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Keep oil in the ground?

Antil-oil activists can often be seen and heard urging governments to keep oil “in the ground.”

And that’s not just a rallying cry used by protesters here in Canada. Keep It in the Ground is, in fact, a global anti-oil movement, backed by heavily-funded organizations such as Greenpeace, the Sierra Club, Friends of Earth, and Earthjustice.

Photo Credit: The Canadian Press

When former US president Barack Obama rejected Canada’s Keystone XL pipeline, he used similar language, arguing for a need to “keep some fossil fuels in the ground.”

Obama’s comments are a bit more measured, noting that only “some” oil will need to be kept in the ground, but either way the issue is an interesting public policy question worth examining – how would our lives be affected if governments “keep it in the ground”?

What’s a typical barrel oil used for?

When we think of oil, most of us probably imagine getting an oil change for our car or filling it up at a gas station. We might also think of jet fuel for our upcoming flight to Toronto or Jamaica.

A majority of each barrel of oil that’s refined is indeed used for transportation. However, as you can see from the Canadian Association of Petroleum Producers diagram below, there are many other uses for oil:

Approximately 4% of the typical barrel of oil that’s refined is used to make asphalt for roads, playgrounds, parking lots, shingles and other uses.

Propane takes up about 2% and petro-chemical feedstocks and “other products” take up about 10% (we’ll touch on those purposes more in a moment).

Gasoline and diesel make up the bulk of oil products, coming in at 43% and 27% respectively.

Gas vs electric cars

Some Canadians think that we’ll all soon be driving electric cars.

It’s true that electric cars have grown in popularity. With Tesla leading the way, Nissan, Chevy and many other automakers have developed electric vehicles or have committed to developing such models in the near future.

However, electric cars still only make up a tiny share of the Canadian auto market – just 3.3% of auto sales as of Q2 2019. Of the 23.1 million light vehicles registered in Canada, only around 100,000 are electric (less than 1%). It should also be noted that about two-thirds of vehicles sold in Canada today are either trucks or SUVs; categories which have virtually no electric models.

No doubt many consumers would love the low electricity bills that often come with an electric car. However, there are still many problems associated with these vehicles. A February, 2019 CBC article notes some of the drawbacks:

  • Cost: Electric vehicles cost at least $15,000 more than comparable gasoline-powered models
  • Range: Most models can only travel 200km or less on a single charge
  • Charging stations: Drivers must plan road trips well in advance as there are far fewer charging stations than gas stations, and can be difficult to locate
  • Recharge time: While it only takes a few minutes to fill up with gasoline, it can take anywhere from half an hour to 14 hours to fully charge an electric vehicle
  • Climate performance: Canada’s coldest days in the winter can cause problems with electric car batteries, reducing their charge

Technology can evolve quickly, but it certainly looks as though the vast majority of Canadians won’t be driving electric cars for many years to come.

Even if we were able to purchase an electric car tomorrow, one can’t ignore the fact those vehicles are also dependent on oil. This Visual Capitalist article notes that approximately half of a typical car’s weight is due to plastics that are made from oil – click here.

Oil is also used throughout the supply chain to bring together the parts that are needed to build electric cars. Even the vehicle that delivers an electric car to your local Tesla dealership uses oil to get there.

To be clear, we’re not criticizing electric cars. But one can’t ignore the fact that if we keep oil in the ground, we simply wouldn’t have electric cars either. (If you’re interested in learning more about electric vehicles, hybrid electric and plug-in hybrid electric vehicles that are sold in Canada, we came across this CAA page with lots of good info on options for consumers– click here)

Heavy trucks and equipment

Passenger vehicles are one form of transportation that is still heavily reliant on oil, but semi-trucks and heavy equipment are even more dependent on oil.

Electric semis and other electric heavy vehicles are still in the prototype stage, with arguments over their viability still up in the air. Keeping oil in the ground would mean removing nearly half a million heavy trucks from the road in Canada, including commercial freight vehicles, Hydro trucks, fire trucks, and other vital forms of transport, industry, and emergency services.

Keeping those vehicles in park would halt the delivery of cell phones, televisions, clothes and groceries to local retail outlets. Keeping oil in the ground would also inhibit the ability of ambulances to deliver patients to hospitals, buses to drive kids to schools or fire trucks to put out the fire at the end of your street. Needless to say, there are countless other implications for society.

What about airplanes?

Looking to the skies, electric-powered airplanes don’t appear to be on the horizon in the near future. Keeping oil in the ground would mean an end to air travel – unless, of course, you took a hot air balloon or glider, but both of those vehicles would also likely use petrochemical materials (see below).

Large cargo vessels

Large transportation vessels, including container ships, are diesel-only, with no electric models in the foreseeable future.

If a product says ‘Made in China’, it was likely shipped over on one of these vessels. Fruits, vegetables and herbs also arrive via ship, including many we take for granted: bananas from South America, tomatoes from Mexico, garlic from China, etc. These imports become even more important in the fall and winter, when people still want a full range of fresh produce, but many of Canada’s farms are no longer growing it.

