This article originally appeared in the Calgary Herald.
By Jeff Kucharski, January 17, 2023
During his brief visit to Canada last week, Japanese Prime Minister Kishida Fumio sent a pointed message to the federal government.
Making a 24-hour stopover in Ottawa during his tour of G7 capitals, Kishida acknowledged the world is facing an energy crisis and many countries are trying to strike the balance between ensuring stable energy supplies and proceeding with de-carbonization efforts.
“And in that sense,” he said, “I am confident that Canada will play a major role, as a resource-rich country.”
The message is clear, but it still leaves a question: Is our government listening? Vladimir Putin’s invasion of Ukraine and subsequent cuts to Russian oil and gas supplies have seriously disrupted global energy markets, making access to affordable energy a political and economic priority.
Yet in response to Kishida’s plea, Prime Minister Justin Trudeau chose to focus his response on critical minerals and hydrogen, echoing a similar answer he gave to German Chancellor Olaf Scholz when he visited Canada recently. While these are promising opportunities for Canada, the reality is that they are still in the distant future. What Japan and Europe need today, and in the medium term at least, is Canada’s oil and gas.
Japan is a natural resource-poor country that relies on imports for over 85 per cent of its energy needs. Due to that heavy reliance on imported fuels, Japan received an exemption from its G7 partners on the import ban of Russian oil and gas, even as it tries to wean itself any energy dependency on Moscow. To lower its carbon emissions, Japan has been racing to restart nuclear reactors and install more renewable power, but those processes are not quickly done.
As long as it is reliant on Russian fuel, Japan is vulnerable to Moscow’s weaponization of energy. Therefore, as much as Japan wants to work with Canada on developing critical minerals and hydrogen projects, it also wants to replace Russian imports with those from a stable and reliable partner like Canada as soon as possible.
Yet despite Canada’s tremendous resource wealth, it has had a real problem finding the delicate balance between climate change and energy security. Some of the rhetoric on climate change has created the unrealistic expectation that we can leave hydrocarbon resources in the ground and almost immediately replace them with renewable energy. Such views have helped create the conditions for the energy crisis we are facing today — the Russian invasion of Ukraine has just made the situation much more urgent.
Energy in Canada has become terribly politicized — so much so that the mere mention of oil and gas exports by the prime minister is seen as contentious. Building energy export infrastructure in Canada has become controversial, time-consuming and costly. Indeed, we have fallen so far behind the United States, Australia and other resource-rich countries that many investors are no longer confident of Canada as a place to invest.
The current energy crisis in Europe has caused ripples all the way to the Indo-Pacific, where import-reliant countries like Japan are scrambling to stabilize their own energy supplies. As friends and partners, Europe and Japan expect Canada to step up and provide the energy resources required while continuing to lower emissions and transition to a clean energy economy over the coming decades. Canada can’t afford to continue to let projects get bogged down in cumbersome reviews and permit processes while the economies and security of our friends and partners are at severe risk.
Canadians need to acknowledge the hard truth that oil and gas are still going to be essential to maintaining energy security, even while we ramp up clean energy technologies. All sober scientific analysis agrees that this transition is going to take decades, so it’s time to be realistic and pragmatic and not let idealism trump the energy security needs of our friends and partners.
Global security and stability are not all that is at stake — so is Canada’s reputation and standing as a reliable partner in the world.
Jeff Kucharski is a senior fellow at the Macdonald-Laurier Institute and adjunct professor at Royal Roads University in Victoria, B.C.