| Alberta may be getting rich from sales of natural gas and oil to the U.S., but the Parkland Institute says the province is doing so at the expense of other industries, the environment and its own energy security.
A new report from the Parkland Institute, called Back to Hewers of Wood and Drawers of Water: Energy, Trade and the Demise of Petrochemicals in Alberta, suggests the province should re-examine the amount of natural gas it exports to the U.S.
The report says Alberta is rapidly running out of a conventional supply of natural gas, resulting in a shift to more unconventional extraction, such as coal-bed methane, which critics say is more environmentally damaging because it requires a larger industrial footprint. The institute also questions why so much of Alberta’s valuable natural gas is being used for oilsands production, which is increasing greenhouse gas emissions at a rapid rate, ripping up the boreal forest and using large amounts of water from the Athabasca River.
"We’re doing all this to send over half of our natural gas over the border to fuel unsustainable demand in the U.S., instead of pushing the U.S. to adopt a conservation agenda, and we’re fuelling the increased demand by incredible environmental decimation here…," says Diana Gibson, director of research at the Parkland Institute and one of the report’s authors.
"Is that how we want to drive our economy, with that kind of environmental decimation at the expense of Albertans, who suffer the environmental consequences?"
Gibson says if Alberta continues to export natural gas at current rates, the province and Canada will run out of a domestic supply.
"We are going to be forced to move back to coal in order to generate domestic electricity," she says, adding coal is a more polluting energy source than natural gas.
But Greg Stringham, vice-president of markets and fiscal policy with the Canadian Association of Petroleum Producers, says Alberta is in no danger of running out of natural gas anytime soon.
"The coal-bed methane resource itself is almost as big as the conventional resource and we’ve just started tapping it," he says. "The drilling in that just really started this year."
Stringham adds that the industry is coming up with more environmentally friendly technologies to reduce environmental damage.
The Parkland Institute report also argues that Canada should exit the North American Free Trade Agreement (NAFTA) because of a clause that requires Canada to continue to export energy at the same rate into the future.
"We’re not finding new conventional natural gas and oil and the costs of extraction of the nonconventional oil and gas in terms of tar sands and coal-bed methane are huge for us, so continuing to supply the U.S. market is at huge cost to Albertans in terms of environmental and social damage," says Gibson.
But Stringham says there’s no question that Canada is benefitting from selling energy to the U.S.
"If you didn’t have production at the same levels and we didn’t get the $9 billion to $10 billion in royalties coming from the oil and gas industry, you would need a sales tax equivalent to a 23 per cent provincial sales tax, so that benefit is being felt by every Albertan right now," says Stringham.
The report also criticizes the government for allowing too much raw natural gas to be shipped to the U.S., where it’s stripped of petrochemicals by American companies, robbing Alberta of value-added jobs.
"Those value-added products are being made south of the border in Chicago, where we’re sending our natural gas," says Gibson.
"We’re becoming more and more dependent on raw resource extraction and selling it to the U.S., which is not the kind of position that most Albertans would like to see themselves be in."
The Parkland Institute report is available on the institute’s website at www.ualberta.ca/parkland. |
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