Shaghayegh Tajvidi: The oil and gas industry employs tens of thousands of people.

Polly Leger: Many relocating across the country for the promise of good paying jobs.

Delia Warren: I mean, we even have folk songs about working in oil and gas right now. But people would always rather be home than working abroad, I think.

The songs about going to Alberta to work in the oil fields aren't necessarily happy songs.

Polly: The industry’s entangled in Canada. For some, it’s a sense of identity...

Jim Stanford: I grew up in Alberta, and I remember the bumper sticker, please God, let there be another oil boom. And I promised not to piss it all away this time.

Shaghayegh: Oil and gas is in our banking system, pension funds, art institutions and provincial health care plans. And it has a stranglehold on our politics.

Angela Carter: Every single day, 4.5 times per day, on average, we've got fossil fuel sector representatives, knocking on the doors of policymakers at the lead departments in the Government of Canada.

Polly: Oil and gas is responsible for 26 per cent of Canada’s greenhouse gas emissions.
It’s the largest single piece of the pie.

Shaghayegh: And there is no possible way Canada can meet its climate targets while the oil and gas sector chugs along, full steam ahead.

Polly: Even the International Energy Agency says that we need to end oil and gas exploration, immediately.

Shaghayegh: Last episode, we talked all about getting around and what it’s going to take to replace oil and gas in transportation.

Polly: Because transportation and gas are so wrapped up in each other. Kind of like that nightmare couple who move in together immediately and then ruin all the outings by fighting and then making out at the brunch table. You know the one.

Shaghayegh: Today-- we’ve got an even bigger question, about an even more problematic romance.

Polly: What will it take for Canada to break up, once and for all with oil and gas?

Shaghayegh: We’ll hear from workers in the industry past and present.

Polly: Talk about plans for a just transition even with one hand stuck in the tar sands.

Shaghayegh: And Our editor in chief, Linda Solomon Wood, sits down with National Observer’s own Twitter darling and columnist Max Fawcett on the politics of winning over Alberta when it comes to phasing out fossil fuels.

Max Fawcett: Would it be fair to describe Alberta as a Petro state? I think it would be fair, because everything in our politics is mediated through this lens that everyone shares, doesn't matter what your politics are. All roads lead back to oil.

Shaghayegh: And later…

Truzaar Dordi: Last year alone, our Canadian pension funds increased their holdings in the oil sands by 147%. And all of this comes with the broad question, who will be holding these stranded assets?

Shaghayegh: I’m Shaghayegh Tajvidi:

Polly: And I’m Polly Leger

Shaghayegh: From Canada’s National Observer, this is Race Against Climate Change.

***

Shaghayegh: Let’s talk about the mid- 2000s for a minute…

Polly: OOh! Let’s head to nostalgia city!! I spent a lot of the aughts as an extremely popular teen who listened to a LOT of Much Music’s Big Shiny Tunes, speaking personally.
ANYWAY! The mid-2000s

Shaghayegh: Canada legalized same sex marriage. Stephen Harper started his political reign. iPod nanos were cutting edge.

Polly: For the first time ever, Newfoundland and Labrador, with premier Danny Williams at the helm, shook off the title of “have-not province” thanks to offshore oil.

Danny Williams: We are on the cusp of greatness in this province, turning the corner to become a have province. We have put the country on notice that we are a force to be reckoned with.

Polly: And then there were Ralph Bucks! Oil revenues were so big in Alberta, that Ralph Klein, the premier, literally gave everybody in the province $400 dollars. It was boom time baybee!

Shaghayegh: I totally remember that coverage. It was this surge of people heading west to work in Alberta.

Polly: Obviously, this wasn’t the first time people have headed west to work in oil. But for Delia Warren when she graduated with a mechanical engineering degree in the 2010s…

Delia Warren: Basically the only jobs really available to me when I graduated were in oil and gas.

Polly: Delia is from St. John’s, Newfoundland. She spent seven years working in offshore oil and gas. Now, Delia says that oil and gas gave a lot of people in her home province--including herself-- stability. The cash was great, but it never sat right with her.

Delia: Climate change was one of the guiding forces behind my decision to become an engineer in the first place. So I personally found it difficult working in oil and gas. Every day, when I got up, I felt like I was basically advancing an industry that was contrary to my home values and belief system.

