Oilpatch expects to be back in election spotlight.
As another federal election kicks off, the Canadian oil and gas sector finds itself in a familiar position.
The industry is hoping for policy certainty and a concrete discussion about the future of the sector, but expects to become a target for tough talk about new policies.
“The debate will be on obviously climate change,” said Jeremy Mccrea, an industry analyst with Raymond James.
“If oil and gas can stay under the radar and not be the bogeyman that it’s been in prior elections, a lot of these executives will be happy.”
That’s the hope. Whitecap Resources CEO Grant Fagerheim said there are strategic policy issues to dissect, such as the role of carbon capture, utilization and storage (CCUS) to reduce emissions. However, he’s not anticipating a lot of nuance in the days ahead.
“I am not expecting much, other than the continual rhetoric ... with the blame placed on fossil fuel energy,” Fagerheim said.
“I don’t hold up a whole bunch of hope.”
During the 2019 campaign, the oil and gas sector was caught in the political crossfire of a divisive carbon tax clash and climate debate between the parties.
At that time, the Green Party leader discussed phasing out the oilsands, NDP Leader Jagmeet Singh opposed the Trans Mountain pipeline expansion, Liberal Leader Justin Trudeau talked about standing up to oil companies, and then Conservative head Andrew Scheer mused about reviewing fossil fuel sector subsidies.
“I was appalled the way it played out three years ago, to be a piñata and not even have an honest conversation, an honest dialogue, about the importance of the energy sector,” Alberta Energy Minister Sonya Savage said in an interview.
It remains to be seen how prominent a role the industry will play in the run-up to the Sept. 20 vote.
However, oil and gas made an early appearance on the second day of the election campaign with the release of the Conservative platform on Monday.
It calls for revamping Bill C-69, the Impact Assessment Act, which industry groups contend will scuttle major new pipelines in the country, and the repeal of Bill C-48, which bans oil tankers off the northern coast of B.C.
According to the document, the Conservatives would over five years earmark $5 billion to programs in areas to advance small modular reactors, electric vehicles and hydrogen developments, with the investment managed by a new Canada Advanced Research Agency based in Calgary.
The party’s plan also calls for implementing a liquefied natural gas export strategy, a hydrogen energy plan, providing a tax credit for CCUS, and pledging to make oil export pipelines a priority.
“We have an energy policy that would ensure we have the ability to get projects completed in this country and get our products to export markets, as opposed to trying to do everything they can to prevent them,” said Conservative candidate Blake Richards, the incumbent who’s running in Banff-airdrie.
The federal Liberal government rolled out a hydrogen strategy last December and, in the spring budget, proposed a tax credit for CCUS projects, although it is not intended to be available for enhanced oil recovery developments.
Last month, the Liberal government launched an engagement process on ensuring Canadian oil and gas workers will be part of a “just transition” as the country increases the carbon tax and has adopted a net-zero emissions target by 2050.
“While we continue to enjoy conventional energy and resources and carbon energy, we also are leaders in the transition,” said former Calgary Chamber of Commerce CEO Murray Sigler, who is running for the Liberals in Calgary Confederation.
“We can show best practices at home and we can export them abroad.”
The NDP vows to eliminate fossil fuel subsidies and direct the money toward
I AM NOT EXPECTING MUCH, OTHER THAN THE CONTINUAL RHETORIC.
low-carbon initiatives, while Green Party Leader Annamie Paul told reporters Monday her party opposes new petroleum exploration projects, pipelines and LNG facilities.
While the parties are just getting going, expect talk about the energy transition to pop up in the campaign.
Lowering emissions and improving ESG practices are already key topics in the sector. For example, oilsands producers representing about 90 per cent of total production recently joined forces to collaborate on reaching net-zero emissions by 2050.
Industry groups are anticipating more discussion about last week’s major report on climate change, the future of the Trans Mountain expansion and the Line 3 and Line 5 pipelines.
And they’re expecting more criticism is coming their way.
“People can get elected by trashing the oil industry,” said Surge Energy CEO Paul Colborne.
“We all agree we are going to have to cut our emissions, but to think we can do (the energy transition) in a day, a year, a decade even, it’s kind of utopian thinking.”
Colborne hopes to hear more about the future of the sector going forward and its role in the post-pandemic economic recovery.
The future of the industry and a detailed plan to deal with emissions — the sector accounted for 26 per cent of all Canadian greenhouse gas emissions in 2019 — does need to be discussed.
Aside from the net-zero commitment, the Liberal government vowed in April to lower Canada’s emissions by 40 to 45 per cent by 2030, although it’s unclear what this will mean for consumers, workers or companies.
“I don’t think we should be shying away from having a discussion, but obviously hope they are layered in transparency and honesty, in terms of what we can really accomplish,” said Mark Scholz, head of the Canadian Association of Energy Contractors.
The question of how to protect jobs while reducing emissions and meeting Canada’s climate objectives will require a broader debate, on the campaign trail and in the public.
Canadian Energy Pipeline Association president Chris Bloomer said there also should be a discussion about if the oil and gas industry can still grow with a massive natural resource base.
“We need to talk about all those things,” Bloomer said. “We can’t be selective. It’s a package — our energy future, what does it look like?”