The Need and Will to Change: The Lessons Alberta can learn from Cape Breton and Research in Motion

In 1997, Apple was a company that was on the verge of bankruptcy.  It was not Palm. It was not Research in Motion. While, Steve Jobs had returned to them and they were going to get an investment from Microsoft, Apple was seen as yesteryear’s company: one that should have been put out of its misery. For Apple reminded us of the emergence of the personal computer in the 1980s; a firm whose products were destined to be put in museums and not one which could lead a generation of change.

 

Consequently, it is not a surprise that my first “personal digital assistant” (PDA) came from Palm and that was in 2002. At the time, the Blackberry had not become ubiquitous and we had choices. Microsoft, Samsung, Motorola and RIM all had competing PDA and/or cellphone software and choosing any digital device was a complicated piece of calculus. Was the device cool enough? Did it have all the features you wanted? Would the phone last for a few years? We didn’t really think about whether the company would be around later because the idea of interoperability with devices wasn’t important. All that was important was simple: would your phone link you to your digital tribe? That is how we decided on a device.

 

This was before 2005; this was before it all changed. This was before Steve Jobs turned Apple into a Phoenix. This was before Google bought Android in 2005 and before Google brought the first android device to market in 2008. This was before 2007 when rumours emanated from Apple about a “Blackberry killing” phone device. This was before Apple and Google would literally push out every other mobile software solution through uniqueness, innovation, market service and brand loyalty.

 

This story is just one example of what happens in our capitalist society. Products come and go but the level of our comfort increases. Think of coal. In 1720, Cape Breton started to mine coal. Those mines created a local steel industry and both Nova Scotia steel and coal helped to power industry in both Ontario and Quebec. Now this, to be sure, was not unique because various raw resources – including Alberta coal – did the same. The big difference was that coal mining was the heart and soul of Cape Breton. With the loss of coal, steel would fall too. So today, Cape Breton doesn’t mine coal. Some of the mines closed when the Mulroney Government cut subsidizes. The rest would close thereafter. So by 2002, Cape Breton didn’t mine any longer.

 

Cape Breton coal was replaced by other sources including Western Canadian Natural Gas and Oil. Today, Cape Breton still exists but its economy has changed. Today, it is a place where fishing, forestry, tourism and agriculture rule. With that being said, the present economy cannot sustain all of its residents. So when the mines started to close, the people started to leave. This is despite the fact that there is still millions of kilowatts worth of coal in Cape Breton. Yet through this drastic change, the Canadian economy has grown. As Canada has taken down coal plant after coal plant, the Canadian economy has grown.

 

So just like Apple and Google displaced other software providers, society can change its energy source.  In the 1500’s, Western society was powered by candles. Then we moved to Whale Oil, then Kerosene, then Oil and then Natural Gas.  So it is not too hard to imagine that Western Canadian Natural Gas and Oil will be displaced itself. The difficult thing to imagine is that Western Canadian Natural Gas and Oil might be displaced within the next twenty years.

 

However, Norway is of the opinion that this will happen. Norway has an Oil and Natural Gas industry of their own. They have taken the approach that Oil and Natural Gas recovery is a dying industry. Part of the reason for this is because they have seen the changes in the European Market. In Europe, the Oil and Natural Gas industry has to pay up to $30/tonne on carbon taxes or carbon pricing schemes. The reason is simple: Europe is decarbonizing their economy. This might seem like a crazy trend but it isn’t. Europe, South America, China and the Caribbean are all on this path. The US, for market reasons, is also going down this route.

 

With this in mind, Norway has decided to lead and not follow. This is one reason that StatOil left Alberta. For, it was easier for StatOil to meet European and Norwegian CO2 emissions goals by divesting its Alberta Oil Sands assets. Furthermore, StatOil has moved to embrace the new “worldwide” reality. StatOil is pushing itself from being one of the largest offshore oil drillers to become one of the largest offshore wind energy firms.

 

However, StatOil is not the only firm to embark on fundamental change. After spending billions of dollars on the Volt and Bolt, GM – alongside Honda and SoftBank – purchased (and has subsequently invested billions of dollars) in a self-driving car company called Cruise. Now known as GM Cruise, this enterprise has only one mission: to develop a fleet of self-driving GM-built electric cars, EV Bolts.

 

To see the potential of GM Cruise, let’s first look at Car2Go. Started in 2008, it is a Daimler business unit and it now has 2,500,000 registered members, a fleet of almost 14,000 vehicles in 26 locations in North America, Europe and Asia. In Calgary alone, it has begun to redrawn the way that people use cars and has allowed people to have a choice as to whether they will buy a car. Daimler is only one company in the carshare/rideshare space that has found a way to commoditize care ownership. Instead of being looked in to a huge capital costs or deciding whether to pay $200 to $500 per month (i.e. $20,000-$50,000 plus interest, insurance, gas, incidentals, repairs and other monthly fees; all one has to decide is whether to pay is a small membership fee and a per use fee. This type of change in the car ownership model has ramifications for Alberta.