Polly: Delia went into engineering because she wanted to work in wind power.

Delia: Wind energy has always fascinated me I think because I come from a very windy place. If you lean into the wind in Newfoundland, you're standing up on Cabot tower, and you lean into the wind, it will hold you up. Nobody, I think a Newfoundland Labrador owns an umbrella, for instance. [laughs] It was basically the potential of this energy that we could capture and harness and put to use, and it was so abundant and free to everyone, and for me, it was just like, we could be the best at this

Polly: So when oil prices tanked in 2016 and she lost her job in some ways, for her, it was a relief.

Delia:I kept telling myself offshore design experience will one day serve me in my future role in the offshore wind industry. And here I am, and that is 100%. Correct.

Any major industrial operation is going to require the exact same skill sets as an oil and gas operation.

Polly: To be clear it’s not always a one-to-one transition when it comes to leaving oil and gas for the renewable energy sector.

Delia: Just renewable energy jobs aren't going to solve the economic issues associated with decarbonisation, or climate change or … there's a lot of moving pieces and you know, there is no one size fits all solution. But there are lots and lots of options.

Polly: She’s one of many young people who started out in oil and gas, and who have made the switch into renewables.

Shaghayegh: Okay. She’s got a professional degree, there’s an obvious parallel industry. But that’s not everyone’s case.

Polly: Definitely. For people who have worked their entire careers in this sector. Who bought houses and sent their kids to school thanks to these high paying jobs, getting into renewables is not as simple.

Dirk Tolman: My Name’s Dirk Tolman, and I’m the president of Unifor Local 707A in Fort McMurray.

Polly: When he’s not representing his fellow workers, Dirk’s a heavy equipment operator in one of Suncor’s open pit mines, digging up bitumen.

Dirk: The trucks that we run to haul dirt are big as a house.

Polly: Dirk’s spent 30 years working in Fort Mac. He gets that the oil and gas industry is changing. He’s even talked about it with his kid:

Dirk: I have a son, he's 22. And he has talked in the past about doing what I do. When I said, Well, for one thing, some of the equipment now is automated. And that's a trend that's going to continue, I believe. And besides that the demand for the product we're making or producing may not be around to last a career either. Eventually it will wind down.

Shaghayegh: So, for Dirk, What does “eventually” look like?

Polly: Well…

Dirk: I think the oil sands mines will be around for a long time. 50 years.

Shaghayegh: Okay, so, if the oil sands keep going until 2070 there’s no way Canada’s going to slash emissions enough to reach its climate targets.

Polly: Yeah. The federal government has promised that it will be net zero by 2050-- including the oil and gas sector.

Shaghayegh: But to keep global temperature rise under 1.5 degrees, and to keep catastrophic climate failure at bay…

Polly: …The transition may need to happen a whole lot faster.
A recent study in Nature found that if the world is going to make that key cut off of 1.5 degrees of warming or less, Canada needs to keep 83 percent of its oil reserves in the ground. No matter which way you slice it, the boom is over.

Jim Stanford: I grew up in Alberta, and I remember the bumper sticker, please God, let there be another oil boom. And I promised not to piss it all away this time. But this time, we know that the boom is not going to come back.

Polly: This is Jim Stanford. He’s a labour economist, and he has a plan.

Shaghayegh: You know I love a plan. What’s Jim proposing?

Polly: Okay, I do want to clarify that there are a lot of different plans out there when it comes to phasing out this industry. But in some ways, Jim’s is really simple:

Jim: If we do this gradually over time, most fossil fuel workers won't need to transition to another job or another career or another occupation.

Most of them can just retire.

Shaghayegh: Wait, what?

Polly: I know right! Just retire!
But really, Jim crunched the numbers, and most workers in oil and gas are in their 40s. So he says-- listen: set firm deadlines for when oil and gas will need to cease operations. Let’s say, 2050.

Jim: We've got a 20 year time, and time is the best friend of transitions.

Polly: If there’s a hard out, Jim argues that people can be eased into early retirement, and the younger workers in the industry right now can carry out their careers. And in the meantime, as things slow down, fewer people will get into oil and gas.
But this ONLY works, Jim says, if the feds are really clear about the timelines.

