How America's friendly northern neighbor became a rogue, reckless petrostate.
For decades, the world has thought of Canada as America's friendly northern neighbor -- a responsible, earnest, if somewhat boring, land of hockey fans and single-payer health care. On the big issues, it has long played the global Boy Scout, reliably providing moral leadership on everything from ozone protection to land-mine eradication to gay rights. The late novelist Douglas Adams once quipped that if the United States often behaved like a belligerent teenage boy, Canada was an intelligent woman in her mid-30s. Basically, Canada has been the United States -- not as it is, but as it should be.
But a dark secret lurks in the northern forests. Over the last decade, Canada has not so quietly become an international mining center and a rogue petrostate. It's no longer America's better half, but a dystopian vision of the continent's energy-soaked future.
That's right: The good neighbor has banked its economy on the cursed elixir of political dysfunction -- oil. Flush with visions of becoming a global energy superpower, Canada's government has taken up with pipeline evangelists, petroleum bullies, and climate change skeptics. Turns out the Boy Scout's not just hooked on junk crude -- he's become a pusher. And that's not even the worst of it.
With oil and gas now accounting for approximately a quarter of its export revenue, Canada has lost its famous politeness. Since the Conservative Party won a majority in Parliament in 2011, the federal government has eviscerated conservationists, indigenous nations, European commissioners, and just about anyone opposing unfettered oil production as unpatriotic radicals. It has muzzled climate change scientists, killed funding for environmental science of every stripe, and in a recent pair of unprecedented omnibus bills, systematically dismantled the country's most significant long-cherished environmental laws.
The author of this transformation is Prime Minister Stephen Harper, a right-wing policy wonk and evangelical Christian with a power base in Alberta, ground zero of Canada's oil boom. Just as Margaret Thatcher funded her political makeover of Britain on revenue from North Sea oil, Harper intends to methodically rewire the entire Canadian experience with petrodollars sucked from the ground. In the process he has concentrated power in the prime minister's office and reoriented Canada's foreign priorities. Harper, who took office in 2006, increased defense spending by nearly $1 billion annually in his first four years, and he has committed $2 billion to prison expansion with a "tough on crime" policy that ignores the country's falling crime rate. Meanwhile, Canada has amassed a huge federal debt -- its highest in history at some $600 billion and counting.
Liberal critics like to say that Harper's political revolution caught many Canadians, generally a fat and apathetic people, by surprise -- a combination of self-delusion and strategic deception. That may be true, but though Canadians live in high latitudes, they're not above baser human instincts -- like greed. Harper is aggressively pushing an economic gamble on oil, the world's most volatile resource, and promising a new national wealth based on untapped riches far from where most Canadians live that will fill their pocketbooks, and those of their children, for generations. With nearly three-quarters of Canadians supporting oil sands development in a recent poll, Harper seems to be selling them on the idea.
THE RESOURCE UNDERWRITING many of these ugly behavioral changes is bitumen, a heavy, sour crude mined from oil sands. Deposits of the badly degraded asphalt-like substance lie under a forest the size of Florida in northeastern Alberta and comprise the world's third-largest petroleum reserves. Over the last decade, as oil prices increased fivefold, oil companies invested approximately $160 billion to develop bitumen in Alberta, and it has finally turned profitable. Canada is now cranking out 1.7 million barrels a day of the stuff, and scheduled production stands to fill provincial and federal government coffers with about $120 billion in rent and royalties by 2020. More than 40 percent of that haul goes directly to the federal government largely in the form of corporate taxes. And the government wants even more; it's pushing for production to hit 5 million barrels a day by 2030.
Never mind that the entire process is a messy and wasteful one. It takes copious amounts of water, capital, and energy to dig out the carbon-rich sands, let alone upgrade and process the heavy crude, which can't even move through a pipeline until it is diluted with an imported gasoline-like condensate. With brazen cheek, the government nonetheless defends the Alberta megaproject as "responsible" and "sustainable" -- "an enterprise of epic proportions, akin to the building of the pyramids or China's Great Wall. Only bigger." Bigger indeed: Approved bitumen mining projects could potentially excavate a forest area six times as large as New York City. Reclamation and reforestation remain an uncertain and costly proposition. To date, oil companies have already created enough toxic mining sludge (6 billion barrels) to flood the entirety of Washington, D.C.
Unsurprisingly, Ottawa has become a master at the cynical art of greenwashing. When Harper's ministers aren't attacking former NASA scientist and climate change canary James Hansen in the pages of the New York Times or lobbying against Europe's Fuel Quality Directive (which regards bitumen as much dirtier than conventional oil), his government has spent $100 million since 2009 on ads to convince Canadians that exporting this oil is "responsible resource development." Meanwhile, Canada has bent over backward to entice Beijing. Three state-owned Chinese oil companies (all with dismal records of corporate transparency and environmental sensitivity) have already spent more than $20 billion purchasing rights to oil sands in Alberta.
