An oil pump jack operates near Claresholm, Alta., on Jan. 18. Prime Minister Mark Carney’s pledge to make the country an 'energy superpower' reflects the relatively pro-energy tone he took during the election campaign.Todd Korol/Reuters
If the new federal government truly wants to get Canadian oil and gas to markets other than the United States, Prime Minister Mark Carney will have to listen to the very real concerns of energy investors, and either nix a host of regulations or form state-owned enterprises to build pipelines, says the head of one Canadian energy fund.
Mr. Carney’s pledge in his victory speech to make the country an “energy superpower” reflected the relatively pro-energy tone he took during the election campaign.
“It’s time to build Canada into an energy superpower in both clean and conventional energy,” Mr. Carney told supporters.
Canada would need to do things “previously thought impossible, at speeds we haven’t seen generations,” he added, and build new trade and energy corridors, working in partnership with the provinces, territories and Indigenous peoples.
Adam Waterous, chief executive officer of Waterous Energy Fund and executive chairman of Strathcona Resources Ltd. SCR-T, an oil sands company, is unsure if that tone will spill over into policy.
But if regulations that govern the construction of pipelines continue to hinder projects, “there is going to be no private-sector development of oil pipelines, of LNG facilities, of energy infrastructure,” Mr. Waterous said in an interview Tuesday.
Instead, getting Canadian crude to markets other than the U.S. will fall to state-owned enterprises.
“I believe the Canadian government is going to build more energy infrastructure through state-owned enterprises. The reason being is that a core idea of Mark Carney’s campaign was moving away from the United States,” Mr. Waterous said.
Given that Mr. Carney said he would not scrap Bill C-69 (which requires that resource projects be assessed for environmental, health, social and economic impact and respect the rights of Indigenous peoples) nor the cap on oil and gas emissions “doesn’t mean that east-west pipelines can’t be built. It just means they can’t be built by the private sector,” Mr. Waterous said.
He envisages a kind of “Petro-Canada 2.0″ but this time, it will be U.S. import tariffs – rather than a global oil crisis – that spur the creation of an agency to get Canadian oil to market.
Mr. Waterous was one of 14 oil and gas executives who made their asks of Ottawa very clear in a letter penned to the leaders of major parties ahead of the federal campaign. They called for the declaration of an energy crisis and the use of emergency powers to reduce regulations in the energy sector – actions they said would increase domestic production and boost Canadian sovereignty.
Conservative Leader Pierre Poilievre had committed to the requested reforms if his party formed government, but Mr. Carney was more circumspect.
On Tuesday, Alberta Premier Danielle Smith said in a statement that she intends to facilitate and lead an energy policy discussion with Ottawa “with the sincere hope of securing a prosperous future for our province within a united Canada that respects our province’s constitutional rights, facilitates rather than blocks the development and export of our abundant resources, and treats us as a valued and respected partner within Confederation.”
Andrew Leach, an energy and environmental economist at the University of Alberta, expects the oil and gas emissions cap will be the first thing that hits the agenda under a Carney government.
The policy, released under the previous federal Liberal government, would cap greenhouse gas emissions from Canada’s oil and gas sector to 35 per cent below 2019 levels. Ms. Smith and the Alberta fossil-fuel sector say the cap will stymy production.
“It’s in regulatory development, so the PM and whoever the environment minister is are going to have to make a call in pretty short order about what’s going on in terms of the development and design of that policy,” Prof. Leach said in an interview Tuesday.
Lisa Baiton, CEO of the Canadian Association of Petroleum Producers, said the sector is ready to work with Mr. Carney to make Canada a global energy superpower.
“Developing our world-class oil and natural gas resources to their full potential by growing our exports to international markets will strengthen our energy security and economic sovereignty,” she said in a statement.
Mark Scholz, CEO of the Canadian Association of Energy Contractors, said Tuesday his members are “ready to roll up their sleeves and get to work” on expanding oil and gas development building critical energy infrastructure to counter rising global uncertainty and protectionism from the U.S. He also called on Ottawa to eliminate the emissions cap and scrap greenwashing legislation.
Green energy proponents have an extensive to-do list for the new federal government, too.
The Pembina Institute, a think tank, said in a statement that Ottawa must secure Canada’s energy and electricity sovereignty though building out a national, green electricity grid, and develop an improved output-based pricing system on emitters.
Rachel Doran, the executive director of Clean Energy Canada, said Mr. Carney must increase the country’s competitiveness and energy security at a time of increased global volatility by focusing on “building a clean economy and lasting affordability,” and breaking down interprovincial trade barriers.