John Podesta, the President and CEO of the Center for American Progress and former Chief of Staff to Bill Clinton gave the keynote speech at the recent Canada 2020 Greening the Oilsands Summit.You can read John Podesta's speech, which calls into question the future of the oilsands as an energy resource to the U.S here.

"In a free and frank discussion at our invitation John Podesta, policy guru to American Democratic presidents, gave us a cogent and compelling view of why the world must turn away from fossil fuels.

Even though this caused some degree of heartburn among my fellow Canadians, I agree fully with the spirit and intent of Mr. Podesta’s views.

What disappoints me, though, is how easily he is ready to give up on the common goal we should embrace: using our fossil fuel wealth to pay for the transition to a green future.

When I was a boy in the United States – I spent a year in apartheid-era Nashville in 1963, wondering whether I should drink from the “white” or “coloured” fountains – what struck me more than anything else was the “can do” spirit of Americans.

Now, it is almost as though something is broken in the American psyche. Far from embracing the challenge of greening the oil sands, Mr. Podesta and some of his fellow Americans appear to be giving up on the world’s largest hydrocarbon resource.

 

We need that “can do” spirit from our friends and partners in the United States, as we endeavour to clean up the past and organise the future of oil sands development, in a context of environmental stewardship. And we hardly need remind Mr. Podesta that the environmental mess is a direct result of his country’s insistence on access to our oil.

Yet it is churlish and perhaps counter-productive to simply demand the Americans foot the bill for cleaning up the mess of their making, and look forward to the opportunity.

If Mr. Podesta’s country would divert one year’s spending on the Iraq War, roughly $120 billion, into applying clean and green technology to the oil sands, we can guarantee – not promise, actually guarantee – a clear path forward to making the oil sands sustainable. This a serious request, because we need to have a serious conversation.

Canada is about to become the world’s largest oil reservoir.  Not one of the largest, not among the leaders, but No. 1. Sometime in 2011 or 2012, the technology that’s making the Alberta oil sands cleaner, more sustainable and more accessible will give us  proven reserves of 300 billion barrels or more. In a world addicted to hydrocarbons, we are front and centre.

As has been made clear in the last several decades, the consumption of oil from opaque regimes exerts a tyrannical grip on the way of life in industrial societies. Moreover, most of the world’s oil is in the control of tyrants. None of this bodes well for the future of the planet. On the road to ultimate independence from oil, a necessary first step is to source oil from stable, transparent, accountable nation-states bound by the rule of law. Among the handful of these, the only one with abundant, long-term oil supplies is Canada.

Modesty is bred in the Canadian bone. We’ve neither asked nor sought to lead. Yet lead we must, if only because we are the only advanced democracy amongst the world’s large oil powers. The other major petro-states – Saudi Arabia, Iran, Iraq, Venezuela –each in their own way embrace a culture of violence. They suppress their citizens and unsettle their neighbours. All too often, petro-wealth is used to pursue and foster the interests of an oligarchic elite. We Canadians soon will stand alone in this club, as the one oil power committed to serving the common good, and to a matrix of societal development designed to nurture the common wealth on a foundation of “peace, order and good governance.”

It already is clear that we cannot “stop” climate change, no more than we can turn back the tide of industrial history, nor retrieve the carbon that has surged unchecked into the atmosphere ever since the advent of what William Blake so memorably called “these dark, Satanic mills.”

Yet even as we move vigorously to curb carbon emissions and find ways to adapt to inevitable climate change, a pivotal challenge remains: how to fundamentally change the way our species uses fossil fuels.

The future of the planet we share depends on whether we Canadians can succeed in the responsible and sustainable development of the planet’s largest hydrocarbon deposit. If we can, we will contribute to a sustainable future for our species, our way of life, and the rich diversity of life on Earth. Just by trying, we might learn enough to significantly reduce the perils of climate change and enhance our capacity to adapt. This is a distinction with a difference: even with all the mitigation we can adopt, we must adapt to the climactic changes wrought by the damage already done. Until the presidency of Barack Obama, the United States vigorously pursued the unfettered exploitation of hydrocarbons and fossil fuels. Since January 2009, the U.S. administration has embarked on a new path. This is how President Obama framed the choice on June 29, 2009:

“We can remain the world's leading importer of oil, or we can become the world's leading exporter of clean energy. We can allow climate change to wreak unnatural havoc, or we can create jobs utilizing low-carbon technologies to prevent its worst effects. We can cede the race for the 21st century, or we can embrace the reality that our competitors already have: The nation that leads the world in creating a new clean energy economy will be the nation that leads the 21st century global economy.”

