Resource Development vs Resource Extraction

By Eric Rempel

Inevitably election time is when politicians become particularly vocal in their assertions that “we are pro-development, but they are opposed to development.” Implicit in this assertion is that what we are proposing to do, in terms of development, is good. This needs examination.

There is “resource development” and there is “resource extraction”. There is a difference! Politicians, by and large, use whichever word suits their purpose at the time, regardless of which activity they are actually describing. Since, in the end, we are the ones who will be impacted by the policy, we do well to think about the difference.

Consider, for a moment, how we might apply this distinction with respect to a forest resource. One way of utilizing this resource is to harvest the timber at a rate determined by one's ability to market the timber. In this case no thought is given to whether there will be timber available for future years.  This is resource extraction. Some time down the road there will be nothing left to harvest.

Another way of approaching the harvesting of a timber resource is to do an assessment of the resource, estimate how much growth occurs in a typical year, and match the harvest to that growth. This is resource development.

Can a country take a developmental approach to mining? It's rarely done. The resource is mined with no thought for the future. As near as I can tell, that is the current approach with the oil sands.  It seems to me, that any politician who speaks of “oil sand development” is either tragically ignorant or deliberately deceptive.

But it need not be that way. I think there is a way we could benefit from Canada's oil sand resource  that would be developmental rather than extractive.

Fundamentally we all need to recognize that the resource is scarce. This means that if we benefit from the use of that resource, a significant portion of the wealth generated by that resource needs to be directed towards developing alternatives to the consumption of that resource.

Applying this principle specifically to an energy resource such as oil, a government serious about oil development would ensure that significant resources are directed towards the search for, and development of, alternatives to oil – solar, wind or something altogether different. Such research and promotion needs to be coupled with incentives to enjoy prosperity while using less energy.

A policy to encourage such development could be quite complex, but ironically it could also be very simple. An energy tax, also known as a carbon tax, is easy to apply [compared to our current income tax] and would create incentives within the private sector for both, the development of energy alternatives and the cultivation of lifestyles less dependent on energy consumption.

Surely it is one of the ironies of our time that the political party with the word “conserve” in its name is the party singularly promoting the extraction of the oil sands resource while opposing a carbon tax.