Expert Opinions: Heather Exner-Pirot on Energy Security in Canada, the Arctic and Beyond.

Heather Exner-Pirot has over fifteen years of experience in Indigenous and northern economic development, governance, health, and post-secondary education. She has published on Indigenous economic and resource development, energy security, Indigenous workforce development, First Nations taxation and own source revenues, distributed & distance education, Arctic human security, regional Arctic governance, the Arctic Council, and Arctic innovation.

Exner-Pirot obtained a PhD in Political Science from the University of Calgary in 2011. She is a Senior Fellow and the Director of Natural Resources, Energy and Environment at the Macdonald Laurier Institute. She is also a Global Fellow at the Woodrow Wilson International Centre for Scholars in Washington DC where she completed a residential fellowship at the Wilson Center’s Polar and Canada Institutes, studying Arctic and Indigenous development.

Furthermore, Exner-Pirot is a Principal Consultant at Morris Interactive, and a Research and Communications Advisor for the Indigenous Resource Network. She has formerly held positions at the International Centre for Northern Governance and Development, the University of Saskatchewan, and  the University of the Arctic Undergraduate Studies Office.

Exner-Pirot sits on the boards of the Saskatchewan Indigenous Economic Development Network, the Canadian Rural Revitalization Foundation and The Arctic Institute. She is a member of the Global Arctic Mission Council and the Canadian Defence and Security Network, and a Network Coordinator at the North American and Arctic Defense and Security Network. She is the Managing Editor of the Arctic Yearbook (an international, peer-reviewed annual volume), and the former Chair of the Canadian Northern Studies Trust.

She has published over 45 peer-reviewed journal articles, book chapters, and edited volumes, and presented at over 75 conferences and events nationally and internationally. She has chaired or moderated dozens of provincial, national and international panels, workshops and conferences.

She is currently based in Calgary.

In your work, you talk a lot about the idea of energy security. Would you be able to tell us how, in your view, energy security compares to traditional conceptualizations of security?

“Energy security used to be a traditional security concept not long ago. When you think of the Middle Eastern Wars of the second half of the 20th century, that was traditional and it was energy security. We’ve only forgotten that in the last 10 or 15 years as a kind of environmentalism and concerns with climate change, legitimate concerns, have arisen.

But also, energy has been cheap for the last decade. So why is that? It was the shale revolution of horizontal drilling and fracking, that turned America from the world’s biggest importer of oil into the world’s biggest producer of oil. And it changed the dynamics of the global energy system. But now we’re starting to see that change, with shale oil soon to plateau and decline.

Global consumption continues to go up. Then we have the disruptions with Russia. And soon oil will start to become more expensive again. For the last seven years, I think it averaged about $60 a barrel. People don’t remember that for the few years before that, it was averaging about $100 a barrel.

That era of cheap oil and cheap energy was very good for human development. So I think it was easy to forget that energy security wasn’t traditional security for the last few years. But for the 100 years before it was a very clear linkage.

Now I see it as a return to traditional security, and we’re going to see that with critical minerals too. So people say, oh, we need to get off of fossil fuels because it creates these wars. It creates this dependence on authoritarian regimes like Russia, and that is true. But the flip side of being dependent on other sources, on renewables and also nuclear energy is they’re very mining intensive.

When we say critical minerals, I’m thinking of copper, nickel, lithium, manganese, rare earth elements. They are geographically concentrated. In most of those cases, there’s three or four countries that have 70 or 80 percent of global production and the Chinese will have an additional monopoly on the processing and refining. In fact, critical minerals and renewables are probably more prone to disruptions and supply chain insecurity than fossil fuels are because oil and natural gas and refining capacity are available on every continent.

So energy security will only become more of an issue as we move into a low carbon economy.”

What is unique about Canada’s energy capabilities and how can these capabilities be used to advance Canada’s values and interests?

“We are in such an enviable position. We’re the second largest country and only 40 million people so we can really be just wildly rich.

First of all with resource rents, and also through influence in the world. Of the OECD, the western developed countries, Canada is the only one in the top ten of oil reserves. The other nine in the top ten of oil reserves are OPEC+ countries. So, it is very important that Canada continue to play a role in producing oil in particular. We’re also the world’s I think fifth largest producer of natural gas, even though 99 percent of it what we don’t use gets exported to the United States. And then of course, all the critical minerals we have that we deemed critical.

So we are a resource powerhouse, but we have never used it strategically. That’s the point I want us to start thinking about in Canada and making, how can we become an energy superpower? How do we use this natural resource endowment in a way that advances our interests and our values?

We’re in this odd situation where actually the G7, EU and other allies are coming to us and asking us to produce more, to sell them more at of profit.

