Who should be the supplier of choice for the world’s 100-million-barrel-a-day oil needs? Should there be a merit order ascribed to producers?
We rank ballroom dancers and wannabe singers on television. Restaurants, hotels, videos, and even doctors are thumbs up and down on social media.
So why wouldn’t we rate oil-producing countries too?
For too long, self-appointed judges have demoted Canada’s oil and gas industry to the bottom of the world’s producer list, as if we’re some seedy hotel on TripAdvisor.
Anyone who’s traveled to oilfields in authoritarian countries knows we live in a world where environmental accountability and social responsibility are as rare as an honest dialog.
Canada’s oil and gas industry, the world’s fifth largest, ranks highly on many performance dimensions, including corporate governance, transparency, environmental stringency, and innovation. All these qualities are desirable amidst an unstable Middle East, a wily Russia, and an oil-addicted world struggling to achieve any sense of sustainability.
Yet, there are no smiley faces, thumbs or voting paddles on gas pumps in Canada. Even if there were, most citizens wouldn’t know who to vote for; a large portion of our country, mostly in the east, still relies on imports from foreign actors. Can you name them?
Thankfully, some credible institutions take time to evaluate countries by their virtues, or lack thereof. For example, every year Berlin-based Transparency International (TI) scores and ranks countries by perceived levels of public-sector corruption.
It’s always sensitive to broach the subject of ethics, but academic studies confirm that corruption and environmental delinquency are partners in earthly degradation. That’s not much of a revelation.
I don’t think we need an Ivy League professor to tell us that payola with a wink and a nod lets people get away with breaking the rules. Or that governmental lip service on international agreements doesn’t reflect what really happens on the ground in most countries.
Bottom line: If we are concerned about fundamental energy-related values—from environmental stewardship to security of supply to human rights—then rating suppliers by corruption matters a lot.
TI gives Canada top marks for low corruption. Among 28 oil-producing countries that fill almost 90% of the world’s oil tanks, the Great White North ranks number 2 (yellow end of spectrum on Figure 1). The only supplier that ranks slightly cleaner is Norway.
On the other (red) end of the spectrum are the most corrupt oil producers, not surprisingly anchored by actors like Russia, Nigeria, Angola, Iraq, and Venezuela. The scale of venality doesn’t get much hotter than that. In fact, only one-quarter of the world’s oil is sourced from jurisdictions that share any of the values we uphold in Canada.
We’re living in a contradictory world that says it wants to ditch the oil business and agrees to grand policies like the Paris Agreement. Yet the numbers stubbornly show that consumers are revving up usage of the fuel. Against this widening discrepancy, negative branding of democratic oil producers like Canada is leading divestment proponents to encourage the shutdown of the most responsible, transparent segment of the global industry. But this oil mitigation strategy harbors a misguided sense of morality.
There are only two large-scale, free-market oil suppliers in the world that are on the clean end of Transparency International’s corruption spectrum: Canada and the United States (Norway’s industry is state-owned). Yet, the pressure to divest from, entrap, and shut down the production in these countries is the most acute. Puzzlingly, Western-world arbiters who want to shut down the clean end of the global producer spectrum come from those same countries in North America and Europe that blindly buy oil from irresponsible producers (who are only too happy to rub their hands together and take market share from us).
New technology is demonstrating there is no shortage of inexpensive oil in the world, most of it buried under layers of negligence. Decades will pass before consumers kick the last empty oil barrel of their 100-million-a-day habit down the road. Until such time, the world needs more—not less—from transparent, accountable producers like Canada. It’s time we cheered for the likes of her. In doing so, we’ll be pushing the red end of the oil-producer spectrum off the supply curve.
Those who are quick to click “thumbs down” on the most responsible producers in the world implicitly give a “thumbs up” to suppliers that bear the least accountability or respect for the planet.