Canada needs a WIN-WIN Pathway to Capitalize on Our New Energy Advantage

Harvard Business School professor Michael Porter this past Thursday at GLOBE 2016 said it’s time for Canada to get on with LNG exports to help combat climate change, both here and elsewhere. He stated Thursday that natural gas provides a way to replace higher-intensity-carbon energy such as that produced by coal plants and to meet increasing global demand for energy, which is necessary because it is going to take decades to transition to a lower-carbon energy world.

Porter, is considered a leading authority on competitiveness and economic development and has been an adviser to the U.S. government on economic policy and also an adviser in the business sector. He co-coined the phrase “shared value” and is a co-founder of the Shared Value Initiative.

Porter made some noted comparisons between the U.S.A. and Canada with respects to shale gas and hydraulic fracturing. He urged B.C. and Canada to avoid the U.S.A. approach, the “lock-in effect” which has amounted to a polarized war over fracking and threatens to derail its potential to spark the economy with investment in its new-found gas and oil energy supplies. Porter stated that polarization does not work, it’s being lazy.

Unconventional gas and oil represent perhaps the single largest source of competitive advantage and economic opportunity for Canada over the next decade or two said, Michael E. Porter. But there is a real risk that Canadian citizens, companies, and communities will fail to capitalize on this revolutionary opportunity because of distrust and misunderstanding.

Porter declared Canada needs to get on a WIN-WIN PATHWAY and provided some fact base strategic premises, including:

1. THE DEVELOPMENT OF UNCONVENTIONAL ENERGY offers an unprecedented, revolutionary and critical opportunity for increasing Canada’s competitiveness — while developing a new reputation around the world.
2. CANADA NEEDS TO EXPORT LNG. Canada exporting LNG is good for the climate here and elsewhere around the world— including China.
3. THE ENVIRONMENTAL IMPACTS OF HYDRAULIC FRACTURING can be managed cost effectively—without hindering the economic opportunity—by using known processes, and regulations; ensuring low-cost energy resources.
4. UNCONVENTIONAL NATURAL GAS is the only feasible, cost-effective way for Canada to substantially reduce greenhouse gas emissions while enabling the penetration of renewables.
5. UNCONVENTIONAL NATURAL GAS can be used to expand Canada’s economic footprint in other sectors, such as plastics.
6. CANADA COULD BE A LEADER IN ENERGY, environmental improvement, and climate change. Canada is on a different path — and could lead the U.S.A.
7. UNCONVENTIONAL NATURAL GAS presents Canada with the opportunity to be more than a resource exporter— Canada can become an innovation leader in this field.
8. THERE IS NO INHERENT TRADE-OFF between environmental protection and industry profitability— Canada can have both.

Despite these high stakes, Canada lacks a strategy to fully capitalize on this crucial opportunity. Instead, unconventional energy production is mired in political gridlock like in the U.S.A, driven by public, First Nations and stakeholder frustrations about the local community and environmental impacts of hydraulic fracturing (Porter: “fracking is viewed as a swear word”), as well as climate concerns.

Porter said it was clear to him that the pipeline war is really about fossil fuels. Environmentalists and environmentalist communities “doomsday views” only point out the problems, but to try and find ‘news worthy’ examples—  those should be the norm. He stated environmentalists are going to the extreme and focused on positioning arguments on water supply.

According to Porter, no one is winning. We are at war with ourselves, as well no business should be at war with communities. The industry is facing opposition as well as bans on hydraulic fracturing. Opposition to critical infrastructure projects has led to protracted delays in building a state of the art, safe and efficient pipelines.

Much of the debate over unconventional gas and oil is uninformed or reflects purposefully misleading arguments. The ‘facts’ advanced by all sides are frequently incomplete or taken out of context. Some stakeholders are also hung up on harnessing Canada’s energy advantage, protecting the environment, mitigating climate change, and new climate regulations. All this leads to misinformation and confusion in the general public.

To pursue this WIN-WIN pathway strategy, Canada must approach this challenge from the perspective of what’s in the national interest and where industry, NGOs, governments, First Nations and local communities can find common ground.

Stakeholders, NGOs, and the public must let go of the misconceptions, historic rivalries, and distrust that have led to zero-sum mind-sets slowed progress or interrupted critical projects. All sides need to acknowledge the legitimate concerns of other groups and First Nations while focusing on solutions based on a common fact base. The facts reveal an ample middle ground where all stakeholders can benefit from unconventional energy development in Canada.

Image Rights & Photography by Peter Helm, GeoMedia Productions