In his concise yet comprehensive history of petroleum, politics, and the modern world, Don Gillmor argues that oil’s geopolitical dominance is entering its twilight years:
The Oil Wars will always be with us. For more than a century, the wars were among the companies and nations trying to acquire and exploit territories that contained oil. But now oil is fighting its own war, facing both history and a green revolution, two battles it can’t win.
Gillmor’s conclusion to On Oil seems particularly prescient in the context of Donald Trump’s ill-advised and illegal war against Iran that is wreaking havoc on the global economy. Much of the Persian Gulf’s oil infrastructure — including the strategically vital Strait of Hormuz shipping route — lies within range of Iran’s stockpile of decidedly low-tech drones, rockets, and missiles. Whether the war was motivated by Trump’s desire to distract from the Epstein files, secure access to Iran’s oil assets, bring about the end-times, or was simply the consequence of truly exceptional stupidity is anyone’s guess. What’s less ambiguous is that the volatility unleashed in global oil markets by the attack is giving emerging economies worldwide incentive to speed up the transition to renewable energy.
With any luck, Trump may have inadvertently provided the impetus for a global energy transition. With the International Energy Agency still forecasting fossil fuel use to peak before 2030, there’s hope the era of conflicts over fossil fuels may be coming to an end. Unfortunately, that may be the end of the good news.
The International Energy Agency’s May 2026 Oil Market Report confirms what’s already obvious to consumers worldwide: Trump’s incompetent war on Iran has caused structural chaos, supply disruptions, and global economic crisis.
The United States may be a rogue state and a declining superpower, but its ideological commitment to fossil fuels is going to continue exacerbating climate change — and geopolitical and economic instability — the world over for the foreseeable future. A change in government is unlikely to bring about an American energy transition, given the influence of the fossil fuel sector, alongside energy-hungry Big Tech, on both the United States’ principle political parties at the state and federal levels. Canada is hardly immune to the same pressures. Despite his reputation for environmental seriousness, Mark Carney has governed from well within the political and economic constraints imposed by a fossil fuel–dependent economy, revealing the limits of elite climate politics in a petrostate.
The United States and Canada are also world leaders in the creation and promotion of climate change denial and fossil fuel disinformation. These narratives are exported internationally through well-documented global networks of libertarian anti-regulation lobby groups — such as the Atlas Network — and amplified by mass media.
Canadian Fossil Fuel Fever Dreams
The fossil fuel sector’s denial and disinformation campaigns have facilitated a sinister transition in place of a green one, transforming the problem of regulatory capture into something more expansive: the co-optation of nominally sovereign foreign governments in service of hydrocarbon interests. Nowhere has this transition happened more fully, and with less scrutiny, than Gillmor’s homeland of Canada.
Prior to his career as a journalist and author, Gillmor was a roughneck working the Alberta oil patch. As he recounts in On Oil, he worked through the first big boom — that of the 1970s — in the years immediately following the oil embargo by the Organization of the Petroleum Exporting Countries (OPEC) against the United States and its allies in retaliation for their support of Israel during the Yom Kippur War.
Most Americans and Canadians alive at the time remember queues at gas stations, inflation, and the beginning of the end of postwar prosperity. This was the case throughout the industrial east of Canada as much as the United States. The western portions of these countries experienced the 1970s differently. Canadian oil — typically too hard to refine, too costly to transport, and generally too expensive compared with cheaper Middle Eastern sources — suddenly had a considerable advantage: reliability.
Gillmor describes working on the Alberta oil patch of the mid-1970s in Wild West terms. His compatriots were hard-drinking, disinterested in safety, and largely left to their own devices to get oil out of the ground and turned into profit as quickly as possible. He describes Calgary — Alberta’s largest city and business capital — as a city growing rapidly thanks to a massive influx of oil money financing glittering new skyscrapers, but with so little investment in civic institutions and urban planning that there was effectively no city to speak of. Gillmor recalls coming across a film shoot on a barren downtown street, only for a production assistant to inform him that the movie was set in a postapocalyptic wasteland. At the height of the 1970s oil boom, Downtown Calgary served as an excellent setting for a planet devoid of human life.
