When the expert met with different gulf ministers, they presented energy pragmatism and long-term ambitions that were far more ambitious than those of western countries, he said.
Canada should learn from countries like Qatar and Saudi Arabia and become as green and wealthy instead of demonising its oil and natural gas industries, an expert said.
Qatar has grown its gross domestic product (GDP) tenfold, amassed a sovereign wealth fund worth more than $450 billion, and used the revenue from its liquified natural gas (LNG) to build brand-new cities with infrastructure that is the envy of the world, or at least most western countries, said Eric Nuttall, a partner and senior portfolio manager at Ninepoint Partners.
The feat, carried out in just 20 years is largely owed to its vast natural gas reserves and ability to commercialise them via liquefaction, Nuttall penned in the Financial Post, adding that the contrast between then and now is striking for a nation that battled to be economically viable for 60 years after the decline of the pearl diving business in the 1940s.
Posing the looming question of the report, Nuttall asked whether there are any lessons that Canada can soak up from Qatar, Saudi Arabia, and other Middle Eastern nations given that the Canadian government is about to reveal the specifics of its long-term vision for its oil and gas sector, affecting its 202,000 employees and investors alike?
The articled was published as the Canadian government readies to reveal the specifics of its long-term vision for its oil and gas sector, which impacts its 202,000 employees and investors alike.
Nuttall argued that instead of “vilifying” oil and natural gas industries, Gulf nations are promoting them to expand their economies and gradually diversify away from reliance on hydrocarbons while making large investments in alternative energy.
“Could Canada and the environment be better off adopting a similar all-of-the-above strategy instead of its current either/or approach?,” he asked.
The expert he met with different ministers of states, including Saudi Arabia’s Prince Abdulaziz bin Salman and Qatar’s energy minister whom he said presented energy pragmatism and long-term ambitions that were far more ambitious than those of western countries.
Offering a critical analysis, the expert explained that while Middle Eastern ministers talk about energy diversification, circular carbon economies, and the critical need to increase oil and natural gas production in order to meet the demands of a growing global population, western government officials frequently discuss “just transitions,” emission caps, and the end of oil.
Hearing how oil and natural gas earnings would eventually enable entire economies to change, you can’t help but share in the ministers’ joy, Nuttall added.
For instance, Saudi Arabia is constructing a 170-kilometre-long, nine-million-person city in the currently desolate desert using only oil cash. The city will be totally powered by renewable energy and is just one of 15 giga-projects now being funded by hydrocarbons in the kingdom.
“When was the last time you heard of even one such bold infrastructure project in Canada, the United States or Europe?” he considered.
Qatar and Saudi Arabia, like Canada, seek to expand their economies, improve the standard of living for their people, and eventually diversify their economies away from being overly dependent on the supply of hydrocarbons.
However, these Gulf countries are also concentrated on the long-term need to establish an energy mix that includes more renewable energy, while being big hydrocarbon producers, Nuttall said, highlighting a considerable difference in how these objectives are approached.
“Perhaps this is due to the Middle East’s geographic proximity to China and India, each with populations of 1.4 billion people, which gives them a better global perspective of the likely structural long-term growth in hydrocarbon demand,” he penned.
Or an alternative analysis, could be the lack of four-year election cycles, which makes it easier to plan long-term strategies and eliminates the need to exploit the oil and gas industry as a political issue, he noted.
By 2030, Saudi Arabia, the second-largest oil producer in the world, wants to have between 45 and 50 percent of its energy mix come from renewable sources.
In an interview with a Singapore-based outlet filmed during his Asia tour in August, Qatar’s Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani echoed those thoughts, saying “energy will remain a very relevant, cleaner, and more reliable source for a longer period, because we see that it is the best alternative and the more realistic alternative towards transition”.
“Now is it going to be a total substitute of fuel? It will take over gradually and we have seen this happening in different countries in the world, but we don’t know when is the time where it will be the substitute,” he said.
Speaking on the “energy poverty” colossal that has unravelled in the last few years, the foreign minister said “this was due to a lot of things,” adding that “the policies that have been adopted to transform to green in an aggressive way which sometimes is not realistic.”
The long-term strategy of the Canadian government for the oil and gas industry could benefit from adopting at least part of Qatar’s and Saudi Arabia’s energy realism, Nuttall claimed.
There is a long-term “positive” outlook for oil and natural gas demand with population expansion of more than one billion people in the next years in areas of the world that desire to attain Canada’s very high hydrocarbon-intensive lifestyle.
“Why is it that Qatar, a country that embraced its LNG industry, has nearly three times the number of doctors per capita than Canada?” he expanded.
Canada can increase its oil and natural gas production while maintaining the highest environmental standards possible. It can help meet the needs of the world while earning revenue, making necessary incremental investments in its national infrastructure, and expanding environmental programs like carbon capture and storage, Nuttall said.
“As I drove the streets of Doha, I couldn’t help but think, ‘This could have been us’.”