Has fracking made BC a petro state?

My thesis is published!! OK, so it was published a couple of weeks ago, but what with all the moving countries I didn’t get much more time to harp on about other than quick social media plugs. You’ve heard me harp on about fracking a lot though, so instead I want to touch on lessons I learned a while ago in a Tyee Masterclass with Andrew Nikiforuk about the “petro states”, and how BC may be becoming one.

Tyee seriesNikiforuk’s class was officially titled “Analyzing the energy sector without being taken captive,” but first he gave a whistle-stop tour of some of the relevant background. What he talked about was a mind-blowing revelation to me.

Now, I’ve had my mind blown in the past, and am well aware of the phenomenon of being totally taken in by something, only to later realise the true complexities. For example, I used to think that public understanding of science was the panacea for acceptance of science, e.g. in climate change or GMOs. But more scientific knowledge does not necessarily mean acceptance or action on these issues. Humans are more complicated than that.

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Nikiforuk began by showing some figures for petro states, apparently rich in fuel resources, but overwhelmingly facing budget deficits. Texas, Nigeria, Russia, and neighbours Alberta, proud owners of the oil sands. He showed graphs of petro states’ volatile economics; spending money when they have it, unable to pay the bills when they don’t. The culture of spending is binging and purging.

These were facts and figures, but Nikiforuk’s underlying political conclusion was, in a nutshell, this: more money from fossil fuels = less taxation = lazier democracy.

If you’ve seen ads for the Enbridge’s Northern Gateway pipeline, you can see the un-subtle message that oil (pipeline) money will help build schools and infrastructure, a common mission of extractive corporations that dominate small towns. We will fund community projects. Which sounds great, but, says Nikiforuk, here’s the rub: the more money the company puts into these projects, the less tax money is needed to pay for them. Double-bonus: less taxes for the people too!

Image from Enbridge’s Northern Gateway: A Path to Prosperity TV commercial. Ugh.

But, it’s that old adage, “taxation without representation” turns on its head: “without taxation, there is no representation.” Petro can create an easy life for you, you can reap the rewards of schools and swimming pools and low taxes, what could be wrong with that? But you didn’t vote for that. Public accountability and opportunity for protest falls – all until the oil price drops. Accountability and transparency is already waning in BC with regards to natural gas – well water extractions and emissions are poorly reported.

Nikiforuk makes a point of saying this is not motivated by a particular political ideology – rather that the politics becomes protecting the revenue stream, whatever the political stripe. If the NDP had won the recent BC election, despite their environmental reputation, they would still have found the fracking money too good to resist.

Norway is of course different, by managing not to binge on the profits. However, the state-owned Norwegian oil company StatOil also invests in projects across the world – including in the oil sands. Environmental groups had hoped this would bring a more considered perspective on enviro issues, but it seems it’s more of a case of “when in Rome.”

The reason for Andrew Nikiforuk giving this presentation is his unparalleled history of reporting on the industry in Canada, particularly in Alberta and BC. “I have never encountered an industry that all sings form the same hymn book so loudly or so uniformly,” he said. But, he also said that while talking to members of the Canadian Association of Petroleum Producers, he had “never met so many people who want to talk off-record about the issues.”

British Columbia is in a transition moment. Of over 100+ projects that have been proposed in the Albertan oil sands since 1998, not one has been rejected. But companies like Enbridge got somewhat of a shock when they tried to push through the Northern Gateway pipeline in BC – there isn’t the same history of compliance, and protest still boils.

But BC could easily go the same way if it takes its eyes off the ball. In Fort Nelson I noticed each natural gas company’s office I ventured into had a pin board of “community involvement.”

Nikiforuk went on to describe “regulatory capture” – industry effectively capturing government to foster private goals. Regulation would strangle the golden goose; governments would rather facilitate development.

Perhaps that’s in part why BC’s regulatory framework hasn’t kept up with the pace of shale gas development, and we’re left with loopholes that allow companies to extract unmonitored quantities of water from unknown capacities of water bodies.

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Briefly (condensing 5 pages of notes), that’s what I “learned” and mused from the backgrounder given by Nikiforuk. I put “learned” in inverted commas because I clearly got one view on the matter, and its not something I’ve investigated well enough myself. But I found it interesting and thought-provoking, and a direction from which to view and assess new stories in the ever-complex and enthralling field of energy!

 

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