Big Oil executives that Canada is firmly embarked on a decades-long transition to clean energy technologies. Trudeau has established himself as the global leader of those nations navigating their way to a low-carbon future.

Am I biased? Absolutely. I began reporting and writing about the transition from fossil fuels to clean energy technologies five years ago, based on the work in my graduate thesis about the transition from horse-drawn technology to power-farming in Saskatchewan, 1900 to 1930.

Turns out the basic theories and scholarship about new technology adoption are just as applicable to electric vehicles and wind turbines as they are to the Fordson tractor circa 1918.

That’s the way we need to view the energy transition: it’s not about the fuels (coal, oil, natural gas) themselves, it’s about the technologies that burn those fuels (automobiles, home furnaces, airplanes, etc.).

I interview experts about energy technology all the time. One of my standard questions is, “Do clean energy technologies look like they are adhering to a typical technology adoption pattern?”

In other words, are EVs and solar power and battery storage and virtual power plants and the thousands of corollary technologies being adopted in roughly the same manner as tractors and combines and seeders?

Chevy Volt Battery.

The answer is always, yes.

Despite what you read in boosterish news sources like Bloomberg New Energy Finance or Cleantechnica, clean energy tech is nothing special if you look at it as just another technology.

The rule of thumb for the length of time a new technology takes to achieve market dominance, which I define as 70% to 80% marketshare, is about 50 years. Sometimes the rate is slower, sometimes it’s faster, but generally universal adoption takes half a century (probably more in the case of clean energy tech because we’re talking about decarbonizing the global economy; let’s say 2100, just to be safe).

And adoption always starts with Innovators, those folks who have to have the latest gadget, the ones who camp out for three days in front of the Apple Store for the latest iPhone.

Innovators – who make up around 2% of consumers – are willing to pay a very  high price premium for new stuff, often more than two or three times the cost of existing technology. This is why Tesla Model S electric cars, which sell for well over $100,000 new in Canada, are bought by wealthy Innovators.

As clean energy technologies develop, their costs drop, their value to consumers rises, and they begin to move up the adoption S-curve and from left to right on AE Rogers’ technology diffusion bell curve, slowly being bought by more and more consumers – from Innovators to Early Adopters to Early Majority Adopters to Majority Adopters and so on.

Eventually, even your 90-year old grandfather has got a smartphone or a flat screen TV.

So, when the Prime Minister of Canada tells 1,200 hardcore American oil and gas executives, journalists, and industry representatives “I knew that there is no path to prosperity in Canada that does not include a thriving, vibrant energy sector, both traditional and renewable,” that is big deal.

That is Trudeau planting his flag on a very important hill in the most important battleground of modern politics: how the global economy uses energy.

This is the crux of the Prime Minister’s speech:

“The [Alberta oil sands] resource will be developed. Our job is to ensure that this is done responsibly, safely, and sustainably. Which brings me to the second piece, equally critical. While developing our resources for the economic benefit of Canadians, we must also look to the future…there will come a day, far off, but inevitable at some point, when traditional energy sources will no longer be needed. In preparing for that day, we have two critical responsibilities. One is to sustain the planet between now and then so we can pass it on to our children better than we found it. And the second is to get ahead of the curve on innovation.”

At the end of his speech, Trudeau received a standing ovation.

Jason Kenney (left), leadership candidate of the PC party, Brian Jean, Wildrose leader. Photo: CBC

Canadians – particularly Albertans like Wildrose leader Brian Jean and PC party leadership aspirant Jason Kenney – may be surprised that the fabled hardbitten Texas oilmen would applaud a worldview that sees their livelihood eventually phased out.

But those Texans – some of whom I have interviewed – know Trudeau is right. And they say as much in those interviews. They know full well that clean energy technology is crawling its way up the S-curve and that they must plan for they day solar and wind and EVs are the norm.

Those Texans also know Donald Trump won’t be president forever. And that even while he is, the long-term march toward better clean energy tech will continue in the laboratories of Stanford University and the start ups of Austin.

Trudeau is at the front of the energy parade, not Trump. The CERAWeek delegates know it, polling data says most Canadians know it, now it’s time for Albertans to acknowledge it.

The Alberta oil and gas industry will be far more prosperous under governments that embrace the energy transition than it will be under political parties that reject it.

Posted in: Markham on Energy

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