That iteration of Calgary, as Gillmor recalls, was one where Texan and Oklahoman accents were at least as common as any regional Canadian variety. The oilworkers were mostly imported, as were many of the executives and the Bible Belt evangelical Christianity that insisted oil was God’s gift to the righteous. Such messaging is as strong as ever in today’s Alberta. Premier Danielle Smith recently told a conference of Christian leaders that building a new pipeline to the Pacific Ocean was “consistent with the teachings of Jesus.” Alberta today is a product of that influence: a province that regards itself as custodian of Canada’s fossil fuel sector, despite much of the industry being foreign-owned and controlled by American shareholders.
Although the province is Canada’s fourth most populous (with a growing population of over five million), Alberta still tries to derive most of its operating income from oil and gas royalties. Predictably, this has resulted in inconsistent funding for provincial services — like health and education — and surprise deficits. The busts are always worse, and longer, than the booms, which are never nearly as good for the average Albertan as the oil and gas sector, and their partners in the political class, make it seem.
When Alberta Premier Ralph Klein announced the province’s budget was balanced in 2005, he issued CA$400 cheques to every “man, woman, and child” in the province. What wasn’t mentioned were the massive cuts to provincial services (as Gillmor relates, Klein shuttered three Calgary hospitals, fired thousands of nurses, and froze doctors’ salaries). Despite its apparently massive oil wealth, Alberta spends little on its own citizens. A substantial portion of that wealth is captured by the oil and gas industry through a combination of low royalty rates, tax concessions, and other forms of public support. Unlike Norway, which has been directing its oil wealth into a sovereign wealth fund now worth an estimated $1.7 trillion, Alberta’s rainy day fund is only worth about CA$30 billion. This is less than half of Alberta’s most recent budget, a completely inadequate sum to provide its citizens a long-term source of revenue.
It might not have been like this.
Whither National Energy
Canada’s federal government attempted to solve the various interrelated problems caused by the oil crises of the 1970s, first by creating a nationalized and vertically integrated oil company (Petro-Canada), then by developing a National Energy Program (NEP). The program was designed to combine traditional oil and gas exploration and production with energy conservation measures and research into new domestic energy sources. The aim was energy security as a means of achieving a higher degree of economic and geopolitical sovereignty, both cornerstones of the nation-building effort of Justin Trudeau’s father, Prime Minister Pierre Elliott Trudeau.
Initially popular — the program aimed to stabilize energy prices for consumers and industry — the NEP became a four-letter word in Alberta political circles. As a global oil glut developed in the mid-1980s and interest in Alberta’s more expensive heavy crude thinned, Trudeau became synonymous with government overreach into areas of provincial jurisdiction, particularly natural resources.
Forty years later, when Justin came to power with vague promises of doing something positive for the environment, it wasn’t just Alberta’s government that was firmly in the pocket of Big Oil — so was the entire Conservative Party of Canada and several of its provincial counterparts. Worse, most of Canada’s “think tanks” were linked through the Atlas Network and had regular and unfettered access to the nation’s establishment media, to say nothing of third-party advertisers, unrestrained lobbyists, and astroturf groups created by public relations firms.
Trudeau the Younger’s objectively unambitious environmental pledges — Gillmor summarizes them neatly as “extended fence-sitting” — were attacked by opponents from without when they weren’t being actively undermined from within, such as when he ordered $40 billion of public money to be directed toward purchasing and completing an oil pipeline. The unpopularity of the consumer carbon tax became a lethal political liability for Trudeau, despite the fact that carbon pricing has long enjoyed support from conservatives and oil industry apparatchiks alike.
