CARR HOLDS THE LINE AMID ENERGY UNCERTAINTY.
U.S. investment climate more energy-friendly
Among t hose who eagerly made t he trip to Washington for Donald Trump’s inauguration Friday was Jim Carr, Canada’s Natural Resources Minister, who is responsible for some of the hottest files between Canada and the United States.
With the priorities of the energy infrastructure-linked neighbours heading in opposite directions, Carr is stepping up efforts to build relationships and find “points of intersection.”
“The U.S. receives 98 to 99 per cent of Canada’s exports of oil and gas,” Carr said. “We have very deep relationships which we shared for a very long time. And I am sure it’s in the interest of both countries to make sure that … those ( links) continue to be in the interest of both countries, and I am confident we will find ways to ensure that those points of intersection and of convergence are well understood.”
In an interview before heading for the U. S. capital, Carr said he would watch inauguration events from the Canadian embassy on Pennsylvania Avenue, one of the most in- demand venues among Washington’s political elites.
“I hope to meet lots of people … and to continue with even greater interest after the inauguration is done,” Carr said. “Not all the cabinet secretaries have gone through their hearings yet, and as they are confirmed then these relationships will deepen.”
Still, Justin Trudeau’s Liberal government doesn’t seem prepared to back down on its signature environmental initiatives to adjust to Trump’s fossil fuel embrace. At least not yet.
“We are not certain what policies the Trump administration will follow, but we have a responsibility to our own citizens to advance an agenda we were elected on and policies that we have announced in co- operation with the provinces and we have international commitments,” Carr said.
“We will take all of that very seriously, while assessing the policy initiatives of the Trump administration … to ensure ( they) are fully aware of what we believe to be joint opportunities between our two countries as we move ahead on energy and environmental issues.”
Carr said he’s been talking with those with a good understanding of Trump’s energy and environment priorities, but they remain uncertain.
He said Canada is keen to continue efforts to build energy and environmental policies with the U. S. and Mexico. For example, the three countries have been working together to reduce methane emissions from oil and gas operations.
Another area of common interest is the Keystone XL pipeline, which Trump has promised to approve quickly, though on what terms is unknown. Carr said KXL already has all the necessary Canadian approvals and “we think this pipeline is in Canada’s interest and we hope it is built.”
Carr also said both countries will be keen to preserve and grow employment in energy.
The areas of divergence, however, are great. They include Trump’s plan to accelerate growth of oil and gas drilling to make America’s energy independent, a reduction of red tape, backing out of the Paris climate change accord, a potential border tax championed by House Republicans t hat could disadvantage Canadian oil and gas imports, scrapping trade agreements like NAFTA.
Meanwhile, Canada is on a path to becoming a more expensive and more regulated oil and gas jurisdiction.
Canadian producers are paying new carbon taxes, regulation to get approvals for energy projects like pipelines has been increased, emissions from the oilsands have been capped. It’s all part of commitments to reduce greenhouse gas emissions under the Paris accord and to transition to renewable energy.
Asked whether he’s concerned about the competitiveness of Canadian oil and gas, Carr said there are opportunities in green energy, which will be an increased part of the Canadian economy.
“We think the inevitable t ransition to renewable sources of energy and clean technologies and innovation is a terrific possibility for Canadian entrepreneurs, and that is why we talk a lot and meet a lot with the private sector … about ways in which government can be helpful,” Carr said.
“There are literally trillions of investment dollars internationally, and Canada is positioned to do a better job than we have historically in attracting that investment in innovation, in green technology and in renewable sources of energy. I think you can see this also as opportunity.”
Canada also supports the TransMountain pipeline expansion, which received Ottawa’s approval in November, “and we are very hopeful that construction will proceed,” Carr said, providing oil companies some relief by opening new markets outside the U.S.
Still, it doesn’t sound like Canadian oil and gas will get much support from Ottawa beyond what’s already on the table and that it will have to accept that for the next four years at least, U.S. oil and gas will be a friendlier place for investors.