The false gods that are Alberta’s oilsands – by Thomas Walkom (Toronto Star – February 21, 2013)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

A new study uses an old theory to show that Alberta’s iconic oilsands have clay feet.

Alberta’s oilsands have iconic status in Canada. They are magnets for foreign capital and sources of great wealth. They are credited with keeping this country’s economy alive in the midst of a global slump.

Politically, they symbolize the new Canada — one governed by a prime minister determined to encourage resource extraction at the expense of virtually everything else. But as Albertans are discovering, the icon has feet of clay. Even a brief hiccup in the oilsands boom has sent the province’s finances into a downward spiral.

And the future remains uncertain. Suddenly, the politics of climate change have made Alberta’s carbon-emitting bitumen less welcome in the United States. More to the point, technological changes that favour the production of cheaper shale oil and gas, are transforming the U.S. from an energy pauper into one of the world’s big petroleum players.

To put it another way, Canada’s biggest export market no longer needs the tarsands quite as much as it did. Into this mix comes a new study that tries to make sense of the oilsands phenomenon.

Actually, The Bitumen Cliff is an oldish new study in that it uses the classic work of political economist Harold Innis, one of the first to undertake a systematic analysis of what makes the Canadian economy tick.

To Innis, Canada’s history was dominated by natural resource exports, which he called staples. That Canada has exported raw materials is hardly novel. What Innis grasped, however, was that these staple exports created a pattern of development, both political and economic, that over time was hard to escape.

To use the language of one of his students, the Canada that Innis described kept enmeshing itself in a “staple trap.”
Vast quantities of money would be spent (usually by government) on infrastructure needed to extract whatever resource was in demand. And then, suddenly, things would change.

Maybe the commodity would fall out of fashion — as did felt hats made from Canadian beaver pelts.

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