After more than a decade of various politicians, pundits and oil industry spokespeople in Alberta using Saudi Arabia’s wretched track record of human rights abuses to advance the cause of Canadian oil, the proponents of Ezra Levant’s “ethical oil” argument finally got the chance to speak their truth to power first-hand. With this year’s World Petroleum Congress being held in Calgary, and Abdulaziz bin Salman, the kingdom’s energy minister and a member of its royal family, among its key attendees, they had a golden opportunity to confront the kingdom. Instead, they decided to bend the knee and kiss the ring.
Few did it more enthusiastically than Alberta Premier Danielle Smith, who was all smiles when she personally greeted the prince at the airport. This is a striking departure from what she’s said about Saudi Arabia in the past, including a 2018 column in which she wrote that “I won’t be crying the blues if we stop trading with that loathsome regime. Saudi Arabia is not our friend.” She even suggested “the government should invoke the principle of national security to supply the Irving refinery with Western Canadian crude and force … Saudi oil from our market completely.”
That, of course, was back when the Saudis and their OPEC cartel were actively driving down oil prices. Now that they’re deliberately pushing them up with massive production cuts — aimed, perhaps, at influencing the 2024 U.S. presidential election — she’s clearly changed her tune. Oddly, all those concerns about democracy and human rights seem to have fallen by the wayside for the time being.
This alliance between Smith and the Kingdom of Saud isn’t about the past, though. It’s all about a shared vision of the future that revolves around continuous growth in demand for oil and gas and the opportunity for their respective jurisdictions to profit from it. “Today, if you ask me … I would see around 110 million barrels per day (of global oil production) in 2050,” said Amin Nasser, the CEO of Saudi Aramco, the world’s largest oil company, at a panel discussion during the conference Monday. “It is growing, not declining.”
This is in stark contrast to the forecast from the International Energy Agency, which predicts a peak in demand by 2030 — not 2050. "This age of seemingly relentless growth is set to come to an end this decade, bringing with it significant implications for the global energy sector and the fight against climate change," the IEA’s Fatih Birol wrote in an op-ed for the Financial Times.
He’s hardly alone in making that call. Last week, Wood Mackenzie released its own “base case outlook” that sees oil demand peaking in 2032, and falling to 92 million barrels per day by 2050. That’s a scenario that puts the planet on a trajectory for 2.5 C of warming, and any additional efforts to avert that disastrous outcome would inevitably mean even less oil gets consumed. If the world were to limit warming to 1.5 C, for example, consumption would plummet to 30 million barrels per day by 2050.
This is pretty clearly not happening, given no major country is on track to meet its 2030 Paris Agreement targets right now. But Wood Mackenzie’s forecasts show any increase in global climate ambition will have a knock-on effect on oil demand and by extension, the economic prospects of places like Saudi Arabia and Alberta. That’s why those places and their political leaders are so intent on slow-walking the energy transition right now. As Saudi Aramco’s CEO said on Monday, “A realistic time frame to achieve all of these things is important.”
“Realistic” also happens to be Smith’s go-to word when criticizing any aspect of climate policy that might curtail the combustion of Alberta’s fossil fuels. The federal government’s 2035 net-zero electricity target? Not realistic. The widespread adoption of electric vehicles in Alberta? Not realistic. The federal government’s plan to cap emissions from the oil and gas sector? You guessed it: not realistic.
But reality is very much in the eye of the beholder here, and Smith is determined not to behold the possibility that global action on climate could ever reduce demand for her province’s oil. Witness her reaction to federal Energy Minister Jonathan Wilkinson’s keynote address that dared to acknowledge that under the IEA’s 1.5 C scenario, there will be just 25 million barrels per day of oil demand in 2050. “I'm not going to allow them to take swipes at our industry and have it go unanswered, and talking about this industry winding down, being on its last legs, only having 25 million barrels a day of production by 2050 at a time when everybody's here to celebrate production and investment," Smith told reporters.
For years, Danielle Smith and other Alberta conservatives have called attention to Saudi Arabia's human rights abuses in order to advance their own economic interests. Now, they're allied in a fight against reality — and our future.
Ironically, while Smith refuses to consider the possibility of global climate action leading to reduced demand for oil, her new Saudi besties are planning for it. Crown Prince Mohammed bin Salman’s “Vision 2030” is an ambitious plan to use the kingdom’s massive oil revenues to build a new economic foundation that revolves around things like technology, finance and tourism. It includes a 50 per cent renewable energy target by 2030, a massive investment in new industries and economic sectors, and the ongoing sale of a minority stake in its national oil company. It may yet fall flat, like the kingdom’s previous attempts at economic diversification. But the fact that it’s trying this hard shows it takes the reality of decarbonization more seriously than it might want to admit.
Smith should do the same before it’s too late. After all, the only reason oil prices are high right now is because the Saudis and other OPEC members have decided to voluntarily cut millions of barrels of their production. But there’s only so far they’re going to cut, and only so long they’ll be willing to prop up the market — and by extension, Alberta’s treasury. When the Saudis decide it’s in their best interests to stop — say, when they see demand rolling over as renewables continue to take market share — they’ll happily flip the switch and flood the market all over again.
With unethical friends like these, who needs enemies?