An economic change in Cape Breton 50 years ago brought change to my life and the lives of many of my contemporaries.
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| Cape Breton Summer |
Reflection on that time may be able to offer some insights on how we can manage the economic disruption in western Canada associated with the oil and gas industry. As a youngster in Glace Bay, I knew that “coal was king”. My Dad was an electrical engineer working in the collieries of Cape Breton and Eastern Nova Scotia. My town bragged that it was the largest town in Canada. I could count 5 or 6 “pit heads” from my backyard. My grandparents lived in the nearby industrial city of Sydney where coal was one of the necessary ingredients to make steel, 3 shifts a day, 365 days a year. Like many communities that depend on resource industry, we were dependent on “foreign owned companies” to invest in the industry to be competitive in costs and product offerings. When the market for our products waned in the 60”s, the companies left town.
Sunset industry
The “New Deal” response of the Federal Government was to create the Cape Breton Development Corporation to transition the former “miners” and “steelworkers” to opportunities supported by government investment. The coal remained in the ground for a few years until a market change in the 70”s made it possible for DEVCO to return to mining the vast coal resources under the ocean between Cape Breton and the island of Newfoundland. The coal fields under the ocean are a vast source of energy. Unfortunately, the cost of extraction is high and the quality of the coal is low. Wach et al at Dalhousie have produced a presentation on Reservoir and Seal Pairs:
CARBON SEQUESTRATION IN ATLANTIC CANADA [1]
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| (n.d.). carbon sequestration in atlantic canada - Dalhousie University .... Retrieved November 10, 2019, from https://cdn.dal.ca/content/dam/dalhousie/pdf/science/basinReservoirLab/Carbon_Sequestration2011.pdf |
It is in this way that Cape Breton and Alberta are parallel problems. Alberta bitumen is costly to extract and it is low in quality. In Cape Breton, my Dad worked to engineer a technological solution that would improve the quality of Cape Breton coal by a process to remove the sulphur that would generate acid rain when the fuel was burned. The Victoria Junction coal processing plant was able to substantially reduce the sulphur content of the coal. In Alberta, many are confident that a technological solution will reduce the high greenhouse gas (GHG) emissions of burning bitumen. Unfortunately, cleaning up the coal in Cape Breton that was mined miles out under the sea made it even more expensive and even less competitive in the market. The demand for oil in the world is likely to continue for decades. The market will seek out the oil that is the least expensive to extract and has the lowest GHG emissions.
(2019, October 30). Saudi Aramco's IPOAramco is both the oil sector's Goliath and .... Retrieved November 2, 2019, from 2https://www.economist.com/briefing/2019/10/31/aramco-is-both-the-oil-sectors-goliath-and-a-firm-vexed-by-problems
Alberta bitumen like Cape Breton coal is neither cheap nor clean.
Carbon energy sources that create acid rain like Cape Breton coal or emit high levels of GHG, like Alberta bitumen are not going to be the first choice in markets feeling increasing pressure to be responsible morally and legally for the quality of life on the planet. The involvement of government in the transition to alternative employment in Cape Breton was not a cultural or political problem for people with strong trade union membership. In Alberta, the culture has not depended on government for development or employment and the level of unionization is lower. Cape Breton saw the companies in the resource industry pack up very quickly when the profitability disappeared. Alberta is witnessing the migration of the energy companies to more profitable “plays”. Ultimately, when the resource product is less competitive the closure of the extraction operations becomes not a question of “if” but “when”. The best response is to transition to employment opportunities that are in “sunrise” industries and abandon the ”sunset” operations with high cost and low quality products. The “New Deal” role for government is to provide economic and development resource for the people in transition. Already, the green energy economy in Canada employs more than 300,000 people and this is expected to increase as we transform our energy and transportation systems to confront the climate emergency in Canada.
References
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