Shaghayegh: But if someone’s just talking about your livelihood like it’s a number in a theory it just doesn’t always sit well. For example, here are some of Dirk’s concerns.

Dirk Tolman: Where would we go? If it was mandated to have the oil industry shut down? I would say there has to be a pretty robust plan in place to replace the workers and not only the workers, but the money that the oil industry generates for the country.

Shaghayegh: This is a question that keeps coming up. Give me an updated sense, just how big is oil and gas when it comes to the current economy?

Polly: Well, if you add up every single fossil fuel job in Canada-- it makes up less than 1 per cent of total employment. Here’s Jim again.

Jim Stanford: in the overall scheme of things, fossil fuel jobs are not central to the well being of our labor market.

Shaghayegh: Okay, but what about the actual money-- isn’t oil and gas central to GDP?

Polly: The most recent numbers from Natural Resources Canada say oil and gas makes up about 5.5 percent of the national GDP, which is what Dirk is talking about. Jim sees it a bit differently

Jim: This so-called “value added”, that shows up in very, very wide profit margins for the oil companies involved, ends up being paid out to the foreigners who own these companies. So it doesn't even necessarily set foot in Canada's economy. So there's all kinds of wildly inaccurate and misleading estimates of the importance of the oil and gas industry to our GDP, to government revenues, to exports, and so on. We shouldn't take those claims seriously. The true contribution to national GDP is probably in the range of three to four%. We're not going to just take all of these people in these resources and throw them aside. We're going to put them to work doing something else. So Canada’s GDP will not suffer remotely.

Polly: For decades, oil and gas has been propped up as the driver of Canada’s economy.

And yeah, 4% is a sizable share of the GDP. But if you break it down by industry, real estate is actually a way larger driver of GDP.

Thousands of workers are going to need new jobs, whether that’s in the renewable sector or if it’s something brand new. The Liberals promised $2-billion to help transition folks into low-carbon jobs in oil-dependent provinces, in places like Alberta, Saskatchewan and Newfoundland Labrador.

Shaghayegh: Is $2-billion enough?

Polly: So, you remember Delia?

Shaghayegh: Of course!

Polly: She used to work for this group called Iron and Earth which helps oil and gas workers transition into renewables. And it argues that to help all those people retrain to transition into a green economy it would take $10-billion dollars.

Shaghayegh: That’s a hefty price tag.

Polly: To put it into perspective, the Liberals promised $10-billion over 3 years as part of a Covid-recovery infrastructure plan. And $10 billion, that’s nearly double what the government has committed to spending on climate adaptation every year.

Jim Stanford: We cannot leave it to the oil and gas companies, you know, they cry crocodile tears about how much they care about oil jobs. That's nonsense. They will throw the workers under the bus at the first opportunity, if it enhances their profits. In fact, they're already doing it with their layoffs, with their outsourcing, with using labor hire, and other forms of insecure work, and replacing workers with robots and machines, wherever they can.

Polly: The key thing here is that wIthout a real transition plan in place for workers, getting off oil and gas just stalls out.

Shaghayegh: In episode 4 we all heard Max Fawcett talk about blue hydrogen and Alberta. Max, of course, is a columnist with National Observer. That snippet was part of a longer conversation with Max, all about ending Alberta’s love affair with oil and gas. After the break, we’ll hear way more on that bad romance.

***

Hi, I'm Sandy Garossino. I'm a public affairs columnist at Canada's National Observer. You can read my in depth analysis, usually from a legal point of view, on everything from the anti-Alberta inquiry into environmental NGOs and their funding, to Omar Cotter.
Help support strong independent journalism and subscribe today.
Just head to national observer.com/subscribe.
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***

Shaghayegh: Hey Linda

Linda Solomon Wood: Hey Shaghayegh.

Shaghayegh: So, you sat down with Max Fawcett, who, of course, is a columnist with Canada's National Observer.

Linda: Max has covered oil from a lot of different perspectives. And Max has been really deep in there in Alberta, working on climate policy with the NDP government. But weirdly, he was the editor of Alberta Oil Magazine too. So he’s kind of covered the spectrum. That’s why I really wanted Max as a columnist for National Observer. But it was also his massive twitter following [laughs].

