Canada’s premiers are 100% right: Canada clearly needs to develop a national energy strategy. But where the premiers are 100% wrong is in how they define what a national energy strategy is.
Unlike most efforts now under way in Canada, a national energy strategy is not about exploiting the country’s vast resource riches. A national energy strategy is not about promoting specific actions, such as developing the oil sands or pipelines. It’s not even about expanding development of renewable energy sources or advancing efficiency standards. Overall, an energy strategy is not about what can be done or – in the eyes of some observers – should be done.
Instead, an energy strategy is a long-term and adaptive framework for guiding decisions about energy development and delivery. It is a deliberative process that encourages involvement from all key stakeholders and gives each a legitimate role in addressing the tradeoffs that are key to the decisions at hand. It is a way to organize information and dialogue about energy options and consequences. And it is a way to structure choices about energy in a manner that facilitates, and more efficiently incorporates, learning over time.
A good analogy for an energy strategy is that of an individual’s financial investments. Different people have different objectives and tolerances for risks. So it makes sense that investment strategies will differ across individuals. Likewise, an individual’s investment strategy is sure to change over time. It’s perfectly normal, because of a wide variety of internal and external factors, that a target for investment today may not necessarily be one tomorrow.
When it comes to a national energy strategy, take the people in the example above and replace them with provinces. Now, take the targets for financial investments (e.g., stocks and mutual funds) and replace them with elements of a national energy portfolio (e.g., oil and gas, hydro, renewables, efficiency upgrades, etc.).
Just like the support a financial planner gives to clients, an energy strategy is also specific to the objectives of the decision makers. An effective energy strategy should inform choices about the desired level of investment in each element of an energy portfolio, where these investments should be made geographically across Canada, and the signals or tipping points that will trigger reallocation of funds and attention from one resource to another over time. Likewise, a carefully crafted energy strategy will help people – policymakers and public alike – to ask and answer questions about the level of risk and uncertainty that they are willing to tolerate.
In the end, what will truly differentiate Canada as a world leader when it comes to developing a national energy strategy is the recognition that a focus on a single energy development approach – or even a bundle of approaches – at a single point in time is not the answer.
Moreover, a successful and transformative made-in-Canada energy strategy will be one that goes well beyond simply providing a menu of energy-related offerings (which, incidentally is what today’s “national energy strategy” actually is).
Instead, the real need when we talk about a national energy strategy is to provide people with a mechanism for making a series of difficult and interrelated choices over time. Only through this kind of approach will the country begin to move past the stalemate that arises when ideology trumps ideas and analysis. Viewed in this light, the real product of a national energy strategy is not a particular outcome. It is a more sensible, credible and defensible decision-making process.
(A version of this post first appeared in The Globe and Mail.)