One of the underlying ironies about Canada’s backslide into petrostate territory is the willing participation of the federal government — and the Liberal Party in particular — despite being so often mischaracterized as an impediment to the fossil fuel sector. Gillmor notes that while Conservative leaders like Stephen Harper waged an ideological war against the federal government’s ability to study and react to climate change — by, for example, eliminating climate change research groups and dismissing the findings of federal scientists — it was the Liberal Party that ensured a bright future for the oil sands.
Back in 1996, the Liberal government of Jean Chrétien enacted massive tax breaks for companies looking to develop the oil sands — up to 100 percent for capital costs. The Alberta government followed suit by reducing royalty rates from 25 percent to 1 percent until capital costs were paid off. The results were as immediate as they were predictable: investment soared, production expanded, and revenues disappeared.
Oil sands production increased by 133 percent between 1995 and 2004 as foreign investment flowed in and the federal government increased spending on research and development. But revenue dried up simultaneously, a consequence of the tax breaks and royalty reductions. As Gillmor notes, provincial royalty revenues declined by 30 percent, and revenue per barrel of oil equivalent dropped by more than two-thirds. Practically overnight, Canada’s most valuable resource was also one of the world’s most heavily subsidized fossil fuels.
North American Petrostate
The situation hasn’t improved in the last twenty years, and there’s really not much to say about it other than to state the obvious. Canada has become one of the world’s largest per capita sources of carbon dioxide emissions and fossil fuel–related pollution. An ever increasing amount of public money subsidizes one of the worst contributors to the climate crisis, and Canadians have essentially no political recourse to change this.
Most of Canada’s major political parties — at the federal and provincial levels — are unable to resist the demands of the oil and gas sector, which employs fewer than 200,000 people in a Canadian workforce of roughly 22 million. PR and lobbying firms representing fossil fuel interests have direct access to both the prime minister’s office and the leadership campaign of his chief rival. And American-funded fossil fuel advocacy groups masquerading as libertarian think tanks have direct access to Canadian establishment media, where they champion the cause of Canada’s largely American-owned fossil fuel industry.
Gillmor’s writing style is concise and direct. He fits ten pounds of facts into a five-pound bag. That On Oil is only 134 pages is both an asset — you can read it leisurely in an afternoon — and a statement in and of itself about everything you need to know about how Canada became a petrostate. Simply put: it isn’t a complicated story. A valuable resource was found, and a mythology quickly developed around it: that oil was a gift from God and that its extraction could only ever bring prosperity.
Regulation, planning, and control of any kind were abandoned in favor of unrestrained exploitation. Over time, this creed, ignoring economic realities as much as climate science, became the governing politics. Disregarding the too-short booms and too-long busts, two levels of government conspired with industry to remove barriers and provide massive taxpayer-funded subsidies, allowing the fossil fuel industry to dictate policy as much as politics. The wealth flowed out of Canada, largely to the United States, and when the latter threatened the former’s sovereignty, the only solution offered was to invest more public money and remove whatever regulations remained.
If there is any hope at the end of On Oil, it is only that the economic realities of fossil fuels are catching up with Canada, and while this won’t undo any of the damage their exploitation has caused, it means their days are numbered. The proverbial last barrel of oil probably won’t be Canadian, despite the wishes of the fossil fuel sector. The end will come not because Canada has run out of oil and gas, but because it’s simply too expensive to transport abroad, and too many Canadians have already chosen renewable alternatives.
China and India are emerging superpowers and world leaders in renewable energy. Europe, meanwhile, has responded to disruptions in access to cheap fossil fuels — most notably Russia’s illegal invasion of Ukraine — by pushing aggressively forward with the energy transition. Solar, wind, and battery technology is advancing faster than anticipated, and their costs are in free fall. As Gillmor predicted a year ago, China appears best suited to capitalize off the Iran war as nations around the world transition to green energy. New renewable energy is already far cheaper than fossil energy in North America, meaning Canada’s continued financial support is purely ideological, not economic. Such a situation is untenable.
Whether this untenability results in a Canadian Green New Deal, or a fossil-fueled Alberta petro-populistmovement, remains to be seen.