Max Fawcett: It's funny, I always joke that in B.C., I annoy people for being pro oil and in Alberta, I annoy people for being anti oil. So it really depends on where I am. Who's mad at me? Someone's always mad at me.

Linda: Max had so many interesting things to say about Alberta and Albertans. How people are coping with the idea of such a major transition…. A transition, that frankly isn’t always easy.

***

Linda Solomon Wood:

What do you think is going on in terms of insider thinking in the oil industry in Alberta?

Max Fawcett:
So yeah, I was the editor of Alberta oil magazine back in 2015, which feels like a lifetime ago in terms of the climate conversation. And back then, what annoyed people in Alberta was that I was telling the industry you have to take this seriously, this is a material business risk for you. This is the way the world is going. And back then they really weren't willing to acknowledge that. It was still the sort of drill baby drill, ethical oil you know, we're better than Saudi Arabia nonsense. And they weren't willing to come to terms with what was coming. They've been made to come to terms with it, not so much by sort of climate activism although that has definitely helped, but by the financial markets. The financial markets have very clearly told them, “we are not interested in your old business model we do not like it we do not want it we will not pay for it.” Talk to the money guys and the money women talk to the banks talk to the financial institutions, the pension funds, because they are the ones that are setting the tone here.

And so within these companies it's kind of like there's a negotiation that they're doing with these you know these investors of theirs. These large organizations, the Canada Pension Plan Investment Fund, big banks, you name it, basically saying “what do we have to do to keep you holding our shares and buying our debt?” And the financial institutions can set the terms, and so they're the ones that are getting the companies to say “we'll be net zero by 2050.”
You know, you hear a lot of times people talking about “oh, you know, the federal government wants to phase out fossil fuels, the big banks are phasing it out.” The irony is it's the companies themselves, right now, that are phasing out the workers. They are the ones who are replacing workers in the oil sands with technology. They're the ones that are replacing workers in the field with new you know, high tech drilling rigs

Linda: But that's different than not drilling though.

Max: Well, but it's cheaper.

I do think that the people who really clung to the “climate change is a conspiracy let us drill oil” will start to realize that the enemy is not the people in B.C. who are activists. It may well be the people running the companies they work for. Because they are not hiring. They are not bringing more labor on, and they cannot be counted on to sustain their quality of life. And maybe then they'll start looking at these new careers, these new paths.

Linda : So what do you think people outside of Alberta? Just don't get about Alberta and this issue?

Max: What we in the rest of the country need to do a better job of and you know, the Liberal government has failed on this front. New Democrats have largely failed on this front. Is offering a way out, that is realistic, right? That is inspiring to people. You can't just say to them, “you can give up your job in the oil industry and take one in the renewables industry”, because they know by and large, that those jobs don't pay as well. Some cases not as well unionized and maybe require different work arrangements, right. So we need to fund the transition in a much more transparent and robust way.

Linda: That's really interesting, what you're saying about the jobs and renewables perhaps not having as good a union environment around them. And you know, how critical the unions really are to this transitional period and pushing that forward.

Max: It's a tough trade, right? Because it used to be the case in Alberta that you could drop out of high school and get a job making six figures very easily. You can't do that in the renewables industry. You have to get a trade, you have to go to school for a little bit. And we can get people to make that trade, but I think we need to be a little better at selling it to people.

And the way I've always sold it to people is -- yes, in the oil sands, you make bags of money, no question. It's also really hard on your family, and you. Working in a camp being, you know, on and off for these very sort of stressful shifts and having to fly all the time. And wouldn't it be nicer if you could work in your community, with your children, with your family, on a regular predictable schedule? You might make 20-30 grand a year less, but maybe you make it up in the amount of time you get to spend around your family.

It used to be that climate change, you could push it off-- well, it's someone else's problem. You know, we'll deal with it in 30 years. It's not going to affect my quality of life. But now in Alberta, if you if you have to lose six weeks of summer because it's so smoky you can't go outside, that materially affects your quality of life.

Linda : Because you don't have that much you don't have that much summer.

Max: You don’t have that much summer! There's bug season, now there's fire season. It really narrows the window where it's not snowing. And so I do think that's smart and a few people up to the fact that this a now problem, not a tomorrow problem. Now, will that translate into different political choices? Time will tell.

