Two posts on my Facebook timeline, one scroll apart, show just how bizarre the political economics of oil are these days.
In one post, a PC MPP from Ontario brags about how the Ontario
government has lowered gas prices. The other was a news article about
how Rachel Notley and the NDP government of Alberta will finally begin
reducing production in order to address the glut of bitumen that’s
currently driving oil prices down—that is, they’re trying to increase
oil prices. We obviously can’t have our cake and eat it too, being paid
high prices for crude oil and paying low prices for gasoline, and yet
that’s what our leaders are trying to do.
On the supply side
(Alberta), we’ve continued to over-produce bitumen despite the global
market already having a glut of lighter, cheaper crude; we’re fighting
the market every step of the way. The financial incentives were so weak
that Kinder Morgan wanted to walk away from their own pipeline, and
managed to convince our federal government to buy the unfinished
pipeline for several times its actual value. We paid it, against all
market incentives and at that outrageous price, so that someday we can
continue to over-produce a commodity that is increasingly not only
hostile to life on this planet but also increasingly unnecessary to our
society and entering its sunset phase.
Then on the demand side
(in this case, Ontario), the government steps in to artificially lower
gasoline prices even as the government of Alberta is stepping in to
raise oil prices. While most of the lower gas prices can actually be
credited to seasonal cycles in the cost of gasoline and lower global oil
prices, the conservative government (which historically would see
tinkering with markets as a sign of dreaded socialism) is taking credit
for setting the lower price.
So our governments have been
paying off oil companies on one side to keep the oil flowing, even
against market forces, until finally they have stepped in to reduce the
flow to raise prices—tinkering to fix their tinkering—while at the same
time tinkering some more on the other end to reduce gasoline prices. And
every step of this bizarre dance is funded by taxpayers and results in
bad outcomes for our climate.
You don’t need to be a
free-market fundamentalist to know that markets work in certain ways.
There’s a time for regulation and creating incentives to correct market
failures and address externalities. But that’s not what they’re doing
here, and it’s bizarre to see conservatives, who historically love
markets and hate government interventions into them, jump on the
command-and-control bandwagon to manipulate the market. It’s even worse
to see Liberal and NDP governments try to beat them at that game despite
continuing to talk the talk about addressing climate change and
transitioning to a clean economy. All of these parties are going against
their own principles to support the oil economy.
There are
alternatives, to these policies and these parties. A truly good economy
accounts for all of the costs of our products, supports our way of life,
and doesn’t mortgage our future—economically or ecologically. In 2019,
look for a vision for a healthy environment, society, and economy; and a
party that sticks to its principles.
Jeff Wheeldon is a former resident of Otterburne. He was the Green Party Candidate for Provencher in the 2015 Federal Election. He currently lives in Brighton Ontario.