 

Just imagine if in five years, Daimler decides to electrify their Car2Go subsidiary. They would have the clout to adjust the way that a city or society uses their product. Daimler has the ability to speak to bankers, investment bankers, stockbrokers as well as bond and stock investors. They could fund the change city by city, billions of dollars at a time. Daimler and the Car2Go already negotiate with governments to make changes to bylaws, regulations or laws. Daimler and the Car2Go have the clout to build charging stations or convince existing retail gas retailers to do the same. We know all of this is possible because Daimler, Ford, Chrysler, GM and their predecessors and competitors all had a hand in reshaping society after WWII.

 

What some in Alberta refuse to see is a simple truth: radical change is coming again. Inside or outside Calgary, we are all becoming familiar with electric cars. I have seen various Telsa models on the streets of Calgary and recently saw a GM Spark when I was in Canmore. That GM vehicle wore Saskatchewan plates. Dramatic change is coming and geography is not going to stop it.

 

China, as an example, is starting to get a hand on its emissions. To do so, they are driving their economy to do everything at once. As of 2017, China had 1.23 million Electric Vehicles (EVs) in use.  By 2020, they aim to have 5 million EVs and China has vowed to become the largest producer of EVs moving forward.

 

At the same time, they are decarbonizing their economy in various ways. By 2020, their coal fired power plants will be required to meet a new carbon “ultra-low emission” standards. The Centre for American Progress notes that these new standards are so high that by 2020 “every coal plant operating in the United States would be illegal to operate in China.” On top of this, China is working on carbon capture and storage (CCS) technology, reducing carbon production in construction, cement and steel manufacturing as well as moving towards natural gas and renewables in their electric grid. Or put differently, 1.3 Billion people are moving quickly to reduce their carbon footprint.

 

However, China is not the only country making this massive change. Over 40% of Mexico’s electricity comes from burning oil and less than 10% comes from renewables. However, Mexico is slated to change that. By 2021, Mexico – another oil exporter – would like 30% of their energy to come from renewables. That should increase to 35%, by 2024. Lastly, Europe is pushing an equally ambitious plan:

 

  • At least 40% cuts in greenhouse gas emissions (from 1990 levels)
  • At least 32% share for renewable energy
  • At least 32.5% improvement in energy efficiency

 

This is one of the reasons why starting in 2025, European cities, countries and territories will be officially banning the purchase of new internal combustion cars.

 

Consequently, Alberta should recognize that the market for Oil and Bitumen will continue to decrease, while the need for energy increases. Norway sees this trend. Consequently, they are unleashing their $1 trillion oil fund to put billions of dollars into wind and solar power projects, while Saudi Arabia oil fund is selling off the last of its oil and gas assets. (Historic breakthrough’: Norway’s giant oil fund dives into renewables, Damian Carrington, the Guardian, 5 Apr 2019). The world is changing.

 

The world is changing and we have the ability to see it happening. Research in Motion wasn’t as lucky. They invented the smartphone and had its dominant position. Given the speed of the technology space, one can understand how Google and Apple could have overcome them. However, we are lucky, we can see the worldwide trend.  Albertans can avoid the fate of Cape Breton, Detroit or Appalachia. We can see the change coming and change course. We can see that most of the world is moving to a place where by 2030 or 2035, 25-30% of the world’s energy will be generated by renewables.

 

So I propose that Alberta and Canada should be proactive. Just as Syncrude was saved from bankruptcy by Alberta Premier Peter Lougheed, Ontario Premier Bill Davis, Prime Minister Pierre Elliot Trudeau and (at the time) Minister Chretien, we can invest in our energy sector. Just as Alberta’s Social Credit Government provided grants, funding and other benefits for Suncor, we can diversify Alberta. Government Largesse, coupled with private capital, created Alberta’s Oilsands Industry. It is time to do what is best for the largest and smallest number of our society; it is time to use our best resource – our human resources – to create our next few industries and amaze the world again with our ingenuity, resourcefulness and bravery.

 

Alberta doesn’t have to make the same mistake that Cape Breton, Detroit or Appalachia made: we still have the time ability to change: will we have the leadership?

One thought on “The Need and Will to Change: The Lessons Alberta can learn from Cape Breton and Research in Motion

  1. I think your conclusions are spot on. Alberta needs to wake up big time, and as a Nova Scotian with family in Calgary these past 40 years and who has visited there many times, the navel-gazing attitude of Alberta has never failed to amaze me. Nowhere else matters except Houston TX. With Emperor Jason 1 now happily esconced, what’s the likelihood that cutting back the “oil” industry is about to happen in Alberta? Before even the climate changes really drastically, which it seems to be doing now? Religious mumbo jumbo that god will provide overrides common sense.

    Therefore, good luck in raising awareness in Alberta and with more luck, before we all drown in higher seas on the coasts and Great Lakes, or inhale too much smoke from wildfires in your neck of the woods, perhaps you can change attitudes there and provoke change. You have awoken from the slumber all around you and noticed some basic truths. That is all to the good. As I’ve mentioned before, it’s a decade too late for being of much use, but two stars for trying to ignite a wet match in the dark.

