Is Energy Development Incompatible with Democracy?

Posted on Friday, November 6, 2015

Author: Monica Gattinger

Chair, Positive Energy
Director, Institute for Science, Society and Policy 

The author surveys the challenges associated with developing energy resources in a democracy and how western industrialized democracies like Canada with large resource bases need to 'do energy’ differently.

When President Obama announced his administration would reject the Keystone XL pipeline, it ignited another round of hysteria among energy and climate-watchers in Canada and the US. Keystone supporters took it as a slap in the face. Multiple US government studies determined the project would not have an appreciable impact on GHG emissions – whether the project was approved or not, oil from the oilsands would find its way to markets. Keystone opponents hailed it a victory in the fight against global climate change. Here was a US President, of all people, calling Canada’s oilsands ‘dirty oil’ and rejecting the project as not in America’s national interest.

In reality, the hysteria was unwarranted on both sides. Those US studies are right: oil from the oilsands will find its way to US and domestic markets by other means. Chief among these are rail, which, ironically, is less safe, more expensive and more GHG intensive than pipelines, and pipeline expansions elsewhere in the US, like Enbridge’s expanded mainline system, which, incidentally, was approved without all of the hand waving. 

The Keystone XL project became a powerful symbol – arguably the symbol – for governments to act on climate change. That it is one pipeline in a network of almost a million kilometres of pipe in Canada and the US, and only one of some seventy-five crossing the border, became irrelevant. 

Could the Harper government have handled it differently? Definitely. Would it have made a difference to the outcome? Unlikely.

For good or ill, we are in a brave new world of energy development. It used to be that democracies had a competitive advantage when it came to business investment. Companies can count on the rule of law, stable political regimes and strong regulatory institutions in democracies. Now, firms talk about ‘democratic risk’ when it comes to resource development.

There are multiple veto points in democracies for project approval and construction. Getting a project approved – much less built – is taking longer and longer, and becoming ever more expensive. Just ask TransCanada. 

But it would be wrong to think this is solely a challenge for fossil fuels. Renewable energy faces these trials as well. Think wind farms in Ontario, BC Hydro’s Site C dam, or Hydro Québec’s Northern Pass project. Politicians, facing their own short term electoral imperatives, often whither in the face of opposition.

Obviously, this is not to suggest democracy is undesirable. But developing energy resources in a democracy with a large resource base poses particular challenges. 

Canada is on the bleeding edge of this issue. 

The country has the largest oil reserves of any western industrialized democracy on the planet. It also has sizable gas reserves, hydroelectricity potential, uranium deposits and more. In all cases, Canada is one of a very small number of top resource holders who are also western industrialized democracies. 

 Canada also has strong and vocal indigenous communities, with multiple court cases confirming and expanding their rights and title. And the country doesn’t have a great track record when it comes to intergovernmental collaboration on energy. Add to this surveys showing the general population and decision-makers have relatively limited energy literacy, and the stage is set for explosive energy conflict.

The question for Canada and for the new federal government in Ottawa, is how do we go from bleeding edge to leading edge of this challenge?

Like it or lump it, Canada’s energy system, like that of all major economies, is majority reliant on fossil fuels. In the absence of seriously destabilizing policy measures or step change technological developments, this is likely to remain the case for the foreseeable future. 

But this is no excuse for complacency. Canada needs to do energy differently. In a democracy, both process and substance matter. The new federal government’s placed high priority on climate change, working with the provinces and improving relations with Indigenous peoples. 

This is a very good start, and in line with Canadians’ expectations. A Nanos poll commissioned by the University of Ottawa’s Positive Energy project shows that Canadians want to develop Canada’s renewable and fossil fuel resources, but are looking for federal leadership on energy and climate, want to see the country transition towards a cleaner energy future, and want the benefits of energy development to be shared more broadly throughout the country. All told, pretty democratic sounding stuff. 

For the federal government, there is a real opportunity to engage Canadians in moving from the bleeding edge to the leading edge of the energy/democracy challenge. Here’s hoping they take it. 

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