They will not transition that economy. They will go kicking and screaming. So drag them. Drag them kicking and screaming. If they want to talk about separation, go ahead, let them talk. I think a really interesting way to approach the equalization conversation would be to say, look, we acknowledge that Alberta taxpayers have contributed hundreds of billions of dollars over the last few decades, not because they wanted to, you know, they had to. We all have to pay our taxes. But let's now honor that contribution, by investing large amounts of money in transitioning them out of that old economy and into a new one. And dare the provincial government to turn its nose up at that funding.

I think that would be a much more productive conversation than the feds trying to show that they love oil just as much as Alberta does, because they'll never win that. But if they show they love Albertans as much as the Alberta government does, that's a different conversation.

Linda : How much of that is political bluster? And how much of that is really going somewhere?

Max: I guess I would say political bluster on whose part. You know it's funny I was talking to, I hope he doesn't mind me saying this, but talking to John Valiant on Twitter about this and he was saying, do you think would it be fair to describe Alberta as a Petro state? And I thought, I think it would be fair because everything in our politics is mediated through this lens that everyone shares doesn't matter what your politics are. And I think that's one of the defining aspects of a Petro state is that it kind of consumes everything. All conversations, all roads lead back to oil.

Certainly the road is changing right now. You know, the oil and gas industry is willing to acknowledge that their industry will change in the near future. That eventually we will not be using oil and gas. But the way that they're framing it now is that that date is 50 years away, right, long time away. Their new strategy is to say, Sure, we accept climate change, and we accept that we're contributing to it. So let's transition away from fossil fuels but let's do it very slowly. Let's do it in someone else's lifetime. And I understand that strategy from their perspective. I also think it won't work. Once you acknowledge that the transition is underway, you're just haggling over the price.

Linda: Well, Max, thank you so much for being with me today.

Max: Thanks for having me, it was great.

***

Shaghayegh So Max mentioned the role money people play in sustaining the oil and gas industry…

Max: “Talk to the money guys, and the money women, talk to the banks, talk to the financial institutions the pension funds

Polly: Recording that, I had my very own Jerry McGuire moment.

[YELLING OFF MIC: SHOW ME THE MONEEEEEYYYY]

Shaghayegh: That’s basically the whole divestment movement. And it’s working! University of Toronto … Simon Fraser University… one of Canada’s largest pension funds… all recently announced that they’re pulling their investments out of fossil fuels. And that’s just to name a few institutions. Just these three examples equals more than 8 billion dollars pulled out of oil and gas investment

[So much money]

Shaghayegh: Let’s zoom out for a second, and look at all of this in the big picture.
Because oil and gas touches everything at a national level from Parliament Hill to the Canada Pension Plan.

Angela Carter: I feel like Canada is out of step with what's happening globally. And that is a scary place to be for economic reasons, but also for climate reasons. And when I think of the federal government, and its climate policy with respect to the oil and gas sector, it's like they're going at high speed in the wrong direction.

Shaghayegh: This is Angela Carter, she’s a political science professor at the University of Waterloo.

Angela: We think not only of energy, the oil and gas and coal sector, as just industry, we actually think of them as like part of us, and part of our identity. This is true across Saskatchewan and Alberta, and Newfoundland and Labrador. It's become woven into this political, cultural narrative

Shaghayegh: She’s also the co-author of “Correcting Canada’s ‘One eye shut’ climate policy”, which she wrote with:

Truzaar Dordi: Truzaar Dordi, I am a PhD candidate at the University of Waterloo, studying climate finance.

Shaghayegh: Remember Truzaar? He joined us last episode to talk about blue hydrogen.

Their paper found that --far from being on track to winding DOWN fossil fuels…

Truzaar Dordi: Canada is on track to increase its production well into 2050. When we should be carbon neutral.

Shaghayegh: And while the current federal government is talking about bigger climate goals than the governments before it, when it comes to oil and gas…

Angela: 4.5 times per day, on average, we've got fossil fuel sector representatives knocking on the doors of policymakers at the lead departments in the Government of Canada, articulating very clearly what it is that they want, and the risk of not giving them what they want.
Now, if we compare that 1200 meetings for that first year of COVID that the oil industry sector had, well, there were only 300 meetings with environmental sector representatives.

