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Labour + Industry

Alberta Workers See Their Future. Denial Blocks the View

The province’s workers have a plan for the global energy transition. Premier Smith offers only fear and spin.

Gil McGowan 3 Sep 2023The Tyee

Gil McGowan is the president of the Alberta Federation of Labour, representing 175,000 unionized Alberta workers from both the public and private sectors.

On this Labour Day long weekend, who do you think is standing up for the best interests of Alberta workers?

Is it Premier Danielle Smith, who suggests that anyone who questions the future of oil and gas in the province is essentially betraying workers?

Or is it people like me, the president of Alberta’s largest worker advocacy group, who say workers in our province would be better served if we prepare ourselves for change instead of burying our heads in the sand?

This became a public question last week when Premier Smith decided to release a letter that I had written to her, along with her four-page reply.

My letter added the voices of the 175,000 unionized Alberta workers I represent to the growing chorus of individuals and groups calling on her United Conservative Party government to rescind their ill-advised six-month moratorium on renewable energy projects.

In my letter, I argued that the moratorium is “undermining a thriving home-grown industry, killing jobs and turning our province into an investment pariah.” It’s basically the same point that’s being made forcefully by many of my fellow Albertans — including academics, media pundits, labour and municipal leaders, businesspeople and ordinary citizens.

In fact, one think tank has suggested that the moratorium is jeopardizing 118 projects worth $33 billion — projects which could create as many as 24,000 jobs for Albertans.

In her reply to my letter, Smith professed to being shocked that I was “cheerleading the demise of Alberta’s oil and gas industry.”

Of course, I did nothing of the sort. I simply pointed out that many credible forecasting agencies foresee a time in the not-so-distant future when global demand for oil will plateau and start to decline.

In particular, I shared a link to a recent study prepared by the Calgary-based Canada Energy Regulator (hardly a radical environmental group) which concludes that demand for oil produced in Alberta could collapse in coming years as the world scrambles to address climate change.

Given that the oil and gas industry has been one of the main engines for economic activity and jobs creation in Alberta for decades, I argued that “our governments, and political leaders at all levels, owe a duty to the workers of this province to think deeply about the change that is rapidly unfolding around us and plan for it.”

I then challenged her to answer the following question: “in an oil and gas producing jurisdiction like ours, where will our future jobs and prosperity come from as the world accelerates the process of moving away from fossil fuels?”

Smith’s reply was telling: “Alberta has no intention of moving away from the energy industry.”

This statement illustrates a fundamental flaw (some might say a deliberate lie) that sits at the heart of the political strategy being employed by both the UCP and the federal Conservatives: they are suggesting to Albertans and Canadians that the global energy transition is optional; a choice that we can simply "opt out of" by electing the right (read conservative) politicians.

Nothing could be further from the truth. We can’t "opt out" of the global energy transition. It’s happening whether we like it or not.

Global demand will be determined in other countries and other capitals, not in Edmonton or Ottawa. And after this summer of heat waves, wildfires, floods, extreme weather, war and oil-price-related inflation, the pace of the transition is likely to accelerate, rather than slow down, as country after country around the world realizes that more aggressive action on climate change is necessary to safeguard both their citizens and their economies.

With all of this in mind, when it comes to the global energy transition, the only choice we really have is how we react to it. We can prepare to seize some of the many opportunities associated with what is shaping up to be the biggest economic paradigm shift since the Industrial Revolution. Or we can delay and deny — and be left behind as the world moves forward without us.

So, how should our governments in Edmonton and Ottawa defend the interests of Alberta workers whose prosperity has been so closely tied to an industry that will almost certainly soon lose its dominance in an increasingly electrified world?

We in the Alberta labour movement have ideas — solutions that have already been proven to work.