But we’re still kind of dilly dallying in Canada. Our prime minister said we want to be known for our resourcefulness, not for our resources, as if it’s some sort of shame or it’s some sort of second-class economy to be known for. But we are a superpower, we are a huge producer in oil, in natural gas, in uranium and hydro power.

So we do have hydroelectricity too, but of course, you can only really export that one way to the south or use it in Canada. With Saskatchewan on the nuclear energy side, we are a uranium superpower also. Uranium is particularly geologically concentrated. The great news is it’s geologically concentrated in Saskatchewan, Australia and Kazakhstan. So, between Canada and Australia, we could honestly meet our allies’ uranium needs for centuries. Nuclear is a no brainer because we have so much of that great uranium in these very friendly countries.

Looking in the next year, what I’m going to be working on is the question: what would be a strategy to make Canada into an energy and resource superpower? And then what would be the benefits of that? How would we use that power? If you’ve ever heard of Iran or Iraq or Kuwait or Venezuela in the news, it’s because they have oil, they have used their oil assets in such a strategic way that they are globally significant, that we have to have foreign policies about them, that we have to think about them.

Why isn’t Canada at least as strategic with our own oil reserves as Iran is, when we have more. So thinking about that very carefully, someone in the G7, someone in the OECD has to be exporting these goods. It can’t just be authoritarian countries that are controlling these markets.”

Much of your work looks specifically at the Arctic region and energy security. Would you be able to elaborate on what people and countries reside in the Arctic and why this region is so crucial for global energy security?

“Often from a foreign policy perspective, we think of eight countries that are members of the Arctic Council. So, it’s Canada, the United States (because of Alaska), Denmark (because of Greenland), Sweden, Finland and Norway and Russia and Iceland. Another way to look at it too is the five around the Arctic Ocean. That would be Russia, United States, Canada, Denmark and Norway.

Almost every single article about the Arctic you’ll ever read, starts off with a paragraph about how it has oil and gas and minerals, and these countries are fighting over it. That part isn’t actually true, and I don’t know why it keeps getting repeated.

Yes, there are resources. It’s a big region and largely untapped, but they are extremely expensive to extract. Taking Canada as an example, no roads, no transmission, no workforce. If you’re taking out copper, nickel and iron, you need railways. At the very least you need roads and this is just extremely expensive to do on melting permafrost or muskeg. So we do need those critical minerals, there are ways to get them, but it is expensive and that’s why the region hasn’t attracted investment. People say well, it’s climate change. It’s true, the sea ice is melting. But, if you’re a mining company that is not even in the top five cost factors that you’re concerned about.

What I like to say is the Arctic is becoming slightly less inaccessible. It’s not becoming accessible. That winter still comes. It’s still dark for six months a year. The ice always comes back and it’ll always be a very expensive jurisdiction. So there is a lot of hype, it’s never been met. Commodity prices today are not enough to really spur a lot of Arctic development. But, they are still there and at some point in the next few decades we’ll probably want to get at them.”

The unavoidable topic when discussing current energy security is the impact of the war in Ukraine. How has the war on Ukraine impacted resource development and energy security in Canada specifically and the Arctic region as a whole?

“I’m going to go even broader and say globally. It has had a massive impact in that we had a really great 20-30 years of increasing globalization where there was freer trade. China wasn’t our friend, but we wanted to trade with them. Their economic presence has increased everywhere. From an economic theory perspective, it was a pretty positive period of globalization and free trade and goods became cheaper.

March 2022 is a line in the sand of a time when we started to see a decline of globalization or a reversal of globalization when the United States, the European Union, Canada and others are saying we need to secure supply chains.

There is massive reorientation away from investing with Russia and China and towards more friendly countries. It’s going to benefit countries like Vietnam and Indonesia and probably Canada as well.

Our allies are all coming to us saying we need to get some of your critical minerals and some of your energy that we were getting from some unfriendly countries. Russia has a lot of what Canada has in terms of kind of global monopolies in: potash for fertilizer, uranium (although they mostly have enriched uranium), wheat, oilseeds, and of course, oil and gas. A lot of what people are trying to get off of Russia for, Canada’s a natural answer to. So we are seeing that reorientation, it’ll take time and also it’ll be a bit expensive. The reason why people were buying from Russia and China is because it was the cheapest, that was the major concern, was providing the cheapest goods. When you rely just on Russia, you do need to account for security to some extent, there is a premium to pay to have that secure supply, you pay dearly if you don’t have it. As we retreat from globalization, everything will become more expensive. Canada should benefit from this trend, but the world will probably suffer as a whole.”

