Saudi Arabia is buying shares of Alberta’s oil sands companies. The ‘ethical oil’ argument is dead.

As I worked with a number of those mentioned in the article, couldn’t resist reposting this. Alykhan Velshi, a really bright guy, has of course in a further irony, ended up shilling for Huawei despite the overall Conservative suspicion of China:

When Norway’s massive pension fund announced that it had sold its positions in major Canadian energy companies like Suncor and Canadian Natural Resources, Alberta’s premier came out swinging. “To be blunt,” Kenney told reporters last week, “I find that incredibly hypocritical.” After all, he said, Norway continues to develop its own oil and gas resources, including the 2.7 billion barrels that are contained in the new Johan Sverdrup field that is already producing 430,000 barrels of oil per day.

For those of a less pugilistic orientation, Norway’s decision might be seen as a prudent act of financial diversification; one that Alberta could easily emulate if it wanted to. If Norway is already producing oil and benefitting from the tax revenue and jobs it creates, there’s no need for them to double down by also investing their one-trillion-dollar nest egg in companies that also depend on the price of oil. This isn’t a philosophy that’s particularly popular in Alberta, mind you, given Alberta Investment Management Corporation’s well-documented history of being more heavily exposed to the energy sector than other pension funds.

But while Kenney was quick to call out Norway’s alleged hypocrisy in selling their shares of oil sands companies, he has so far remained silent about the news that Saudi Arabia’s Public Investment Fund was busy buying them. As Bloomberg reported last week, it now owns 2.6 per cent of Canadian Natural Resources, and two per cent of Suncor, which makes it the eighth and 14th largest shareholder in the two companies respectively. Ironically, it also added to its position in Equinor, the Norwegian company that’s developing the Johan Sverdrup field.

As Premier, Kenney has been at the forefront of recent efforts to paint Canadian oil and gas as more “ethical” and therefore more worthy of investment. This narrative, which was first advanced by Ezra Levant, has been deployed most visibly in the conversation about the Energy East pipeline and the decision by New Brunswick’s Irving Refinery to buy its oil from Saudi Arabia rather than Canada. But Kenney’s affiliation with it goes back much further than that. It was his former director of communications and parliamentary affairs, Alykhan Velshi, who created the “Ethical Oil Institute” in July 2011, and his former executive assistant, Jamie Ellerton, served as its executive director between January 2012 and April 2013.

Kenney is hardly alone in his fondness for Levant’s narrative, though. Its core tenets—namely, that Canada’s legal, environmental and regulatory standards make our oil more inherently virtuous—are practically articles of faith in the oil and gas industry. In an interview with the Calgary Herald, Nancy Southern, the CEO of Atco and a founding member of the Business Council of Alberta, was quick to invoke it: “I think it is time for people to stand up and demonstrate true moral leadership about the fact that the world is better because of petroleum products,” she said.

But if Saudi Arabia’s oil is a conduit for its anti-democratic and values, as ethical oilers like to argue, then what about its money? That money comes from the sale of its own ethically-challenged oil. Suncor and Canadian Natural Resources can’t prevent Mohammed bin Salman or the Saudi Public Investment Fund from buying their shares, but those who have been more than happy to bang the drum about Saudi Arabia’s moral and ethical failings could speak up here.

So far, though, they’ve been conspicuously silent. Take Eric Nuttall, a fund manager with Ninepoint Investments and a frequent purveyor of the ethical oil narrative. In a recent tweet, he sounded positively delighted by the development, and made no mention of the ethical dimensions of Saudi Arabia’s money. “So much for Canadian oil companies not being attractive to foreign investors!” He wrote. “We are 100 per cent invested in Canada given highly attractive valuations and improving takeaway capacity and it’s interesting that Saudi Arabia agrees with us.”

In fairness to the industry, it’s hardly alone in speaking out of both sides of its mouth about Saudi Arabia. The federal government recently renegotiated a $14 billion deal that will allow the sale of Canadian-made light-armoured vehicles to the kingdom (a deal that was originally struck by the Harper government back in 2014). And MBS hasn’t been shy about using Saudi Arabia’s wealth to buy its way into companies and communities throughout the west, including a recent bid to buy the English Premier League’s Newcastle United football club.

But if Canadian oil and gas companies are going to accept Saudi Arabia’s money, it’s probably time for their proxies to retire arguments about the immorality of their oil. After all, as Jason Kenney will tell you, nobody likes a hypocrite.

Source: Saudi Arabia is buying shares of Alberta’s oil sands companies. The ‘ethical oil’ argument is dead.

