Canada's Energy

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Our nation's relationship with power systems – past, present and future – is a complicated one. We asked pollster Bruce Anderson and energy expert Ralph Torrie to help us better understand the workings of a dynamic that can range from indifference or love-hate to one of great aspiration.

By Bruce Anderson, Principal, Anderson Insight

Hardly a day goes by without energy being central in our national debate. While it's easy to imagine this is something new, energy has been at the heart of what makes Canada tick for much of our country's history.

To understand the energy debate is to recognize two of the most enduring and somewhat conflicting values of Canadians. We are highly aspirational, and yet relentlessly pragmatic.  We dream big, and we act with prudence.

When it comes to energy and the environment, Canadians feel a keen responsibility to do our part to protect the planet. But we are sometimes cautious about how far to stretch, lest our grasp fall short of our reach. We like to be among the world's leaders, but not always at the head of the pack.

Canadians have plenty of enthusiasm for creating energy out of wind, sun and waves. We also like geothermal technologies, hydrogen and biofuels. But we know that low-cost energy has given us an economy that punches above its weight, and an enviable quality of life. Our energy choices have been about finding ways to stay warm, to travel and move products great distances, to fuel industries like steel making, auto manufacturing, mining, fishing and farming. We sought energy we could afford, and approaches we could make work at the scale we needed.

Coal and hydroelectricity became a foundation that allowed our economy to take root, attract investment and create jobs. Discoveries of conventional oil and gas added powerful new ways to meet domestic needs and begin building export markets with massive revenue potential.

The promise of nuclear energy was also embraced by Canada, albeit at a slower pace than that in other parts of the world, where coal, oil, gas and hydro were less plentiful.
Our pursuit of nuclear has reflected a blend of optimism and caution: without conclusive answers to safety concerns, the public has been wary to see expansion of nuclear power, and governments have mirrored that hesitation.

Some of the decisions Canada has made about energy development in the last 150 years involved testy public debates. But the choices about our future seem to be even more vigorously debated.

This is because of the confluence of several powerful trends.

First, despite advances in energy conservation, most consumers are using more energy, not less. Smartphones, tablets, hybrids and many other devices that are part of modern life are putting rising pressures on our energy grid.

As demand rises, governments and utilities are expected to ensure we have what we need. That means adding new capacity, which can be controversial or costly, or both.

Second, consumers and businesses dislike paying more for energy, and can punish governments that mistake affection for renewables with a desire to pay much more for something that is an essential. Businesses are increasingly footloose, and affordable energy has always been one of the things that Canada could count on to attract and hold investment.

Governments can choose to spend public money or build up public debt to subsidize new forms of energy, but once again, the public desire for cleaner energy is also tethered to a powerful instinct to manage our future tax and debt burden with care.

The third critical trend affecting our energy landscape has been modern environmentalism. Like people pretty much everywhere else in the world, Canadians have expressed rising concern about the pressures being put on the planet. This includes a broad concern about climate change and carbon emissions. But for many people, concerns about air, water and landscape impacts are every bit as topical.

When it comes to energy from Canada's oil sands, most Canadians believe it is feasible to extract this energy with an acceptable environmental impact, and as a result, that this is the right path for the country. That is by no means a licence without conditions. But when the public believes that producers are working to reduce greenhouse gas emissions, protect water quality and reclaim land, and that governments are providing necessary scrutiny and sanctions, the public consensus in favour of continued development is broad.

Whether the energy comes from oil, gas, coal, hydro or nuclear facilities, we demand public safety and expect efforts to reduce the impact of our energy use on the Earth. Our support for newer energy sources also comes with conditions. Canadians do not support a blank cheque approach to subsidizing greener energy, and we are skeptical of ideas that seem too perfect: hesitation about agricultural biofuels has been evident for many years, as an example.

Throughout our nation's history, Canadians have shown a persistent openness to try new approaches, an instinct to think we can and should find better ways of doing things, including developing and using energy. And, in many ways, our success at building one of the strongest economies in the world has been a function of marrying that restless desire to do better, with a relentless focus on solutions that work.  This balance is unlikely to change anytime soon. 

