Forget the Debt Crisis, What About the Energy Crisis?

I spent many years consulting in the oil industry.  I am very proud and impressed by what engineers have achieved (hitting an oil reservoir with a drill from 8km away in 1km of seawater is impressive).  I’m also a free market capitalist.  I invest and trade in the stock of companies including oil companies, pipelines and utilities that burn coal.  In general, capitalism is great: it creates innovation, wealth and choice.  But there’s a problem…

Actually there are two problems:

  1. Capitalism does not seem to work well when it’s allowed to exploit public assets (oil, potash, water,…).  Canada has been incapable of creating a royalty and tax regime that provides a fair share of income to Canadians.  Put simply, we are allowing private companies to profit from public assets (the oil in the ground belongs to Canadian citizens) without charging them a fair price for raw materials.
  2. What are we going to do when oil and coal are used up?  Where is our long-term (100yr+) national energy plan?

So what’s the solution?  I think it’s simple:

  1. Establish a fair royalty and tax regime for companies that mine fossil fuels.
  2. Take ALL royalty and tax monies from fossil fuels (i.e. the windfall that Canadians have received from our natural resources) and invest it in alternative energy R&D.

This will create a generation of alternative energy experts in Canada (I’d like my kids to have a job) and it will create post-fossil energy solutions so we don’t have to sit in the dark when the oil runs out.

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