Weaponizing the ‘paradox of prevention’

Interesting and relevant article by Max Fawcett:

Amid all the bad news being generated by COVID-19, it’s only human to try and find the silver linings. And when it comes to the current crisis, there’s a school of thought that suggests the lessons we’re all learning right now about self-sacrifice, social solidarity and mutual interest can be applied to the fight against climate change.

“We are learning, overnight, that simplicity isn’t necessarily austerity, frugality need not be privation, and that we can forgo quite a lot of our leisure and consumer entitlements if it serves some higher purpose,” The Intercept’s Charles Komanoff and Christopher Ketcham wrote in a recent piece.

With trillions of dollars of stimulus already sloshing through the global financial system, and more surely on the way, there’s even a hope that we can use this moment to build both a greener economy and a low-carbon lifestyle. “If our society can act, finally, to manufacture a million ventilators and a billion protective masks,” Komanoff and Ketcham suggest, “surely we can within a few years act on a far grander scale to erect, say, 1,000,000 wind turbines, insulate and solarize 100,000,000 buildings, carve ribbons of bicycle paths throughout our cities and suburbs, and so on.”

I wish I could share that hope. But I’m afraid that the opposite may turn out to be true, and the sacrifices we’re all making to limit the spread of coronavirus will only make it harder to do what’s needed to fight climate change.

That’s because there’s a catch-22 at work here, which is that the better we do at flattening the curve on this virus, the more people will question whether we ever needed to try so hard in the first place. As Emilie Mazzacurati, the founder and CEO of a California-based climate risk data firm Four Twenty Seven told Forbes recently, “if you do things right, it means you’re never proven right because you’ve prevented bad things from happening.”

In the comparatively genteel world of public health, this is sometimes known as the “paradox of prevention.” As the U.S. Institute of Medicine’s Harvey Feinberg noted in a 2014 presentation at the Johns Hopkins Bloomberg School of Public Health, there are a number of factors that stand in the way of efforts to prevent a negative health outcome rather than responding to it.

Some, like the long delay before rewards appear, and the fact that the benefits of prevention don’t always accrue to the person who paid for it, are unavoidable realities. Others, like the acceptance of avoidable harms as normal or conflicting with commercial interests, are reflections of our less admirable traits as human beings. But together, they make it far more difficult to take preventative action than it should be.

Those factors were on full display during a recent segment of Laura Ingraham’s television show on America’s response to COVID-19. In it, the Fox News provocateur called attention to the fact that the shortages of ICU beds and ventilators that public health officials had been warning about have yet to materialize. But rather than attributing that to the belated social distancing efforts that have been underway for weeks now, she blamed the models that informed them. “Americans should be furious about this,” she said. “This is a lot of money that we’re spending on a response that was based, again, on faulty numbers.”

The Toronto Sun’s Candice Malcolm also pulled on that thread in a recent column, arguing that “before we further destroy the economy and cause endless misery and suffering as Canadian businesses fail and families lose their homes, we should make sure the so-called experts we’re relying on have thoroughly double-checked their work.” And in an echo of her frequent criticism of anything to do with climate change and efforts to actually front it, she suggested that “the science is not yet settled on coronavirus.”

Indeed, for those who have made undermining the scientific consensus around climate change their life’s work, the disparity between the forecasted impacts of COVID-19 and its reality (so far, at least) will present an irresistible opportunity to cast further doubt on the wisdom of collective action and sacrifice. It will also serve as a template for how they’ll frame the efforts to fight climate change that are already underway.

Proactive climate policies, and the politicians who implement it, won’t get credit for the major hurricanes that don’t happen, the droughts that are averted, or the heat waves that aren’t as intense. They won’t get credit for the economic benefits associated with averting those outcomes either. Instead, they’ll get blamed for having warned people that they could happen in the first place—and for having spent money trying to avoid outcomes that never came to pass.

So how do we escape this paradox? When it comes to public health, Dr. Fineberg suggests using “multiple media channels to educate, reframe and elicit positive change.”

But as we’ve learned over the course of the Trump presidency, mere facts tend to get swamped by the hurricanes of bad-faith bluster that people like Ingraham and Fox News routinely whip up. Paying people to take preventative measures, and thereby effectively making prevention cheaper rather than free, is a more viable strategy, and it’s one that informs the push for carbon pricing. But as we may be about to learn with COVID-19, it’s hard to get people to respond to a threat when they can’t see its worst impacts—and when others insist on telling them they don’t even exist.

Source: Weaponizing the ‘paradox of prevention’