There is intense focus on the United States to “free” itself, as Mr Obama puts it, from “the tyranny of oil.” Yet not all foreign oil is “foreign”. Canada, after all, is the leading oil supplier to the United States. Bracketed in with those Middle East powers, Canada has the second largest reservoir of recoverable oil in the world, and by far the largest oil deposits. As partners in the North American Free Trade Area, Canada and Mexico are sources of what might be called friendly oil, or even familiar oil.

Canada’s oil sands, if they can become greener, are a major part of the answer to stable and long-term hemispheric energy supply, as the U.S. looks for a more sustainable energy platform and with it significant mitigation of the threat of climate change.

Beyond a few purblind ravers, no rational person denies the reality of climate change.

Of course some of it is a natural cycle, all proven by studies of the past: periods of heating and cooling, the tropical forest that once covered the Arctic, the glaciers that scoured Europe long after Homo sapiens emerged, all these are etched in our Earth. Yet since the first decades of the 19^th century, we have lived in what is called the anthropogenic age of climate change, the scientific way of noting the effect of human activity on the climate of Earth.

Despite the barrage of criticism as the methods and some of the data if scientists mapping climate change, we should remember that science invites itself to be proven wrong: it is the very nature of scientific inquiry to propose a thesis in the expectation that it will be challenged. This is how knowledge advances. Today, the collective weight of the findings and theories that have yet to be disproved, show that the combustion of fossil fuels is accelerating the warming of the planet.

My central argument aims to move beyond the either/or cacophony of mindless fossil fuel combustion and Utopian alternative energy. To end the tyranny of oil, we Canadians need to consider greener oil sands; cleaner coal; solar, wind, hydro and other alternative energy; bio-energy and bio-economy. These are simultaneous and complementary outcomes of cogent energy policy within a context of environmental stewardship.

So are we ready to become the responsible superpower? It’s time to have that adult conversation.  At the Copenhagen summit on climate change last December, we Albertans saw the elegant pirouettes of the premiers of Ontario and Quebec as they showed what good lads they’ve been in going green. The oil sands (and the Government of Canada’s robust advocacy of this resource) were viewed as an unsightly embarrassment, like a blob of ballpark mustard on a bespoke Corneliani suit. Why, these good premiers asked, should their provinces bear the cross for Alberta and its embarrassing oil sands pollution?

Because, like it or not, Canada won the geological lottery.  And if we set our minds to it, we Canadians can clean up past pollution, limit future harm to the biosphere, and use the wealth of the oil sands to generate the cleaner and more sustainable sources of energy the world needs to fuel its aspirations for a better life.

 We have the technology to clean up the oil sands. We need a strong regulatory framework, and citizens spurring the government to action, to ensure that best practices become mandatory, that early adopters of new technology get rewards and incentives, and that laggards and polluters pay significant penalties. Yet making the oil sands greener and more sustainable doesn’t dilute the fact that nearly 90 per cent of the emissions from a barrel of oil come out of exhaust pipes. We need to accelerate our progress towards a clean-energy future.

The deep cynicism of the developed world’s Copenhagen rationale –“we got rich by devastating the environment but you have to stay poor to save the planet” – will not pass muster. If all of humankind aspires to our lifestyle, we will need five planets, not one. One answer – clean, abundant, renewable energy – will cost billions of dollars to develop.  In a world beset by climate change, the responsibility is on us to demonstrate that we can develop clean, green energy extraction here in Canada and share this to the benefit of the planet. Green technology is unlikely to come out of war zones, or from developing countries rushing headlong to catch up with the prosperity of the rich world.