Polly: Ugh. It’s Canada’s very own toxic boyfriend….just break up already!

Truzaar: In Canada, our financiers have doubled down on the fossil fuel industry $560 billion lent by our big five banks since the Paris agreement to the fossil fuel industry.
Last year alone, our Canadian pension funds increased their holdings in the oil sands by 147%. And all of this comes with the broad question, who will be left holding the bill? Who will be holding these stranded assets?

Shaghayegh: And if you need a little reminder about econ jargon...

Truzaar: You can imagine owning a blockbuster, right, right before the advent of Netflix. And all of a sudden, you have all of these assets, these DVDs that don't hold the same value they did. And generally these these stranded assets are quite abrupt.

Shaghayegh: It’s really hard to get an idea of how much federal support goes to the oil and gas industry through indirect means -- like tax breaks.

Angela and Truzaar have estimates that range from the official count of $2-billion a year to 18 billion.

At COP 26 in Glasgow, Trudeau promised to cap emissions from the oil and gas sector-- basically setting a cap on how much they can pollute.

Justin Trudeau: We'll cap oil and gas sector emissions today and ensure they decrease tomorrow at a pace and scale needed to reach net zero by 2050. That's no small task for a major oil and gas producing country

Shaghayegh: But so far, there hasn’t been any word on what that means for how much oil can actually come out of the ground.

Polly: How much teeth do you think that promise really has?

Shaghayegh: Well, based on Canada’s track record of never having met any COP promises, Angela doesn’t think it has any real bite. She’s skeptical that allowing companies to lower their emissions while still extracting oil will work. Instead, it seems more like greenwashing:

Angela: Here in Newfoundland and Labrador, there's a great deal of talk about our oil being “green”, you know, we have “green oil” or “low carbon oil, “that is an oxymoron. You know, that's like calling cigarettes health smokes.
I’ve joked that we could have those platforms offshore powered by vegans peddling bicycles, but it doesn't matter. Because no matter how we produce it, we're still producing the lead in the commodity that's driving along the climate crisis.

Shaghayegh: Oil and gas is more than a quarter of Canada’s emissions pie.

Polly: It’s the biggest slice of an unsavory dessert. The question is-- how do we make sure politicians follow through when it comes to getting off oil and gas?

Max: Once you acknowledge that the transition is underway, you're just haggling over the price.

Shaghayegh: That price has to include real options for the people working in the sector right now.

Angela: You asked what would be the one thing that we need. And for me that is a just transition policy, where you are making sure that workers and communities that are most dependent on the sector have a pathway to a decarbonized future.

Jim: What we know is inadequate is to wait until the crash occurs, and then try to rush in with little bits of assistance for you know, unemployment insurance or retraining or other kinds of help. That's why it's critical that we start now and set timetables and stick to them.

Angela: And until we get that, the industry will always be able to say that, you know, jobs and and workers are dependent on us.

There are plenty of examples of other countries that have fossil fuel, fuel reserves and fossil fuel industries, active industries that have seized this particular opportunity because of the climate risks and because of the economic risks to transition.

CREDITS

Shaghayegh: Special thanks this week to our guests! You can find more of their work, as well as all the studies and papers we mentioned, in our show notes.

Polly: And you can find way more coverage of the climate emergency at National Observer dot com.

Shaghayegh: Canada’s National Observer wouldn’t exist without founder and editor-in-chief Linda Solomon Wood. This show was produced and edited by me, Shaghayegh Tajvidi.

Polly: And me, Polly Leger. Fact check by Luke Ottenhof. Final audio mix by Tyler Gillis and the Aftertouch Audio team

Shaghayegh: Artwork by Ata Ojani. Music this week from Blue Dot Sessions.

Polly: Thank you to The Navigators for the use of their song “Pulling Oil From The Sand”.

Special thanks to the Legislative Library of Newfoundland and Labrador for use of archival tape, as well as to Ian Boyo.

Shaghayegh: Suzanne Dhaliwal does our promotions and comms.

Polly: Race Against Climate Change is a joint project from Canada’s National Observer and the Canadian Centre for Journalism. You can follow us on twitter AND instagram @NatObserver.
If you like the podcast, please subscribe and give us a rating or a review. Literally, wherever you find your podcasts. It really helps other people find the show!