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Joel Kotkin: Biden, Trudeau choose green war on oil and gas over working class

Debut column: In the U.S. midterm elections, green obsessions could help the Republicans beat even attractive Democratic candidates

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Canadians, outside of dual citizens, can’t vote in America’s midterms, but the results may well shape the country’s trajectory in the years to come.

The current crisis around inflation, a probable recession, rising heating costs and electricity prices, with increases in Canada of upwards of 50 percent or more, as well soaring food prices are clearly shaped by global forces. But the economic crisis also has roots in the well-financed green movement’s war on fossil fuels. These turn out to be critical to such industries as manufacturing and logistics while the drive to ban natural gas based fertilizers constitutes a gun at the head at the farms that feed the world.

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By rights, this should be a time of enormous opportunity in North America. Canada is third in oil reserves in the world and fifth in production, while the U.S. now ranks first. In food production, the U.S. and Canada rank in top five of exporters. Yet despite this, both President Joe Biden and Prime Minister Justin Trudeau seem determined to fritter away this edge by embracing maximalist “net zero” energy policies. Deputy Prime Minister Chrystia Freeland reflexively sees Ukraine invasion as just another reason to accelerate renewables and wipe out fossil fuels.

True progressives interested in the working and middle classes should oppose this approach. Canada’s large energy sector, notes a TD Waterhouse study, helped shield Canada from the kind of “labour market polarization” that hit many regions in the United States. A radical shift to “green energy,” notes one research report, will likely accelerate class divergence in both countries. Already the Biden energy policies, which includes extensive bans on drilling on federal and offshore lands, has resulted in an economy that is $100 billion smaller annually than it otherwise would have been.

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Despite the jihads on fossil fuels in North America and the European Union, oil is still going to be a big business in 2040, growing virtually everywhere outside of the declining EU. In the U.S. in 2021, oil use grew four times the rate of solar and wind together, while global numbers show much the same pattern. Last year, notes analyst Robert Bryce, the increase in global hydrocarbon use equalled the output of all of the wind and solar projects on Earth.

The critical geopolitical question lies in where future energy will come from — largely unregulated, authoritarian countries like Iran, Russia, Saudi Arabia or Venezuela or still thriving democracies like Canada and the U.S.? The environment would be a clear loser when countries like Canada, with strong controls, is displaced by poorer, and less scrupulous, countries. Sadly, as environmentalist Michael Shellenberger points out, Biden seems to prefer getting oil from abroad than from North American sources.

Trudeau’s green fashion will not do much to enhance the country’s prosperity, anymore than what his American counterpart is doing. Canada’s manufacturing workers, who suffered grievously during Covid, are particularly threatened, as high energy prices, the goal of green activists, removes the incentive to locate in Ontario as opposed to less regulated places like Ohio or the developing world where the rich West’s energy jihad is increasingly scorned.

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This was evident in the fallout from Biden’s cancellation of the Keystone XL pipeline — which even Trudeau opposed — which cost 10,000 construction jobs in the U.S. and thousands more in Canada. The relentless drive to kill off fossil fuels the US threatens the roughly 750,000 high-paying jobs in the sector. It won’t impact directly the cognitive elites who now dominate “progressive” politics globally, but will inflict serious pain on  oil riggers, factory employees, or construction workers. According to Natural Resources Canada, roughly 600,000 Canadians, mostly outside the power centres of Ontario, work in or are dependent the oil and gas sector. Roughly 50-75 per cent of those workers are at risk of displacement through 2050, according to a TD Canada report last year.

In the U.S. midterm elections, green obsessions could help the Republicans beat even attractive candidates, like Ohio’s Tim Ryan who publicly embraces fracking but have also supported such measures as the Green New Deal. Democrats, and Canadian Liberals fail to understand that the renewable only “net zero” approach tends to raise energy prices, as seen in German, which before the current crisis among the highest electricity and fuel prices in the world.

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In California, the role model for many Biden climate policies, state policies have driven fuel prices to among the highest in the nation, putting millions on the edge of “energy poverty” and encouraging price-sensitive industries to leave the state. In contrast to the generally wealthy people who install solar panels or drive electric vehicles those in the less temperate and poorer interior suffer under what attorney Jennifer Hernandez calls “the green Jim Crow.” In Canada, current energy policies threaten the living standards of the roughly 6.5 million working class Canadians.

Rather than blindly mimic the homilies of the greens, countries need to prioritize both their geopolitical interests and the economic prospects of their own people. Clearly Canada is not particularly well suited for solar power; even in far warmer and sunnier Texas and California, a reliance on renewables has been directly tied to blackouts and brownouts. Indeed a modest increase in temperatures could even be a blessing in one of the coldest big countries on the planet — even as the widely predicted end of arctic ice has not yet occurred as expected — by expanding the area of productive agriculture. In contrast a one degree drop, notes a Frontier Centre for Public Policy study, would largely wipe out the farm sector.

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If the Democrats do badly in the midterms, we may see some continued, albeit modest, backtracking by both Biden and more rational European greens. Even ultra-green Germany, is now desperate to tap North American energy and is even considering fracking. Losses by Democrats who are moderates on fossil fuels could spark a reassessment of the party’s unpopular energy agenda. A shift to more pragmatic and realistic energy policies after November 8 could begin to shape a future where North America once again stands as a beacon of prosperity for the rest of the world.

Joel Kotkin is author of The Coming of Neo Feudalism — A Warning to the Global Middle Class, presidential fellow in urban futures at Chapman University, in Orange, CA and executive director of the Houston-based think tank, Urban Reform Institute.

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