The kowtowing to China, now the world's largest oil consumer, highlights Canada's big bitumen dilemma: how to get dirty, landlocked oil to global markets. The United States, Canada's biggest customer, doesn't seem to need it as much anymore; imports declined by more than 4 million barrels a day between 2005 and 2011, and with pipeline projects to the United States like Keystone XL stuck in the mud, Harper's vision of being an "emerging energy superpower" appears in danger. Unsurprisingly, Harper has recently jettisoned criticism of China's human rights record. As a secret foreign-policy document leaked last fall to the Canadian Broadcasting Corp. (CBC) makes clear, Canada has new priorities: "To succeed we will need to pursue political relationships in tandem with economic interests even where political interests or values may not align."
In 2012, Canada quietly signed a controversial trade agreement with the People's Republic and approved a $15 billion takeover of Nexen, an oil sands player, by the state-owned China National Offshore Oil Corp. And, perhaps to warm Canadians' hearts to the Chinese, the government recently lobbied to rent two traveling pandas at a cost of $10 million over the next 10 years.
Now that oil sands mining accounts for nearly 10 percent of Canada's greenhouse gas emissions, Ottawa can't really brook any discussion of a carbon tax, though a majority of Canadians would support one. Harper described the Kyoto Protocol as "a socialist scheme" and a "job-killing, economy-destroying" accord before pulling out of the agreement altogether in 2012. Many of Canada's ministers are now die-hard skeptics even about the science behind climate change. As Natural Resources Minister Joe Oliver recently explained to the Montreal newspaper La Presse: "I think that people aren't as worried as they were before about global warming of 2 degrees.… Scientists have recently told us that our fears [on climate change] are exaggerated." To silence any would-be exaggerators, the government simply stopped funding the Canadian Foundation for Climate and Atmospheric Sciences, disbanded Environment Canada's Adaptation to Climate Change Research Group, and eliminated the role of chief science advisor. And since 2008, political minders have vetted all media requests for the country's 23,000 federal scientists.
After the government barred a federal scientist from talking about the discovery of a large Arctic ozone hole, a 2012 editorial in the influential science journal Nature demanded that the Canadian government "set its scientists free." It seems Harper heard "cut them loose" instead: His government summarily closed the world-famous Experimental Lakes Area research station, a gem of Canadian environmental science that has helped spur global policy on acid rain, to save the princely sum of $2 million a year (though the Ontario government is working to keep it open).
THE SINGLE-MINDED PURSUIT of this petroproject has stunned global analysts. The Economist, no left-wing shill, characterized Harper, the son of an Imperial Oil senior accountant, as a bully "intolerant of criticism and dissent" with a determined habit of rule-breaking. Lawrence Martin, one of Canada's most influential political commentators, says that Harper's "billy-club governance" has broken "new ground in the subverting of the democratic process." Conservative pollster Allan Gregg has described Harper's agenda as an ideological assault on evidence, facts, and reason.
To be fair, Harper's government does have a plan for climate change -- pumping the problem to the United States and/or China. Oil sands crude transported to the United States by the proposed Keystone XL pipeline, for example, could over a 50-year period increase carbon emissions by as much as 935 million metric tons relative to other crudes. And the planned $5.5 billion Northern Gateway pipeline from Alberta to the Pacific Ocean would result in up to 100 metric tons of carbon dioxide emissions a year, from extraction and production in Canada to combustion in China -- more than British Columbia's total emissions in 2009. The 2012 National Inventory Report by Environment Canada, the country's environmental department, actually boasts that Canada has partly reduced overall emission intensity in the oil sands "by exporting more crude bitumen."
All this underscores Canada's new reality: Just about any kind of rational evidence has now come under assault by a government that believes that markets -- and only markets -- hold the answers. Any act that industry regards as an obstacle to rapid mineral extraction or pipeline building has been rewritten with a Saudi-like flourish. One massive omnibus budget bill alone changed 70 pieces of legislation, gutting, for example, the Fisheries Act, which directly prohibited the destruction of aquatic-life habitats but stood in the way of the Northern Gateway pipeline, which must cross 1,000 waterways en route to the Pacific Ocean. Meanwhile, funding for Canada's iconic park system has been cut by 20 percent in what critics have called a "lobotomy." The CBC, the respected state broadcaster long scorned by Harper as an independent check on power, has suffered a series of cutbacks. The Health Council of Canada, which once ensured national health standards and innovation across Canada's 13 provinces and territories, also got the ax. Furthermore, with the élan of a Middle Eastern petroprince, Harper appointed the head of his security detail to be ambassador to Jordan. And he did it all with nary a peep from your average Canadian.
More than a decade ago, American political scientist Terry Lynn Karl crudely summed up the dysfunction of petrostates: Countries that become too dependent on oil and gas riches behave like plantation economies that rely on "an unsustainable development trajectory fueled by an exhaustible resource" whose revenue streams form "an implacable barrier to change." And that's what happened to Canada while you weren't looking. Shackled to the hubris of a leader who dreams of building a new global energy superpower, the Boy Scout is now slave to his own greed.
Jamie Lee via istockphoto