Months after Canada released its long-awaited Indo-Pacific strategy which made no mention of LNG and after Japanese Prime Minister Fumio Kishida’s visit to Ottawa which failed to result in LNG projects being committed to despite the Japanese Prime Minister emphasizing “crucial role” of LNG in Japan’s energy transition, Japan recently became the first G7 country to break the $60 a barrel price cap on Russian oil imports. What would you say is the significance of this purchase? Are we likely to continue to see other countries break the US cap in the near future? If so, who? and what can Canada do to prevent allied countries from buying oil from Russia and other unfriendly powers in the immediate future and long-term future?

“So the only thing to do in the immediate future is get the Trans Mountain Expansion online, it’s going to happen and it would be significant for global production. I think it would have a max capacity of five- or 600,000-barrels addition to the existing Trans Mountain Pipeline. The world consumes about 100-102 million barrels a day. So it’s half of a percent of global consumption. But in terms of some of that margin of getting off Russian oil, it’s important.

But people imagine that we’re in a world where fossil fuels are in decline and we’re producing too much oil. Right now, what we see is pretty much the opposite. Oil demand is still growing, and by almost every kind of expert analysis it’s expected to grow into the next decade. And then it will probably plateau rather than decline because the other seven billion people outside of the West will grow to eight billion, then we’ll have nine billion people and they will be consuming more energy. So regardless of what the EU or Japan, the United States or Canada does, those other seven billion people will want to consume more energy, and oil just happens to be very affordable.

So what Canada can do is think about that medium and long term. Is there a way, as shale oil declines, for Canada to step up and fill the void so that OPEC and Russia don’t get more and more market share. We’ve seen their market share decline with shale oil, but now we’re going to see a reversal and people anticipate that OPEC+ again will have more market share. That creates vulnerabilities on the energy security side that if OPEC+ now controls 30% and we can see that in 20 years, they’ll control 60% of global oil markets, then we become very vulnerable to their whims.

So there’s a really important role that we have to start thinking about is what is the role of Canadian oil in 10 years, and in 20 years. If we expect that even in the best forecast by 2050 we’ll still need 50 million barrels of oil, some of it better come from an OECD country, some of it better come from the West. We cannot let all of it come from OPEC and from Russia.

Japan sees this and is asking us for our oil and is asking us for our LNG. Some people want to be very optimistic and think that we just won’t need this in 20 years and the problem will resolve itself. I think we better prepare for the worst. We better make sure there is some ability of getting Canadian supply out the door in the worst-case scenario.”

In other news, Turkey, which is a NATO member state, has been in cooperation with Russia on nuclear energy as the Akkuyu nuclear power plant in Turkey’s southern Mersin province was built by Russia’s state nuclear energy company Rosatom. What in your view are the implications of this collaboration? As a fellow NATO member state and a producer of nuclear energy how should Canada be responding?

“Turkey’s positions are a big problem in general for NATO. But focusing on this particular issue I think nuclear is really an important solution for low carbon energy and a great source of energy for the future and Canada is in a great position to provide. What has happened till now is that Russia has had a real monopoly on enriched uranium. So we produce kind of raw unenriched uranium and then a handful of our allies in France, the United States and the UK have the capacity to enrich it. But our own reactors don’t use enriched uranium, they use the natural uranium in our CANDU reactors.

So we’ve never been enriching which is part of the reason why Russia has 40 percent of the market share of enriched uranium is because they just have been downgrading their old weapons grade uranium which is very cheap. It’s a lot harder for us to enrich than for Russia to just downgrade and sell it. Through Rosatom they’ve been a really big supplier. In Asia and Russia and Turkey and other parts of the world, they have been growing their reactors. So they’ve been continuing this nuclear economy while the West has somewhat stagnated. Since Fukushima and even since Chernobyl we have really stopped building nuclear reactors since the eighties and nineties.

And now we’re seeing a reversal of this, we’re seeing the increase of SMRs, we’re seeing the growth of nuclear energy again, we’re seeing the interest of the West in nuclear. So now we have to look at how are we going to displace this Russian hold on the enriched uranium market. And not least because many of our Central and Eastern European allies who don’t want to be dependent on Russia are totally dependent on Russian enriched uranium supply.

In the last few months, a lot has changed. Cameco is a Saskatchewan based uranium miner signing deals for millions and millions of pounds of uranium, to Ukraine, to Poland. We’ve seen just last month, Japan, the UK, Canada, the US and France having an alliance to enhance the security of the nuclear fuel chain. To get Putin out of the nuclear fuel supply chain.

That means that some of us are going to have to enrich. I think Canada probably should think seriously about getting into the enrichment game to supply small modular reactors since small modular reactors require a high-assay low enriched uranium (haleu). So far, only Russia produces haleu on a commercially available basis. Canada is a big part of this solution and it’s also a huge economic opportunity for us. We have every competitive advantage because we have uranium, and we have a nuclear sector. And nuclear energy is one area where the federal government is actually on board and has been supporting some of this.”

This interview has been edited for length and clarity.

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