The Globe and Mail reports that Prime Minister Trudeau will soon reveal how the government plans to support the oil and gas industry. This is an agreement he made with the premier of Alberta. It will likely include the continued commitment to building theTransmountain Pipeline and the Coastal Gas Pipeline. This policy also has the support of the NDP In Alberta and British Columbia. the Globe reports that the figure is in the$ billions.
This comes at a time when the oil and gas industries are facing major difficulties.OPEC and Russia were unable to reach an agreement to restrict production of oil. They agreed instead to let the market determine the price of oil. With the oversupply of oil on the market the price of sweet oil soon dropped to less than $30 per barrel withWTI as low as$20 At the same time the price for oil from the tar sands in Alberta took a steep drop to around $5 per barrel. No company can make a profit in the oil industry at this level of price. Russia wants to re-establish the cartel .However, current world production capacity exceeds regular world consumption by 20 per cent
The natural gas industry is even more stressed these days. There is virtually no market for natural gas anywhere. It can only be produced at a loss. There is no possibility for expansion because renewable energy is now cheaper
This reality means it is highly unlikely that either the Transmountain Pipeline or the natural gas pipeline, if built, will ever be able to turn a profit. Given these facts it is outrageous that the federal government will be giving the industry large financial subsidies. This is an ideal time shift to a new energy based on electricity rather than fossil fuels. This is what we need to do as our part in the world wide struggle against climate change.
I am struck by the fact that our First Nation communities in Alberta and B.C. are only given one choice if they want to escape poverty, deprivation and jail time; they have to opt to work in the stinking oil industry which poisons everything in its path.Of course this doesn't have to be the case.
There is an alternative
Our Governments have the capacity to do this. We saw during the thousand and eight economic crisis what governments can do. For example, the Obama administration and the Federal Reserve created around $3.4 trillion in order to bail out the banks and other financial institutions. They held nonperforming mortgages. Why not create a special fund for housing; It would include construction of all necessary supporting services. Why not create companies to rebuild and retrofit existing buildings.We have to move from an economy based on fossil fuel energy to one that is based on electrical energy from sun and wind. Why not create a fund to assist in this development.
We need a new transportation system, one based on electricity rather than fossil fuels.
We can import cars, trucks, buses and trains from China which leads the world in this development; But we can build them on our own. We once had a vibrant auto industry in Canada. But that was before the free-trade agreements. When the industry began to move out of Canada to the United States and Mexico we had little we could do. We did not own or control the industry.
Remember what our government did in our last great crisis. During World War II the Canadian government created many Crown corporations in the general economy. We can do that again. We are facing a major crisis with climate change. Crown corporations would give a our government more control and help democratize the economy.
At one time Canada also had a vibrant aircraft industry. The larger plants were British and American. But during World War II one of Canada's major contributions to the war in Europe was the Lancaster bomber which was designed and built by a Crown corporation.This industry was mostly abandoned when Canada signed the Defence Production Sharing Agreement with the United States.
Now we are waiting for the delivery from the United States of 88 F- 35 fighter-bombers from Lockheed Martin. This will cost taxpayers of Canada $19 billion. It is time to say enough is enough. We have no intention of bombing anybody. The last time we did this, under NATO, was in Libya. That turned out well, Eh? We don't need fighter-bombers we need water bombers and helicopters which also drop water. We need search and rescue helicopters. We need a fleet of ships to patrol our share of the Arctic Ocean. We can do this via a few Crown corporations.
