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Peace, love, energy

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Peace, love, energy

The Canadian Energy Executives’ Association (CEEA) had its annual business conference recently in Banff, Alberta. The members are mostly oil and gas executives, or other business leaders supporting the oil and gas industry.  The motto the CEEA has chosen for its events this year is “Peace, love, energy,” which is apt, given the benefits hydrocarbons give us all.

I don’t know how the Association ended up selecting those three values for its motto, but here is my explanation of their relationship to oil and gas—and why we should appreciate the industry for all it does.

Energy of course is obvious: oil and gas companies are the main producers of the energy that powers industrial production of the goods that our survival and well-being depend on, transportation of those goods—and of us, heating and cooling of our homes, offices, schools, and hospitals. Oil and gas provide about 60% of world’s energy needs today.

What may not be obvious or well known is the fact that oil and gas are reliable, plentiful, and cheap sources of energy that together with coal (which provides about 20% of world’s energy) have facilitated increased productivity and prosperity around the world.

What also may not be clear, given the wide-spread climate alarmism and governments’ continual subsidies to producers of renewable energy (wind and solar), is that besides nuclear power, scalable, reliable, affordable substitutes for oil and gas do not currently exist. If we were to give up—or worse, to ban—oil and gas (and coal) energy now, we would plunge back to the pre-Industrial Revolution poverty and misery.

We have the oil and gas industry to thank for much of the energy that we can so easily, reliably, and affordably access today.

But what does the oil and gas industry have to do with peace and love?

Peace and love, or benevolence among people, are fully possible only in one kind of social system: capitalism. By capitalism I don’t mean the current mixed economy, but a true laissez-faire system where the government plays no role in the economy. It was defined by Ayn Rand as “the social system based on the recognition of individual rights, including property rights, in which all property is privately owned.”

Such pure capitalism was approximated in the 19th century in the United States when it was the freest country (in terms of individual rights and free markets) in the world. In that period, it also grew from a poor country to the most prosperous. This growth was driven by profit-seeking inventors and companies that were incentivized by the protection of their property rights. It was this capitalist environment that made possible the modern oil and gas industry, which has helped power economic growth and prosperity ever since.

Notably, the 100-year period in the 1800s (after the Napoleonic wars ended) was the most peaceful period in world history. It could have been even more peaceful, if more countries in the world had recognized individual rights and embraced capitalism. The peace would have continued, had individual rights been upheld and not eroded, as started to happen in the United States. Rights-respecting countries do not initiate aggression towards others.

The rights to liberty and property are no longer fully protected in the United States and even less so elsewhere, including in Canada. Yet, to maintain peace and facilitate benevolence that stems from voluntary co-operation and trade, protection of individual rights—capitalism—is needed. It is capitalism that would ensure thriving oil and gas industry, benefiting us all.

Instead, the oil and gas companies are increasingly under attack. The attackers are climate alarmists who don’t acknowledge that cheap, abundant and reliable energy protects us against dangerous and unpredictable climate (read Alex Epstein on this topic here). The other threat is governments, such as that of Canada that wants to shut down the entire oil and gas industry. Add to this the media that have abandoned objective journalism and spread climate alarmism.

The Canadian oil and gas companies are not defeated by these challenges. I was very glad to read in a National Post column that the atmosphere at the CEEA conference was upbeat and that the companies are poised to defend themselves with the positive message about all the benefits the industry provides that make human lives better. Another cause for optimism is the fact that Alberta’s provincial government has developed a full-blown strategy to fight the Canadian government’s plans to shut down the oil and gas industry and will defend the individual rights of its members.

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Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada. She has lectured and conducted seminars on business ethics to undergraduate, MBA and Executive MBA students, and to various corporate audiences for over 20 years both in Canada and abroad. Before earning her Ph.D. from the Wharton School of Business, University of Pennsylvania, she helped turn around a small business in Finland and worked for a consulting firm in Canada. Jaana’s research on technological change and innovation, value creation by business, executive decision-making, and business ethics has been published in various academic and professional journals and books. “How to Be Profitable and Moral” is her first solo-authored book.

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