Western Canada Select (WSC) crude oil has been selling for less than $5.00 a barrel, and on Friday, WCS was listed at $2.87, according to CBC Canada.
Oil and gas producers have been cutting output and spending to cope with the fallout from sweeping measures to contain the spread of the novel coronavirus, including companies in Canada.
On Friday, Canada announced C$2.5 billion ($1.8 billion) in aid to help the industry, whose steam-driven extraction sites have borne the brunt of output cuts. The relief is targeted mainly at smaller companies and includes commercial loans worth C$15 million to C$60 million each offered by the Business Development Bank of Canada.
Renewable energy advocates say that the huge number of job losses and economic turmoil could be partly offset by taking a closer look at renewable energy. Shifting the energy sector’s focus to clean energy with energy-efficiency retrofits and other sustainable infrastructure could put hundreds, if not thousands of people back to work.
“There are very practical reasons it would make sense,” said Martin Boucher, of the University of Saskatchewan’s Johnson Shoyama Graduate School of Public Policy.
One reason staring everyone in the face is the uncertainty as to when the pandemic will be over, and another reason is the worry that oil prices may not recover sufficiently.
Oil producers who’ve run out of space to store their nearly worthless product “will be paying people to take away our resources,” Alberta Premier Jason Kenney said this month.
And while the COVID-19 pandemic has forced oil prices to record lows, we can look back to July 2008, when the price of WSC hit a record peak of $110 per barrel. However, the price of WSC has steadily declined since then. In February this year, before COVID-19 restrictions were put into place, WSC was selling for $27 a barrel.
The point is – once the coronavirus pandemic is over, the problems with Canada’s oil and gas industries will not magically go away. And that is why renewables make so much sense.
“Stimulus and recovery measures in response to the pandemic must foster economic development and job creation, promote social equity and welfare, and put the world on a climate-safe path,” Francesco La Camera, director-general of the International Renewable Energy Agency, said in a statement this month.
There are a number of things that can be started right now, like energy-efficient retrofits of homes and businesses – better windows or thicker insulation, says Boucher.
This type of work is labor-intensive and would be done by local contractors and businesses. Profits would stay in the community and homeowners would benefit from lower fuel bills. “These are simple approaches, but they’re domestic. They don’t put us in a situation where we’re overly exposed to the ebbs and flows of oil and gas,” Boucher said.
There is also solar, wind, geothermal and biomass energy from wood and crop waste that could all deliver government tax revenue and jobs. This is especially true of geothermal energy (GE). And guess where this energy is most abundant?
“The same place as the oil and gas that has paid the rent for over a century: right under our feet,” writes David Yager in EnergyNow.ca.
As Yager points out, GE comes from the same place we get oil and gas. and “the people and equipment used to exploit it are the same ones currently losing their jobs and their companies.”
It just makes sense to plan ahead because we are all moving toward a world less dependent on oil, so why not retool the oil and gas industry and put people back to work.