Bruce Anderson is one of Canada's most experienced research professionals. He began working as a research consultant with Decima Research in 1983 and became President in 1989, at the age of 32.

Anderson now heads Anderson Insight, a consulting boutique that provides public opinion/market research and advice. He is one of Canada's leading commentators on trends in public opinion and politics. He is a regular member of CBC National's At Issue panel, and writes a blog for The Globe and Mail.

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By Ralph Torrie, President, Torrie Smith Associates

Will the price of gas get to the point where it begins to cramp our lifestyles? Will the natural gas we depend on be there for our grandchildren or their children? How long could we cope if the power went out and didn't come back on? Are we approaching a tipping point in the balance between our fuel and electricity consumption and the environmental damage it causes?

These questions lurk in the back of our minds, but most of the time we are content not to have to think about where our energy comes from, or where it will come from in the future. We make a hot drink or grab a cold one from the fridge, heat up a snack in the microwave, flick a light switch, click the remote control and settle in to an evening of entertainment in the comfort of our centrally heated and air-conditioned homes.

But all that comfort and convenience doesn't just happen by chance. Our daily use of fuels and electricity is the tip of a very large "iceberg," an enormous system of technological, business, financial, institutional and political infrastructure that has been built up over 150 years, so that we can squeeze the handle, "fill 'er up" and drive on. That energy system is changing, and it is changing us. We can ill afford to take it for granted.

Of course, it is impossible to predict the future of such a complex system, but we can identify and understand some of the key factors at work:

"This tail has a dog" 

The fuel and electricity industry represents about seven per cent of our national economy – big, but not that big.

The demand for energy is largely determined by decisions and behaviours that are made in the other The demand for energy is largely determined by decisions and behaviours that are made in the other 93 per cent of the economy. From urban planning to housing preferences, from product development strategies to supply chain management, decisions and choices are made in which energy costs are relatively small or even non-existent influences, but which nevertheless have long-lasting implications for how much fuel and electricity we will need in the future. We can go a long way to securing our energy future by improving our understanding of the energy implications of design choices, settlement patterns, supply chain alternatives, investment strategies and even financial policies.

Globalization

Innovations travel rapidly around the world, and Canadians could find themselves buyers rather than sellers in the burgeoning clean technology market. Our low energy prices do not help in this regard, as the pressure to innovate is higher where fuel and electricity are more expensive, like in Europe, or in countries like China where the economic development imperative requires maximizing the utility from every drop of oil burned.

King Kilowatt

Electricity is the champagne of energy. We already pay much more per unit of energy for electricity than we do for other energy forms because we value its versatility, its cleanliness (at least at the point where it is used), and its unique compatibility with the information processing technologies that are defining the age we live in.

We would be lost without electricity, even though less than 15 per cent of all the end use applications of energy necessarily require electricity (e.g. lighting, small motors, telecommunications, information processing). But the grid is antiquated, rooted in 100-year-old technologies and predicated on the one way flow of power from centralized power plants to final consumers.

This is changing fast now, and the "smart" electricity grid of the future will support a high degree of interconnectivity and multidirectional flows of energy and information to manage a wide range of new and conventional supply sources, new applications like the electric car, flexible demands, micro grids, and energy storage technologies and techniques.
 
Climate change

This is the mother of all wild cards when considering the future of our energy system. The production and consumption of fossil fuels is a primary driver of the acceleration of the global warming that threatens civilization as we know it. A concerted effort to reduce greenhouse gas emissions would have a transformative effect on the energy system. Technologies for using energy – from buildings to trucks, photocopiers to factories – would become much more efficient. Renewable electricity would grow even faster than it has been, and there would be renewed interest in the sustainable use of Canada's biomass resources for energy, particularly for liquid transport fuels.

It is difficult to make predictions, especially about the future, and this is particularly true of our energy future. The future is not for predicting, but for the making of it. There are abundant opportunities for building a healthy, clean and safe energy system for a prosperous Canada in a technologically advanced and ecologically sustainable world. Energy literacy opens our eyes to these opportunities. 

Ralph Torrie is one of Canada's leading energy system experts and has a special interest in the threats and opportunities presented by the coming global energy transition and the climate change imperative.

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