Over the past two years, the Alberta Federation of Labour and a coalition of unions representing Albertans working in construction, manufacturing, industrial maintenance and oil and gas have done the work that politicians like Danielle Smith and Pierre Poilievre have so far refused to do — we developed an industrial blueprint aimed at ensuring prosperity for Albertans in a changing world.

Our report, entitled "Skate to Where the Puck Is Going," outlines opportunities in areas like hydrogen, critical minerals, electricity, housing, transportation, building retrofits and renewable energy. It also offers suggestions about how to secure a future for our oil and gas sector in a decarbonizing world — specifically by helping them pivot towards producing feedstocks for materials (e.g. carbon fibre and petrochemicals) as opposed to feedstocks for fuels.

Our economic modelling suggests that our approach could create more than 200,000 jobs for Albertans.

As I pointed out in my letter to Smith, what we’re proposing in the report is similar to what the Biden administration is currently doing south of the border: using government-led industrial policy to pivot the American economy towards new paths for prosperity in a world that needs to reduce emissions.

After just one year, Biden’s industrial policy (anchored by the now famous Inflation Reduction Act), has been a huge success, creating hundreds of thousands of jobs and leveraging hundreds of billions of dollars in investment. My question for Smith was simple: “how can we justify not following suit?”

So, this Labour Day, when you hear Danielle Smith claiming that she’s standing up for “our” oil gas industry remember these three points.

First, it’s not really ours — the Alberta public may own the resource (that’s why former premier Peter Lougheed urged us to “think like owners”), but the industry itself is owned mostly by investors who don’t live in Alberta and who don’t really care what happens to Alberta workers. They’re looking after themselves, not us — something we should keep in mind when considering their policy preferences and statements. What’s good for oil and gas (like having the public pick up their tab for cleaning up orphan wells and tailings ponds) is NOT necessarily what’s good for Alberta or Alberta workers.

Second, like it our not, oil and gas will almost certainly never be the engine for economic growth and job creation it once was. The number of people employed directly in the sector is already down by about 40,000 since 2014, as companies chose automation over workers and stock buybacks and dividend increases over reinvestment.

And there’s little hope of change. Our biggest oilsands company, Suncor, laid off 1,500 people after recording both record profits and record production numbers. We can expect the same from most of our other big oilsands companies. This is an industry that demands loyalty from workers, but offers little or none in return.

Third, and finally, while it may not have arrived just yet, the decline in oil demand is coming. Even China, which conservatives often point to as the great hope for maintaining oil demand, recently announced that they expect to hit peak demand for gasoline this year and diesel next year — all because of their rapid and accelerating switch to electric vehicles.

People like Danielle Smith are basically saying that we should bet against humanity succeeding in its efforts to address climate — that’s the only way her confident predictions about growing oil demand could come true. Not only is this an immoral foundation upon which to build an economy; it’s wrong. The switch to decarbonizing global power grids is well underway and the electrification of our transportation systems is picking up steam. As I said in my letter to Smith “a province of four million people can’t hold back the tides of global change. Either we prepare for change or get run over by it.”

Ironically, the actions of big oil companies themselves suggest that they see the writing on the wall. Even as the world suffered through unprecedented heat waves, floods and extreme weather this summer (which experts concluded were all clearly related to climate change) companies like Shell, BP and Suncor dropped all pretenses about reducing emissions and said they would focus instead on increasing production.

Are these the actions of an industry that thinks it has a long-term future? Or are they the actions of an industry that has decided that the best strategy for their well-heeled investors is to extract as much profit as possible before the music stops? And are politicians like Daneille Smith really serving the citizens who elected them, or are they simply providing political cover for Big Oil as they liquidate their assets?

It is in this context that I return to my opening question.

On this Labour Day long weekend, who do you think is really standing up for the best interests of Alberta workers: those off us who want to seize the opportunities and potential for jobs and prosperity associated with the unfolding global energy transition: or the premier I’ve dubbed #DenialSmith?

Dear reader, I’ll let you be the judge.  [Tyee]

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