In response to the letter on Oct. 22nd, 2020 — which posed the question “Is time running out for Newfoundland and Labrador oil and gas?” — the Coalition for a Green New Deal NL suggests now is a good time to take stock of what global financial experts are telling us about the future of the oil and gas sector and what this could mean for our province.
There has been an incredible amount of research and development on green energy in recent years. Wind and solar electricity are already cheaper than fossil fuel-powered electricity in 70 per cent of the world. Experts predict that this will be the case for 100 per cent of the world within five years. Reputable sources, such as Bloomberg and the Financial Post, have reported on this. The latest financial news also indicates that electric vehicles will be as cost effective to manufacture as gasoline-powered vehicles by 2024. All these factors will significantly shrink the market for oil in the coming years.
Federal Natural Resources Minister Seamus O’Regan recently stated that the Newfoundland and Labrador oil sector would not be struggling if the global price of Brent light crude oil was $60 to $70 per barrel. However, our own provincial government has budgeted $39 a barrel for the next three years, recognizing that the global price of oil will not be enough in the coming years for oil companies to make a profit off our product. We see the effects of this in projects, such as the West White Rose extension, being placed on hold, and the mergers of companies such as Husky and Cenovus. Oil companies will be far more concerned with the price per barrel of taking oil out of the ground going forward. Newfoundland and Labrador is far from the lowest-cost jurisdiction in this respect, so in reality, the prospects for a full recovery of the oil sector are bleak.
Wind and solar electricity are already cheaper than fossil fuel-powered electricity in 70 per cent of the world.
While our leaders predict that our “clean oil” will be in demand, we must remember that this is a “greenwashing” ploy by oil companies to encourage the continued purchase of oil. The majority of emissions from oil do not come from taking it out of the ground, but from burning the oil after. There is very little “green” in oil extraction, in Newfoundland or elsewhere.
Our focus at this point should not be on giving money to oil companies to recover shareholder value. Rather, we must ensure that we use any public money for a fair and just transition for displaced oil workers. The Memorial University of Newfoundland Faculty Association (MUNFA) recently suggested that this should include support for oil workers who want to start their own renewable energy or environmentally sustainable businesses; transitions to retirement where appropriate; and offering free tuition at public institutions to oil workers who want to retrain.
Additionally, this transition must include jobs that pay a living wage. The creation of millions of green energy jobs globally is on the horizon for the coming decade, as countries move from fossil fuel-based energies to new energy grids that use wind and solar power. Oil companies have paid their CEOs up to 75 times as much as their average workers. We cannot allow the same thing to happen as green energy companies arrive on the scene and expand.
We know that scientific and economic models already exist for a 100 per cent clean energy economy. Implementing this in Newfoundland and Labrador requires investment in green energy research and development. This is important for job creation and fostering business startups.
It may already be too late for Newfoundland and Labrador oil and gas, but it is not too late to help our displaced workers and diversify our economy. A healthy economy is not possible without a healthy environment and fair treatment for industry professionals. Moving forward into a future beyond oil is the only way for our province to become a happy, healthy and sustainable place to live for generations to come. Holding onto the old ideals of oil does nothing but hold us back.
Heather Elliott, member
Coalition for a Green New Deal NL