Dominique Strauss-Kahn, who leads the International Monetary Fund, reckons the planet needs a $100 billion green fund to limit climate damage and help nations develop cleaner energy. We Canadians can provide the bulk of that funding, from our oil reservoir. Yet to do so, we must be ready to become the responsible superpower.

No more the easy comfort of ignoring the gold-medal winner of a track and field race while CBC dutifully interviews the plucky Canuck who finished eighth. No more revelling in the fifth place finish which the perky announcer tells us was the “best ever!” by a Canadian at this level of global competition. 

Proportionately, on a per capita basis, we are among the highest emitters of greenhouse gases in the world, and owners of what will soon become the world’s largest oil reservoir. What does that mean in terms of our planetary obligations?

We start with the presumption that we have a duty of care to the planet, a duty of stewardship of our common wealth, and sustainability of the common good. Energy development with scant regard for consequences is as unpalatable as a sudden and immediate halt to the fossil fuel economy.

As we move to entrench cleaner production from our oil sands, we need to use the energy wealth that production generates to pay for and help to build the green and sustainable energies of the future. That’s the only viable answer to the impasse evident at Copenhagen.

So why shouldn’t we Canadians show moral, ethical and fiscal leadership – as stewards of the world’s largest oil reservoir –in funding the sustainable and abundant energy the rest of the world needs to have even a modicum of our standard of living?

Instead of seeing fossil fuels and alternative/emerging energies as rival streams, we should see  them as complementary. The greening of fossil fuel production and the development of renewable and alternative energy should occur simultaneously, and even in cooperation and harmony.  Already, it is becoming clear that fossil fuel energy companies have the capital and the resources necessary to pursue alternatives: whether this is “green washing” or a serious commitment remains to be seen, yet there is little doubt about the capacity. Alberta, however, as owner of the oil sands, can put in place both the regulatory framework and the public resources necessary to ensuring that greener oil sands production and non-fossil-fuel energy sources can evolve as expeditiously as possible.

We are at least two decades away from any viable alternatives that would comprehensively replace fossil fuels as the planet’s primary energy source. While we pursue those alternatives, we can make our production and use of fossil fuels more sustainable and less damaging to the biosphere. It goes without saying that we need to develop the oil sands by less harmful means, even if we cannot quickly achieve a standard that can credibly earn the label of “green oil.” Even if we virtually eliminate the carbon footprint associated with extracting crude oil from our deposits, how much difference will it make? We cannot escape the reality that 90% of the greenhouse gas emissions from every barrel of oil come out of the exhaust pipes of vehicles, aircraft and vessels.

Even as we develop our energy resources, we are mindful of the larger context. We must be seen to be models of democracy, of pluralism, of inclusive and welcoming societies. We must demonstrate that our duty of care brings out the best in the human spirit in all of us. Through our actions, we can pursue a sustainable life not for just the citizens of our democracy but for the entire planet. 

Constitutionally, the oil sands belong to Alberta. Yet we do not act like owners. Alberta’s political leaders are good-hearted folk who came to politics through community service, mostly in small-town and rural Alberta. They’re rooted in that fading culture where you know and look after your neighbours, your word is your bond, and you measure a person’s worth by what they give back to the community.

These admirable values leave our senior politicians ill-equipped to deal with a winners-and-losers culture of big money and rampant egos, where the sharp-eyed denizens of sleek glass towers know exactly how far a law can be bent before it will break. When the keepers of this shark tank—some of whom pull down more money in three or four years than our politicians might earn in a lifetime—bullied and bamboozled our leaders with threats of ruined economies and a deserted oil patch, the government abandoned its exceedingly modest plans to collect a higher rent.

The first task for citizens, then, is to encourage our provincial government to enforce its ownership. We cannot have credibility as an energy superpower, no matter how reluctant, if we the owners let ourselves be pushed around by surly tenants.

We need reasoned discussion and dialogue if we are to move beyond the dissonance. Some of that comes from government itself—from the professional civil servants and public-minded citizens who took on the task of stimulating economic growth in the context of environmental stewardship. We know that it is challenging to be good stewards of the environment while growing the economy but we are willing to do what it takes to get there. This willingness does not necessarily translate into having the governance capacity to lead the appropriate development of the resource.