Electricity and heat

Oil and gas products are also used for electricity in many parts of Canada. This is especially true for many aboriginal communities that are in remote parts of the country. Citing Natural Resources Canada data, a 2019 Pembina Institute post notes that approximately 70% of large remote communities rely on diesel generators for power. According to the National Energy Board, approximately 45% of Alberta’s power comes from natural gas. (To see your province’s electricity sources – click here)

Many businesses also use natural gas for heat, to power their equipment and of course for cooking in the case of your favourite restaurant.

Daily products:

Earlier we noted that a portion of each barrel of oil is refined and used to make all kinds of products we use on a daily basis.

Ranken Energy Corporation notes there are over 6,000 products that consumers purchase that are made with oil. If you do a little digging, the results can be surprising.

Starting with your computer, cell phone or tablet – whatever you’re using to view this page – it’s safe to say it was only made possible due to petroleum products. The plastic components would have been derived from oil and of course it would have arrived in your hand thanks to diesel-powered cargo ships transporting it over from China or wherever it was made. A diesel truck would have delivered it to your local store and you may have even used a gas-powered car or diesel-powered bus to go pick it up. Even bicycles require oil for their plastic parts, grease for their gears and oil is even used to help make their tires.

The typical household offers many examples, and gives us a good idea of what would happen if we were to “keep it in the ground.” In the first place, plastics and other petrochemical materials are essential to the construction of homes themselves, being found in roofing, flooring, paint, insulation, wiring, plumbing, countertops, fixtures, panels, toilets, shower and bath stalls, appliances, and many other places, including the fasteners and sealants that hold it all together.

National Geographic hauled out all the items that were made with oil in a typical home

Once you move in, you’ll add furniture (many of which are likely upholstered with synthetic materials such as nylon), televisions, shower curtains, and blinds. Most household cleaners contain petrochemical products, and even the ones that don’t usually come in plastic bottles. Trash bags come from oil, as do recycling bins. Open the fridge or pantry, you’ll see plastic everywhere. It’s likely the same with the cupboards, especially if you have young children. As for the kids’ toys and video games? You guessed it. Plastic and more plastic.

But it’s the bathroom that likely holds the most surprises, including deodorants and antiperspirants, toothpaste, hair gel and hand lotion, soap, perfumes, lipstick, and nail polish. Spectacles and contact lenses are made from plastics, and even the mirrors might be made from acrylic or polycarbonate. And before you get dressed, check the tags on your clothes. Any synthetic fabrics, including nylon, polyester and spandex, are derived from petrochemicals. What would it be like to “keep it in the ground?” You’re better off not getting out of bed (assuming you have one, and it still has sheets).

Classrooms:

Classrooms are another place where oil plays a crucial role. Keeping in mind all the petrochemical materials that go into building a single house, you can just imagine how many it takes to build a whole school. Once things are up and running, though, you still need the pens and ink; the whiteboards and whiteboard markers; the glue, the crayons, the globes, the laminated charts, and all the binders that make learning possible. Computers, photo-copiers and printers? More plastic and more ink. Check the lockers, and most jackets, backpacks and other fashion accessories are made of synthetic fibres, not to mention the dyes that give them their bright colours.

Hospitals:

We’ve only looked in two places, and already we have a pretty good idea of what it would mean to our world to “keep it in the ground.” But of course there are all kinds of products that we don’t even think about in various industries.

For example, hospitals are highly dependent on oil. Plastics are everywhere in a hospital, from the flooring to the computers and medical equipment. Wheelchairs, syringes, latex gloves, bags for blood and IV drips: these are only the most visible examples of petrochemical products. In fact, Aspirin, antiseptics (including rubbing alcohol), bandages, antihistamines, cortisone, and many soaps include them as well. Plastic parts are essential to X-ray, MRI, ultrasound and other diagnostic imaging machines. The same is true of artificial hearts, prosthetics, dentures, and many replacement joints.

Hockey pucks, tents and chewing gum, oh my!

Petrochemical products are everywhere, and they are involved with everything we do. Even getting back to nature means bringing a tent and a sleeping bag, products which are made using nylon and other synthetic fibres. If you like sports, most equipment is plastic, including footballs, golf balls and hockey pucks. Even chewing gum needs an oil-derivative.

With all those examples in mind, is it a surprise that even anti-oil protestors can’t seem to go without oil?

Alternatives?

Make no mistake. As with individuals, some companies and other organizations are looking at alternative materials to lessen their reliance on oil. For example, the Danish toy company Lego is looking at switching to a plant-based plastic while last year, California paved its first road using recycled plastic waste.

Biodegradable, single-use water bottles and bags have also been introduced, as well as bamboo straws and reclaimed fabrics. As with electric-powered tractor-trailers, however, the viability of such projects is highly debatable, and in some cases they may do more harm than good.

Our civilization was built on invention and innovation, and there can be no question that new sources of energy are on the distant horizon. In the meantime, however, it’s important to be realistic and recognize our dependency on oil, and the miraculous technologies, breakthroughs, and ways of life its products have made possible.

Interesting links:

 

Research credit: Thank you to Harley Sims for help with researching this blog post and helping to put it together.

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Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.