Yesterday, a new report from the governmental agency “Policy Horizons Canada” was obtained by the Globe and Mail, and quickly spread across the internet. I discussed the paper yesterday on my every-other-Monday spot in a segment of CBC’s The Exchange called E-Squared.

The Report, Canada in a Changing Global Energy Landscape, is a draft document speculating about risks to Canada’s future status as an energy “superpower.”

But it reads much more like environmentalist wishful thinking than as a serious effort to really evaluate risks to Canada’s future. Among other things, the report speculates that plummeting costs for renewables; imminent breakthroughs in electrical storage and electric car technologies; and reduced global demand could cause the price of oil to fall so low that it would essentially cease to be a global commodity. This is the current narrative of environmentalists, so-called green-tech investors, and some governments desirous of increasing central planning of the energy economy.

Ordinarily, reports like this would simply be round-filed as rank speculation, and in fact, the report seems to have been a draft, and does not list its authors, nor whether it had gone through any kind of robust review. But on a slow news day (Memorial Day in the U.S.), this particular report found a bit of traction.

The problem is, the report is actually somewhat dangerous. First, there’s a huge risk in wishful thinking. Actual experience, around the world, shows that these fantasies lead to high-cost, unreliable energy, and economic and job losses. Look no farther than Ontario where pursuing an aggressive green-energy/green-tech approach led to soaring power prices for Ontarians.

The other danger is that people will take this forecast more seriously than is warranted, and some investment in the private fossil fuel sector could well be re-directed into the governmentally mandated/subsidized green energy sector, while conventional power is left to languish, and become economically unsustainable due to the “free” energy from renewables once they penetrate the grid at sufficient levels.

The report is right about one thing, renewables will certainly grow as governments mandate and subsidize them. But conventional power will also grow to satisfy global demand for affordable, reliable power production.

And the findings of the Policy Horizons report flies in the face of forecasts by global energy agencies, which also have forecasts. For example:

• The US Energy Information Administration forecasts only a slight reduction in fossil fuel use through 2040, predicting that 80 per cent of global primary energy consumption will be from coal, oil, and natural gas.
• Canada’s NEB forecasts continued growth of oil production and export through 2040.
• The International Energy Agency forecasts a 12 per cent growth in oil production by 2040. Natural gas demand is expected to grow by 47 per cent.

In short, energy systems are massive, and being massive, they have massive momentum—they’re slow to change, requiring many decades for one fuel to replace another. The risks of believing in fairytale high-speed change is in not realizing the kind of economic wreckage that can ensue by trying to rapidly rebuild the energy systems that are the key source of our prosperity; that keep the lights on and planes flying, and that give us a quality of life that is the envy of much of the world.