Alberta, the owner of the resource, only has 3.7 million people. We are stretched to fulfill the duty of care that appropriate development demands. This is where we need collaboration and co-operation with global pools of talent, innovation, ingenuity, technological prowess, and capital to move forward. At the very minimum, we need willing and able co-operation from our fellow Canadians – who reap most of the benefit of the oil sands, in federal taxes, jobs, procurement contracts, equipment supply and of course equalization payments.  

Yet we Albertans must begin by doing our part. As a “pur laine” Albertan who also considers himself a loyal and devout Canadian, I am proud to advocate a made-in-Alberta carbon tax, so we that we can lead the “green future” by optimizing natural resource revenue.

We can use the Albertan carbon tax to drive innovation, economic development and wealth creation in an entirely new basket of sustainable energy industries; making full use of our investment in advanced education and technology.

Inevitably, any revenue derived from natural resources will be called a “carbon tax” and its detractors will immediately close their ears and shout “No.”  Yet with industry itself taking the lead in analysing the challenges of carbon taxation, it’s time to consider how Alberta can leverage a carbon tax to drive wealth creation, innovation and opportunity in the province.

A severance tax (imposed at the moment a resource is removed or “severed” from its natural state) would be a market-friendly means of earning carbon-tax revenue. Because it is collected upon severance, the tax does not skew the marketplace by deciding how or whether the tax burden is passed on. The extractor can absorb it, diffuse it over the value chain, or charge directly to the end user. Moreover, unlike the “license to pollute” hazard of cap-and-trade, it would ensure the money remains in Alberta, because it is collected at extraction source. Funding a greener-energy future from a severance tax would provide a tangible, direct link between resource revenues and a green economy.

The Alberta Royalty Review Panel recommended a severance tax on oil sands alone. That does not go far enough. It does not cover, for instance, the extensive use of coal foreseen in the clean coal technology that can drive near-zero-emission power plants. Nor does it address the day when  carbon dioxide trapped in peat lands and other natural formations might be “mined” to provide a commercial source of CO2 to be digested by algae, which would then be harvested for biofuels or for nutritional supplements (algae are a rich source of Omega-3 fatty acids). Nor does it find a value in taxing hydroelectricity, the instant water is severed from the state of nature to generate energy.

I propose a Natural Resources Severance Tax (NRST) applied to the gross value of any natural resource, measured by the market price of the resource at the first “point of sale” upon severance. If the proceeds of the NRST are emplaced in a designated fund to pay for The Green Future, Albertans will indeed realize tangible wealth from the natural resources they own. There would be fiscal levers: the rate would need to be in the single digits, so that it does not deter investment and innovation. Moreover, it could vary by the type of resource severed, so that it is sensitive to the particular costs and challenges of a given form of natural resource production. Yet it could provide a predictable and strong stream of revenue to pay for a clean-energy economy, accelerate the development of low-carbon industries, and greatly increase investment in renewables and alternatives. Thus, the combination of greener fossil fuel production and alternative energies would be a complementary and simultaneous development. The scale of the revenue is significant. If a five per cent NRST were applied to two million barrels a day of oil production priced at $60 a barrel, Alberta would have $6 million per day accumulating to fund the Green Future.

This objective would certainly work well if Alberta moves aggressively toward robust environmental mitigation technologies. Given the emerging economic opportunity of going green, investment is more likely to flow into Alberta if it is seen as a “demonstration lab” for such technologies.

Moreover, Alberta can effectively leverage this investment by a continuing commitment to carbon capture and processing, enabled by absolute caps on greenhouse gas emissions that will enable a market price for carbon emissions, and a coherent industrial strategy that rewards investment in environmental mitigation. Thus, the NRST becomes a building block to a greener and more sustainable economy, in Canada as the world.

A clean environment and a robust economy must be complementary goals. They can’t be reduced to either/or. Environment and economy are really two sides of the same coin: yet to act on the implications of this insight, we will need a level of leadership so far lacking in Alberta and in Canada.  Unfortunately, because of our “reluctant superpower” tendencies, our political leadership seems hesitant to lead that future.

