A VITAL RESOURCE

OTTAWA NEEDS TO TAKE FIRM STAND AGAINST BLATANT DISCRIMINATION TARGETING THE ENERGY SECTOR

Joe Biden’s announcement that, if elected, he would revoke the permit for the Keystone XL pipeline was a hypocritical bleat from a candidate desperate to shore up support from the Bernie Sanders wing of his party and from such wealthy environmental donors as Tom Steyer and Robert Redford. It is more about politics and campaign funds than the environment, just as it was for the president he served. Barack Obama vetoed Keystone XL in 2015 after stonewalling for more than seven years, during which time his administration approved literally hundreds of applications for pipelines and pipeline expansions from U.S. companies. (Obama’s reward was substantial private financial support for his presidential library.)

While the Canadian government stood mute on the sidelines regarding Obama’s decision, TransCanada PipeLines challenged the action as a violation of NAFTA, a case it had a good chance of winning, until it became unnecessary as President Donald Trump changed course early in 2017 and approved the project. It remains subject to court rulings, but Trump is adamant the project move forward.

Compounding the hypocrisy from Biden is the capricious decision by Norway’s wealth fund, Norges, to pull all its investments in the Canadian oilsands — a decision based on outdated and incorrect facts and intended primarily to win brownie points from climate change advocates. It follows a pattern initiated two years ago by HSBC, a bank that did not extend its moratorium to all oil producers, notably Saudi Arabia. Blatant discrimination, and against Canada only.

The announcement by Biden and the decision by Norges are clear examples of kicking someone when they are down. Canada’s oilsands are already reeling from the collapse in oil prices and a significant drop in demand brought on by the global economic lockdown.

According to Alex Pourbaix, the CEO of Cenovus, “The hypocrisy of the move by Norges is particularly rich given that the sovereign wealth fund amassed its $1-trillion value primarily from oil production profits.”

The oilsands have long been the whipping boy for environmental activists who are pressing banks and funds worldwide to curtail investments. Ambivalent Canadian government policies are regrettably having a similarly perverse effect, causing virtually all foreign oil companies to suspend future investment in Canada.

Critics of the oilsands production fail to take account of the extent to which carbon emissions have been reduced by Canadian producers. According to Pourbaix, the emission intensity of Cenovus’s production has been reduced by more than 30 per cent over the past 15 years and the company is determined to reduce per barrel emissions by another 30 per cent by 2030. It and some of its peers intend to achieve net zero emissions by 2050. These commitments were ignored by Norges’ public relations ploy as well as by Biden’s announcement. For them, facts are not relevant to the debate. Climate change advocates are obsessed with the “scientific basis” for their concerns, but persistently ignore factual evidence that counters their beliefs.

We should have learned from the pandemic that all scientific models are subject to change, given more accurate and complete data. The same is true for 50- to 100-year predictions on climate change. None of Al Gore’s dire prophecies has materialized. Unconventional truths indeed.

The Canadian government’s effort to straddle between positions favouring climate change and measures to develop our energy sector has been an abject failure on both counts, epitomized most recently by the reckless decision to increase the carbon tax precisely when the economic lockdown began. An ill-timed body blow to farmers and truck drivers dependent on fuel for their living.

As dubious as the carbon tax increase is, the stipulation that large industrial firms applying for emergency relief must “demonstrate some degree of environmental commitment and vow to report annually on its climate and sustainability initiatives” is a non sequitur masquerading as government policy.

The carbon tax increase should be rescinded. The massive spending prompted by the pandemic will create the need for huge tax increases of a different order down the road. The government needs to recognize and respect the reality of the $8-billion contributions that our oil and gas companies make annually to federal and provincial treasuries.

The Canadian government should take a firm stand against the blatant discrimination targeting one of our most vital resources. Is its position influenced by the fact that its minority is being propped up by the Bloc Québécois? When the government of Canada stoops to the preference of a party intent on breaking up Canada in order to retain power, it’s a peculiar assertion of the national interest. Ironically, the failure to defend the interests of Alberta will stimulate stronger support for secession in that province.

The path to economic recovery should be the government’s overriding priority, bar none, including climate change, on which the government persists mightily for global attributes despite its dismal track record. Instead of more short-term relief we need a plan to rebuild the basics of our economy with greater emphasis on self-reliance, support for such key sectors as energy, refurbishing infrastructure, and special training programs for thousands of Canadians whose jobs will never come back.

Canadian producers believe that energy and economic growth are inextricably linked, and that oil and natural gas will continue to be a significant part of the energy mix for decades to come. The strength of this vital sector is essential to any prospect of recovery from the pandemic.

The government cannot afford to denigrate our beleaguered energy sector. It should start by retaliating smartly and sternly against self-serving political pronouncements by foreign politicians and actions by such funds as Norges opposing the Canadian oilsands. Instead of tepid expressions of “disappointment,” it should immediately announce that, should Biden get elected and follow through on his pledge regarding Keystone, Canada will join Alberta and the pipeline builder in a formal and vigorous challenge on action that would be an arbitrary violation of the USMCA calling into question other bilateral commitments on energy.

The crude oil price war initiated by Russia and Saudi Arabia is having many unintended consequences, including bringing the “crude oil independence” lauded by the Trump administration to a screeching halt. Instead of importing more oil from Canada, the U.S may have to resume imports from such unstable foreign regimes as Venezuela for the refinery complex on the Gulf Coast configured for heavy oil.

The Norwegian government should be notified that specific retaliatory actions are being examined including a ban on all of Norges’ investments in Canada. Banks and investment funds more generally should be put on notice that Canada will not accept meekly this kind of discrimination. We will defend our national interests every way we can.

The primary responsibilities for any Canadian government are security, prosperity and national unity. Robust support for our energy sector in a post-COVID-19 world would serve all three goals. A singular obsession with the demands of climate change zealots would not. The choice is that straightforward.