Green groups won’t ever give our oil ‘social licence,’ so let’s stop trying to please them


For environmentalists, no sacrifice of human well-being is ever enough.

Environmentalists, led by the New York-based Natural Resources Defense Council, have launched a campaign against TransCanada Corp.’s proposed Energy East pipeline. Energy East would transport oil from the Alberta oilsands to the Atlantic coast for tanker shipping to further markets. The environmentalists, of course, want to ban the pipeline because they claim it would damage the environment. (See Claudia Cattaneo’s July 29th report in the Financial Post: “Policy doesn’t sway pipeline opponents.”)

Environmentalists in the United States managed to have TransCanada’s other pipeline project, Keystone XL, banned by President Obama, by claiming that Alberta’s oilsands are contributing to “devastating man-made” climate change and therefore pipelines transporting oil produced from them should not be allowed. Never mind that the contribution of Canada’s entire oil production to global greenhouse gas emissions is less than 0.5 per cent.

Have the governments succeeded in appeasing the environmentalists by obtaining “social licence” for oil production and transportation? Of course not. The environmentalists did not respond to the governments’ greenhouse-gas-slaying measures with sanction of the fossil fuels. They merely changed the argument: Energy East should not be built because oil-tanker transport will lead to catastrophic oil spills that will devastate marine life. Even though 80 per cent of the oil in the world is transported by tankers already, and that tanker spills have declined significantly in the last 40 years, are rare (an average of 1.8 spills a year 2010–2015) and are effectively contained with modern technology. We have learned a lot since Exxon Valdez and BP Deepwater Horizon (the latter was not a tanker spill).

While we need the affordable, reliable energy that oil companies produce, we don’t need governments and companies to plead for a “social licence” from environmentalists and the “public” to allow companies to operate. Pursuing such a licence is futile, for two reasons: 1) the very concept of “social licence” is invalid, and even if it were valid, 2) the environmentalists would never grant it.

“Social licence” is an invalid concept, first, because “social” refers to society “as a whole” giving licence to business to operate. “Society as a whole” does not exist as an entity that thinks, acts or grants licences; there are only individuals who constitute a society by interacting with others according to certain rules, such as respect for individual rights. At most, “social licence” could be construed as the permission given by the majority of people to business to operate, but a majority rule can be very hazardous to human flourishing, as the majority can always vote to violate the rights of those in the minority.

“Social licence” is an invalid concept also because business does not require a licence to operate from society nor the government. It merely needs others wanting to trade with it and it must not violate others’ individual rights, which government must protect.

Even if “social licence” were a valid concept, the environmentalists would never grant it to business because their standard of value is not human flourishing or the human environment conducive to human flourishing. The environmentalists’ standard of value is pristine nature without any human footprint, and therefore no sacrifice of human well-being and prosperity is ever enough. The environmentalists want no fossil fuels, with all humans reduced to pre-fossil fuel poverty and misery.

Businesses or governments should not waste any time pursuing social licence from the environmentalists or any other “social” group. TransCanada CEO Russ Girling has recognized this. As Cattaneo reports, “TransCanada has given up to meet (the environmentalists’) demands.” Girling is known as a staunch defender of his company and industry, based on the tremendous benefits of oil to human flourishing, while at the same time recognizing and astutely managing the risks involved in moving oil via pipelines.

As appeasement and pursuit of “social licence” is futile, other oil and pipeline executives should follow Girling’s example and defend their companies on moral grounds for the great value they provide. Governments, for their part, should cease their welfare-destroying climate change policies and focus on protecting individual rights instead.

Jaana Woiceshyn, associate professor at the University of Calgary’s Haskayne School of Business, is the author of How to be Profitable and Moral.

Story: Financial Post