There is little doubt that economic prosperity goes hand in hand with environmental sustainability. Many influential Albertans see climate change as a business opportunity. Large energy companies are willing to invest in carbon capture and the clean energy economy—as long as government takes the lead in setting out clear and enforceable rules with authentic rewards and penalties. In the absence of government policy leadership, what profit-minded, market-based enterprise would be the first to undertake the risk in developing the means to slash greenhouse gas emissions if its competitors are not required to follow suit?

To find an equitable framework for development, we should start with the position that we are never going to be satisfied until we come as close as possible to a zero net environmental impact.

Firms will respond to a clear regulatory framework that applies to all. This becomes especially important as more and more foreign firms enter the oil sands. In Dec. 2009, Petro China, the world’s largest energy company, won Government of Canada approval for its$1.9 billion investment bid to buy a 60 per cent stake in privately-held Athabasca Oil Sands. China now joins Norway, Abu Dhabi, France, the Netherlands, Great Britain, Hong Kong, and the United States in the club of countries whose state-owned and or private entities have a stake in Alberta’s prime resource.

The Government of India has repeatedly expressed an interest in the oil sands and its cabinet has approved an investment in the order of $2 billion.  With this range of international investors, it is imperative to bring a common understanding, and regulatory clarity, as to what we Albertans and Canadians wish to achieve. Our goal every year should be to continue to significantly reduce the environmental footprint of oil sands development, even as development expands. We won’t be able to do that until we invest massively in the research and technologies that will get us there.

It may very well be that research and technology won’t catch up quickly enough. In that case, we will have to slow down the development of the resource. By adopting the stewardship framework, the absolute bottom line has to be that every year the footprint is seen to grow smaller, even as the extraction opportunities grow larger.

If the footprint can’t go smaller, we may need a freeze, we may need a moratorium, we may need a profound slowing down. We cannot entertain the practice —as it has been in the past—where oil sands companies go ahead with development while waiting for technology to catch up.

So give some thought to the possibilities and consequences of what it will mean, when we officially become the largest oil reservoir in the world. By leveraging this wealth through a made-in-Alberta carbon tax, we have a glorious opportunity to display our capability to be both a leader and a partner in the greening of the energy economy, despite our historical reluctance to accept such a dominant role.

The act of leadership Alberta and Canada need is to find the mix of policy, technology and clear government direction that will enable us to develop the oil sands responsibly. We will do so in a culture and context of environmental stewardship that will enable us to harvest and reap the wealth of our non-renewable natural resource without imperilling our planet, and without damaging the landscape that is going to be passed on to future generations.

The costs of the oil sands are measured in different ways: there is an economic cost that by its very nature includes the environmental cost associated with production and consumption. The well-formed criticisms notwithstanding, it should be pointed out that a democratic country and a democratic society has a broader, richer and deeper capacity to respond to environmental challenges than any dictatorship, simply because we must take public opinion, public pressure, citizen demands and citizen expectations into consideration when we shape our policy decisions. This, too, is Alberta’s singular advantage because it means that we as a society, a polity and as a government will be more open and receptive to new technologies, to new methods ensuring that we do not despoil our natural heritage even while we extract this important resource.

We are stewards of a $15 trillion resource (at today’s reservoir size), one that benefits us all. Do we have the courage and the vision to use it for the benefit of the planet? The option of abandoning the oil sands, leaving them shut in, would be an act of profound negligence. There are some strong Albertan and Canadian voices calling for the easy appeasement of walking away from “dirty oil.” Such abdication would be comprehensively wrong.

We can use the enormous wealth the oil sands can confer to build the common good. We can use it to pay for the transition to alternative energy, built on a platform of much greener hydrocarbon production. It is not at all paradoxical to think that developing this high-carbon-emission resource in a more sustainable way will in fact accelerate the development of the low carbon economy: by giving us the means to pay for it, by investing in both the research and development and the implementation of this greener future."

Satya Brata Das is the founder of Cambridge Strategies Inc., a consulting company based in Edmonton, Canada. He is a member of the Board of Canada 2020 and the author of Green Oil: Clean Energy for the 21^st Century? He can be contacted at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .