The trouble with staking Alberta’s future on oil

There’s more to the province’s energy woes than carbon taxes, pipelines and protests

Alberta oil pumpjack

an interview on CBC’s The National, United Conservative Party (UCP) leader Jason Kenney last month espoused a view that is persistent in Alberta politics — that the province can once again make a fortune in the oil industry.

“We’re talking about trillions of dollars of potential wealth,” Kenney said, perched on a chair in a coffee shop across from CBC host Rosemary Barton. “There’s a growing global demand, whether people like it or not, for oil and gas through at least the year 2040.”

But with changes in the world’s appetite for oil — and global goals to reduce carbon emissions — Albertans are left to wonder if this is still a safe assumption.

“It’s a pipe dream,” Gordon Laxer, a political economist and professor emeritus at the University of Alberta, told The Narwhal. “We are in the twilight of oil.”

Kenney was citing a report from the U.S. Energy Information Administration that projects increasing oil demand through 2040. Other organizations, such as Carbon Tracker, project worldwide demand for oil could peak as soon as 2023.

When global oil demand will decline — and how it will affect Alberta’s economy — remains up for debate.

“It’s a really tough question for anyone to answer with any degree of precision,” Trevor Tombe, associate professor of economics at the University of Calgary, told The Narwhal, pointing toward an enormous number of macroeconomic factors that influence global oil demand.

“Even in a world of unrestricted carbon emissions, the oilsands still face huge, huge economic challenges,” Jeff Rubin, former chief economist with CIBC World Markets and a senior fellow at the Centre for International Governance Innovation, told The Narwhal. MORE

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