Pumpjacks draw oil in a canola subject close to Olds, Alta. THE CANADIAN PRESS/Jeff McIntosh
Russia’s ongoing invasion of Ukraine has introduced fossil fuels and geopolitics to the forefront of public dialogue. In an effort to evade financial sanctions, Russia has weaponized its vitality exports.
In March, President Vladimir Putin stated he expects “unfriendly” nations — people who have imposed sanctions over Russia’s conflict in Ukraine — to pay for gasoline gross sales in rubles. In Could, Russia halted gasoline provides to Poland and Bulgaria after they refused to pay in rubles. The European Union buys a good portion of its pure gasoline (40 per cent) and imported oil (27 per cent) from Russia. Some analysts have stated just a few nations, like Germany, might see a recession if gasoline from Russia have been fully minimize off.
The escalating vitality disaster has reignited calls to extend the manufacturing and export of Canadian oil and gasoline to diversify Europe’s vitality provide. Professional-bitumen suppose tanks such because the Canadian Vitality Centre and the Macdonald-Laurier Institute have made related arguments accusing opposition to pipelines as dooming western nations’ vitality safety.
Imports of pure gasoline into Europe from each pipelines and liquefied pure gasoline (LNG).
(The Related Press)
In essence, these arguments repackage the moral oil rhetoric that frames funding in bitumen as morally superior to grease from non-democratic regimes. However the important growth of bitumen infrastructure comes with financial uncertainties and contradicts Canada’s COP26 dedication to decarbonization. Furthermore, it diverts public consideration away from the inconvenient actuality that Canada and Russia are petro-states that share quite a few similarities in vitality coverage making.
Oil booms and petro-states
Political scientist Terry Lynn Karl launched the concept of a petro-state in her 1997 e-book, The Paradox of Lots: Oil Booms and Petro-States. She developed the petro-state thesis to clarify the lack of oil-exporting nations similar to Saudi Arabia and Nigeria to transform their petroleum revenues into extra steady and self-sustaining economies.
Karl’s principal perception was {that a} nation’s reliance on oil exports results in financial and political issues similar to weak financial development in manufacturing sectors, vulnerability to cost shocks, widespread social inequality, authoritarianism, corruption and so forth.
All through the primary decade of the twenty first century, hovering oil costs considerably altered the worldwide vitality demand and provide panorama. This development significantly bolstered the oil and gasoline business in nations like Canada, Norway and Russia. In response, students started to debate whether or not the petro-state thesis ought to embody them, given their growing dependence on fossil gas revenues.
Russian President Vladimir Putin at a gathering in Moscow on Could 16, 2022, shortly earlier than halting gasoline provides to Finland, after the nation refused to pay in rubles.
(Alexander Nemenov/Pool Photograph by way of AP)
For example, students famous that Russia is compelled to prioritize the vitality sector over different financial sectors as a result of affect of pure gasoline in producing export revenues and in sustaining its geopolitical affect in Europe. This ends in an financial construction that’s susceptible to vitality market volatility. In 2020, record-low oil costs imposed a hefty price on Russia, contributing to a dramatic foreign money depreciation and detrimental GDP development for the entire yr.
Overcome the petro-state curse
Students have debated the extent to which Canada will be categorized as a petro-state. In spite of everything, vitality merchandise solely account for 8.3 per cent of nationwide GDP, which is notably decrease than typical petro-states. Nonetheless, the Canadian economic system and well-known petro-state economies exhibit comparable structural vulnerabilities.
The Hebron Platform, anchored in Trinity Bay, N.L., in April 2017.
THE CANADIAN PRESS/Paul Daly
Canada’s vitality sector has struggled from declining demand, on account of the pandemic. Alberta, Saskatchewan and Newfoundland and Labrador rely closely on the vitality sector, and have been hit particularly onerous.
The resurgence of “moral oil” narratives that moralize bitumen extraction and demonize critics goal to border useful resource dependence as a part of Canadian identification. Put in another way, the bitumen business and its allies are pushing for “petro-nationalism,” which symbolically celebrates bitumen whereas obfuscating the unequal distributions of bitumen’s financial advantages and its environmental prices.
Searching for a path to net-zero
Days after Russia’s Feb. 24 invasion of Ukraine, Alberta Premier Jason Kenney tweeted, “Now if Canada actually needs to assist defang Putin, then let’s get some pipelines constructed!”
Nonetheless, constructing extra pipelines to extend the Canadian economic system’s reliance on fossil fuels will not be the one possibility. Norway, whose economic system is presently reliant on the oil and gasoline business, is a shining instance of methods to overcome the petro-state curse.
As coverage analyst Bruce Campbell has written, as an alternative of the denial, delay and division that characterizes present Canadian local weather coverage, Norway’s path to net-zero is constructed on local weather motion, shut collaboration with labour unions and NGOs and robust authorities management in amassing and redistributing vitality revenues.
Learn extra:
5 methods Norway leads and Canada lags on local weather motion
If Canada is actually involved about changing into an ethical vitality producer, then our public conversations must give attention to exploring rapid coverage actions aimed toward limiting greenhouse gasoline emissions from the vitality sector and planning for its phaseout.
Sibo Chen receives funding from Toronto Metropolitan College and Social Sciences and Humanities Analysis Council.
