The correlation between energy consumption and standard of living is nearly perfect. Indeed, every man-made object currently surrounding you is really just a form of transformed energy. Raw materials were harvested or extracted using equipment powered by energy. These materials were then transformed into usable products using energy and transported to their current location using energy. Less energy means less “stuff”. Hence, it’s no surprise that per capita electricity consumption in sub-Saharan Africa is a tiny fraction of that in the United States or Canada. We like having stuff.
Our modern energy systems are complex. They have evolved over decades to meet market demand stemming from economic growth and technological progress. Whether it is putting gas in our cars, using natural gas to heat our homes during a cold Canadian winter, or powering our wifi with electricity, we expect energy in all forms to be reliable, available, and affordable.
Discarding an established and functional energy-delivery system and replacing it in a few short years with something completely new in order to achieve “net zero” is fraught with risk and enormous expense. This is not well appreciated among the voting public, who have been fed a steady diet of climate catastrophism and simplified solution narratives for many years by energy-illiterate politicians and environmentalists. That explains why a majority of Canadians worry about climate change yet are unwilling to pay anything to address it. It also explains the fiction that a carbon tax can disincentivize energy use yet be a net benefit to taxpayers—a free lunch! Disclosure of the true costs and risks of radically re-making such a fundamental part of the Canadian economy could be hazardous to the longevity of a sitting government.
Will citizens tolerate enormous reductions to their quality of life—reduced reliability, availability, and affordability of energy, (i.e. a lot less stuff)—in order to accommodate net zero? It seems the federal government believes that the citizens of Canada will as long as the pain, for now, is targeted at Alberta and Saskatchewan, where electoral prospects for Liberals are dim and fading anyway.
Which brings us to the recent announcements concerning Canada’s clean electricity regulations. In announcing that they expects to reach net zero in a mere twelve years, the Liberals have placed environmental zealotry squarely ahead of the welfare of its Western citizens while possibly fomenting a constitutional crisis and, eventually perhaps, letting people freeze in the dark.
Once again, they make it sound easy. Their analysis even makes the preposterous claim that electricity demand will drop because the world will become cooler and we’ll need less air conditioning. This conclusion ignores that Canada contributes a barely significant 2 percent to global carbon dioxide emissions and all credible analysts expect global fossil fuel demand to continue to grow well past the time when Canada reaches net zero. It’s a triumph of ideology over reality.
If you live in Ontario, Quebec, or BC, which have electricity grids largely powered by hydro and nuclear, the clean electricity standards may not be too disruptive. In Alberta and Saskatchewan, however, where the grid is largely powered by natural gas, the situation is much different. A sudden shift to eliminate natural gas presents tremendous risk. Wind and solar are both intermittent, energy storage technology is nowhere near the point where it can back up large populations for meaningful time horizons and renewables have disturbing externalities concerning visual blight, effects on wildlife, and end-of-life disposal. Since we expect the light to turn on when we flick the switch, our modern grid demands that renewables need to be backed up with stable, dispatchable power sources. Someday that might mean nuclear or large-scale energy storage, but in provinces without substantial hydro resources, for the time being that means natural gas.
Interestingly, in most respects Alberta has been the Canadian leader in the adoption of cleaner energy sources in recent years. Seven years ago, over half of Alberta’s power was coal-fired. Last year the proportion had dropped to 17 percent and is on its way to zero. At the same time, Alberta has led the adoption of wind and solar installation, growing to 12 percent and 2 percent, respectively, of the net to grid generation in 2022, and is forecast to rise eight-fold in the next few years.
At that rate, the installed capacity of renewables would dominate the grid, yet such a rapid change may affect the economics of dispatchable baseload power (i.e. natural gas) which will still be required for when the wind doesn’t blow and the sun doesn’t shine. Alberta is Canada’s only de-regulated electricity market and that’s a big shift; this may explain the recent pause implemented by the UCP.
Of course, if we have learned anything over the past few years in energy markets, it is that you can’t build a modern industrial economy purely on renewables. Germany tried. Their “Energiewiend” program cost hundreds of billions of euros and yet has left the country dependent upon imported liquified natural gas and coal for most of their electricity needs. It has resulted in skyrocketing power prices and reduced economic output. We see references to German “de-industrialization” as large industries de-camp to foreign jurisdictions with better energy regimes. Germany should be a cautionary tale, not a road map.
While the plight of Canada’s prairie provinces has never been of particular concern to this federal government, it is still possible for it to slow down, consult, and empower its Western partners in their efforts to hasten the adoption of cleaner energy sources while maintaining, to the extent we can, both our standards of living and our economic output. The alternative—moving forward with no regard for risk, cost, or the hardship that will predictably follow—is not a viable solution.
Measured, cool patience, though, may be a big ask of an environmentally zealous government burning with net zero ambitions. But, unfortunately for the rest of us, you can’t warm your home with an idealogue’s fire.
