Strange bed fellows

Canadian energy industry - global glut of oil supply

There has not been a lot of good news – if any – for the Canadian energy industry this past year.

The global glut of oil supply had driven prices through the floor leading inevitably to the shuttering of rigs and sweeping layoffs. On the liquefied natural gas front the same pattern of supply glut/tanking prices led to project approvals being put on hold and in some cases on the way-back burner.

Even if those problems went away, there was still a nagging doubt over whether the industry would be able to take advantage given changes in government at the federal and provincial (Alberta) levels.

Especially in the case of Alberta which had an NDP government, not a party known for its great love of the oil patch.

But there has been encouraging news for the industry this month on both fronts.

Addressing the United Steelworkers national policy conference in Montreal, Albertan premier Rachel Notley urged, “Let’s work together. Let’s get to ‘yes’ on a pipeline”.

Actually she had earlier made clear her support for two oil pipeline proposals: Energy East to New Brunswick refineries and the Kinder Morgan expansion of the line to Vancouver.

And she continued in that vein at the federal NDP convention, urging the delegates to reject the Leap Manifesto which essentially sounds the death knell of the entire fossil fuel industry in Canada.

So what about the feds? During the election campaign Justin Trudeau draped himself in a greenish mantle, promising a reversal of the Conservatives policy with real action on reducing greenhouse gas emissions across this country.

In fairness, he did make it clear that he was in favour of the Keystone project that would send Canadian crude to the US but he was wishy washy on Energy East and Kinder Morgan, two projects that would serve the global market and get out from under the Americans’ thumb when it came to price.

Federal environment minister Catherine McKenna must have allayed those fears significantly when, speaking at a town hall meeting with Gina McCarthy of the US Environmental Protection Agency, she said “[Canada] didn’t get into fossil fuels overnight and we’re not going to get out of them [overnight].”

Also, “We can’t have everyone in the oil sectors lose jobs.”

And a Canadian Press story reports “sources” saying prime minister Justin Trudeau has given senior members of his team the task of coming up with a plan that would see both the Energy East and the Kinder Morgan projects go through.

The proof of the pudding will come when the federal government delivers its verdict on the Kinder Morgan expansion, expected by year’s end.

FOOTNOTE: So we have the centrist federal Liberals in favour of the Kinder Morgan project, we have the left wing Alberta government in favour of Kinder Morgan and yet we have the centre-right BC government at this moment opposed to that same project.

As a friend of mine commented, “It makes no sense.”

 

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