    Have you been to Cape Breton recently? I ask this, because if you had, perhaps, just perhaps you might have noticed that they are still mining coal in Cape Breton. Bang goes your headline! Your rather lofty tone attempts to disguise, in my view, your lack of knowledge. I’ve had 52 brilliant ideas, so what have you peasants done for the world? And in this case, you attempt to use Cape Breton as an example of what could happen if Alberta doesn’t wise up.

    Yes, coal mining stopped in CB in 2002, but it has been revived. Shades of the Donald.

    https://www.cbc.ca/news/canada/nova-scotia/donkin-coal-mine-cape-breton-1.4003452

    The scenario in Alberta might well follow a similar trajectory. Shutting down the oil industry, only to discover that people still pine for the “good old days”, and then someone appears with a promise and some electric shovels to heap tarsands on a conveyor belt for processing, and all logic goes out of the window. The way the average person sees it, a reasonable paying job trumps doing nothing, and to hell with the consequences. “They” will look after it. The ecological ruination becomes part of the background noise, and everyone forgets about it until one day disaster occurs.

    One thing I can say for sure, although it’s a personal opinion. Cape Breton is a far prettier place than Alberta, so tourism works. Having done the Lake Louise and Jasper National Park thing, having visited the Peace River region when hiring a forester thirty years ago, and driven across miles and miles of featureless countryside, the lack of vigorous varying flora in Alberta makes me pine for a greener place with hills, dales, glens, pretty farms, fishing villages and luxurious flora. On a fine summers’ day, CB is magic. The forester from Peace River told me as we stood in a CB wood on a hot June afternoon shortly after his arrival, “Wow, you can almost hear things grow!” Well, we are a lot further south, so that helps. The distorted weather maps show Atlantic Canada at about the Arctic Circle, but Halifax is almost 400 miles south of Calgary.

    It’s not as if CB and all Nova Scotia haven’t desperately tried to diversify for the last sixty years, once Hawker Siddeley began to withdraw from cola and steel, and that everyone then stood around doing nothing. We had Toyota and Isuzu assembly plants, and the Clairtone TV and hi-fi factory all in the 1960s. They didn’t last. Volvo in Halifax lasted 35 years before Ford pulled the plug after buying Volvo.The very same things you wish Alberta would do by way of diversification were tried, and have been tried.

    So far, not much luck, and I wonder if Alberta would fare any better, frankly, once the “oil” was done, and the greedy foreign petro companies had decamped. Far more likely to turn into the somnambulance of Saskatchewan and Manitoba. Far more likely that Canada as a whole will turn into a place for climate change crisis refugees than become a technological powerhouse. And Alberta still needs to figure out what it’ll do for fresh water once the glaciers completely disappear from the Rockies. At the moment, the bulk of it is wasted in tarsands production, and hundreds of square miles lie in tailing-pond ruin. Cape Breton has cleaned up its Sydney tar ponds and old industrial plants, and the desecration of coal mining is hidden in deep underground rocks. Alberta has $260 billion in unfunded liabilities for oil and gas well cleanup. Cape Breton is mostly clean. Wind power provided 19% of the province’s electricity last year, and if NL gets its hydro running as promised, we’ll be doing well in the renewables stakes.

    My efforts to promote the decentralization of big business buildings from central Halifax in the 1990s got nowhere. The upper management types of various companies wanted to hobnob over lunch and dinner, so tens of thousands of worker drones still commute to a crowded peninsula and its office buildings and armed forces bases every day for no good reason, simply because the big knobs want to congregate and tell each other what wonderful people they are. It’s ridiculous. But that never stopped big egos.

    Please check your facts before holding up a place as an example, when your knowledge is obviously lacking. Energy is measured in kilowatt-hours. A kilowatt is a measure of power, like horsepower. Getting that basic idea through people’s heads I’ve spent a lifetime trying to correct. “You know what I mean” isn’t an excuse.

    “In the 1500’s, Western society was powered by candles”, you say. Are you serious? Even with tiny populations by today’s standards, the forests were being cut down wholesale to make charcoal and sailing ships. Wood was used for heating. Then the change over to coal came next. Whale oil? You must be joking — it replaced candles. I am a retired engineer with a keen interest in engineering history, so know my stuff.

    Cape Breton has NEVER been powered by Western natural gas and oil. It simply doesn’t come here, never did. Gasoline is imported by sea-tanker from the US ever since the Imperial Oil refinery shut down in Dartmouth. And until it recently ran low, our natural gas came from Sable Offshore gas. Now, it’s about to be backfed from the North Eastern US.

    Sir, please learn some history and assemble some real facts. You run the risk of being a mere pontificator, and that limited to the region called Alberta. BTW, Carbon dioxide sequestration in Canada is led by the Shell Oil Quest plant in Alberta – google it.

    Like

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About 52ideas

Here are my 52 Ideas. What are yours?