Dirty Thirties, Dirty Oil; Die or Diversify

It was a strange coincidence that in my Science class yesterday I was teaching my Grade 7 students about the agriculture industry in the Dirty Thirties the same day U.S. President Obama nixed a major oil export project.

I was describing to these students how the agriculture industry killed the agriculture industry.  Farmers sought to turn more soil to produce more food, and in doing so loosened up too much, leaving soil very susceptible to erosion.  This eventually caused the agriculture industry to collapse, and the entire economy that was dependent on that single industry collapsed with it, hence the name “Dirty Thirties”.  With no backup industry to help it recover until the arrival of another war, recovery was a painfully long road.

Of course this is an oversimplification, but the lesson was supposed to be direct and to a point.  It occurred to me that we were seeing that exact same issue today, but the industry isn’t agriculture.  It’s oil.

Keystone XL is a pipeline project that was intended to pump oil from the Alberta oilsands to the U.S. for processing.  This oil is currently being transported by rail, an obviously dangerous prospect.  Today, U.S. President Obama not only rejected the project, he rebuked what he called “dirty oil”.

Immediately pundits from around North America belaboured that “dirty oil” phrase, including Alberta Premier Rachel Notley.  They are certainly right that Alberta’s oilsands are not, as characterized by many U.S. officials and celebrities, the “dirtiest oil on the planet”.  Certainly the pipeline would be environmentally safer, and exceptionally so, than rail transport.  But that is now entirely beside the point.

The true point is that in one very public announcement, President Obama has set the stage for a shift in major industries.  The oil industry is not the way of the future anymore.  This has been suggested for a while now, but Obama’s announcement was basically the same as ordering the oil industry’s coffin.

If Alberta isn’t careful, it’s headed for another Dirty Thirties.  Any region whose economy depends on oil as its main industry with no other independent industry capable of carrying it through the oil industry’s collapse is in for a major coma.  It is not a case of “if”.  It is a case of “when”.  And with Obama’s announcement, “when” just got a whole lot closer.

Meanwhile conservatives both North and South of the 49th parallel are indignantly crying over whose fault it is.  They defiantly defend their economic baby.  The fight is not over, cry Republicans, calling Democrats tone-deaf on the issue.  It’s Canada’s new Liberal Prime Minister Justin Trudeau’s fault for pulling out of Syria, cries top Canadian Conservatives.  TransCanada (the company behind Keystone XL) is considering reapplying.  Notley talks about engaging in other projects that will get oil exported elsewhere, and distracts by talking about climate change (an important consideration, but still misses the point).  Few are actually talking about the elephant in the room.

That elephant is that oil is dying.  In Alberta, there is no new generational industry to take up its mantle.  We’re risking “dirty oil” becoming Alberta’s reprise of the Dirty Thirties.

Suddenly the introduction of the new Economic Diversification Ministry in Alberta is not only important, it is necessary to ensure our economy does not end up on life support.  I'm curious to see what that next industry is.  Clean energy?  Agriculture?

Don’t get me wrong, I’m exceptionally disappointed with Obama’s announcement.  Oil is already on its way to the U.S., Keystone XL would have made that journey far safer.  And our world is based on oil right now.  We can’t buy the future at the expense of the present.

However, it would be worse to ignore the future altogether.

It's official.  The world is changing.  Is Alberta ready to change with it?

If we aren't, when will we wake up from the coma?