As oil prices plummet and coronavirus-hit economies reel, analysts and experts are urging aggressive investment in labour-intensive renewable energy projects and efficiency retrofits as a responsible, cost-efficient, and “very practical” path through—and beyond—the pandemic.
With the price of oil drilling deeper and deeper—to the point of actually hitting negative levels recently, with Western Canadian Select trading at -$3.83 USD per barrel as of April 22—and the oil-dependent economies of Alberta, Saskatchewan, and Newfoundland and Labrador ever more distressed, policy analysts say a speedy investment in the renewable energy sector could alleviate some of the suffering, reports CBC.
“There are very practical reasons it would make sense,” said Martin Boucher, a public policy lecturer at the University of Saskatchewan.
One key reason is that weak oil prices are here to stay, at least for the foreseeable future, with the U.S. Energy Information Administration forecasting “only gradual increases” in crude oil prices through 2020.
CBC notes that “trade wars and production increases by the U.S., Saudi Arabia, Russia, and other global powers and the lack of pipeline capacity in the landlocked Canadian Prairies are combining with labour-saving technology to decrease prices.” These factors began before COVID-19 came knocking, and will linger long after the pandemic ends.
The ravaging effect that rock-bottom oil prices will have on economies dependent upon the resource has been confirmed by government forecasts, which report that the Saskatchewan government alone could suffer “as much as C$1.2 billion” in lost oil revenues this year.
CBC points to experts like Francesco La Camera, director general of the International Renewable Energy Agency, who are policy-makers to alleviate such devastating economic fallout with economic measures that fight the climate crisis. “Stimulus and recovery measures in response to the pandemic must foster economic development and job creation, promote social equity and welfare, and put the world on a climate-safe path,” La Camera recently advised.
The $1.7 billion that Ottawa recently committed to clean up abandoned oil wells in Alberta, with the expectation of creating 5,200 oilfield services jobs, is definitely a move along that path, says CBC. Also fostering both climate protection and job creation: $750 million in new federal monies to support innovation in methane reduction in the oil and gas sector.
Coupling climate initiatives with job creation can produce a much bigger bang for the invested buck, said Boucher, who specializes in energy transition policy. He told CBC that reallocating even a small share of government funding to green endeavours “will provide far more jobs per dollar invested than investing in the oil industry.” He recommended energy-efficient retrofits for homes—“better windows or thicker insulation”—as a labour-intensive investment that requires local spending, and keeps more money in homeowners’ pockets.
“These are simple approaches, but they’re domestic. They don’t put us in a situation where we’re overly exposed to the ebbs and flows of oil and gas,” Boucher said.
And then there are the jobs—and the tax revenue—waiting to be realized in solar, wind, geothermal, and biomass energy systems.
“Saskatchewan’s got so much potential,” said Saskatoon-based energy consultant Jason Praski. Many in the province have already been won over to the merits of the green economy, and investments have already been made in generating biomass energy from local crop and wood waste, but the economic devastation wrought by COVID-19 could still bring many more onside.
“I think the whole pandemic is helping us pay more attention to each other and look after each other, and the climate change crisis is really a similar problem, it’s just longer term,” said Praski. “As we think about this whole thing, rethinking our lives, it may get us all thinking a little closer toward doing the greener thing if we can.”