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Oil market woes

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Last week, the USA and China announced they would be setting aggressive greenhouse-gas reduction targets, with both countries promising to taper emissions significantly in the coming decades.

Say what you want about who is getting the better deal and the probability of either country reaching these goals, this deal is still important. It’s a powerful signal that the world’s two biggest economies—and polluters—are standing up together to say that climate disruption is real and it’s a problem that can’t be ignored.

This puts Ottawa in an awkward spot. The federal government has a reputation for silencing our scientists, gutting environmental regulations and promoting the oilsands as our main economic driver. This gamble made economic sense since our thirsty global partners were keen to burn our crude.

But what if demand plummets? Oil prices are at a four-year low thanks to a glut in American and Saudi production and lower global consumption, especially in China and the Eurozone. This dip is projected to knock billions from our government bank accounts. A world that pledges to reduce its carbon footprint is a world that moves away from fossil fuels.

This deal also makes our push for long-term petro infrastructure look shortsighted. Do multi-billion-dollar, multi-decade pipelines to the United States or our pristine West Coast to export to China make much sense when both countries want to transition to renewables?

The future of Alberta crude looks pretty bleak, especially when you consider the European Union agreed last month to slash GHG emissions to 40-percent below 1990 levels by 2030. Even if Canada refuses to act meaningfully on climate disruption, the global market already has.

Cold, hard trade realities will force us to adapt our economy away from oilsands. Either we can be intelligent and invest in renewables and other clean technology, or be a sad footnote as the world moves on without us

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