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The wasted pursuit of social licence for oil exploration

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For several decades, Canada was the focus of a global attack on its natural resource economy, with its oil sands deposits (the world’s third-largest oil reserve) ranked as public enemy number one.

Though only a tiny contributor to global greenhouse gas emissions (about 1.6 per cent of the total), the oil sands were seen as problematic. Production was particularly greenhouse-gas-intensive and therefore, development of the oil sands would be particularly onerous from the perspective of people worried about climate change.

Canada worked hard to bring down the emission intensity of oil sands development, thinking to save its social licence to operate, to get it out of the international crosshairs of disapprobation.

But on Jan. 20, U.S. President Joe Biden – ironically, the favourite of most Canadians in the 2020 presidential election – showed just how much social licence Canada had purchased with its efforts to bring its oil sands emission intensity into line with such producers as Saudi Arabia, Russia and the United States.

With great fanfare, Biden made it his priority to kill the Keystone XL pipeline, the last great hope left if Canada were to realize the economic value latent in its huge petroleum reserves. Rest in peace – the concept of social licence, born 1997, died in 2021.

However, recent events suggest that Canada ought not to feel badly about having failed to attain social licence for oil sands production, sale and transport. That’s because the idea of social licence was spurious to begin with. Canada’s oil wasn’t hated because it was particularly greenhouse-gas-intensive; it was hated simply because it was oil.

And Canada wasn’t targeted for international outrage because it was a significant threat to the global climate, but simply because it was an easy target.

Canada wanted to be seen as a better global citizen than the United States. Canada has generally liberal sensibilities, supremely high environmental values and is a very comfortable place to stage protests with a guarantee of high visibility and very genteel treatment by the authorities.

Not only would Canada not send out the army to suppress protests, it would not even dispatch Dudley Do-Right to stop anti-oil Snidely Whiplashes from tying sweet Nell to the railroad tracks to block oil transport.

The event that finally shows just how much of a distraction the pursuit of social licence has been took place only weeks after the final victory over Keystone XL. The focus of international climate activism has turned to stopping the transport of the oil long held up as superior to Canada’s: American light sweet crude oil, which is pretty close to the average greenhouse-gas-emission intensity of global hydrocarbon production.

That’s right – now they’re after the black gold. The Texas tea. A roster of Hollywood celebrities – including some of the same ones who flew over northern Alberta in emission-belching helicopters to proclaim Canada an environmental wasteland – now run the same game against oil producers in North Dakota.

There are three stark lessons here for Canadian natural resource producers and provinces dependent on petroleum resource income for their prosperity:

Kenneth P. Green is a senior fellow with the Frontier Centre for Public Policy.

Ken is one of our Thought Leaders. For interview requests, click here.


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