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Justin Trudeau’s existential problems with oil and gas: Jack Mintz

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7 minute read

From the MacDonald Laurier Institute

By Jack Mintz

Squeeze the industry to please his party’s green base or keep output, revenue and high-paying employment flowing?

Talk at the latest climate-change shindig in Dubai has centred around the future of the oil industry and whether countries should pledge to phase out oil and gas production entirely or simply transform the industry in decades to come. Canada always talks a deep-green game at these affairs but are we really ready to nail shut the oil and gas coffin?

Maybe not. In Dubai Canada announced a cap-and-trade approach to oil and gas emissions but argued it won’t actually stop oil and gas production outright. The provinces, who yet again weren’t consulted, may not agree. Besides, promises are one thing. The record is another.

It also emerged in Dubai that the Emirates, seventh largest oil producer, is expecting to increase its production by a million barrels a day (mbd) by 2030. This is not a new trend. According to the U.S. Energy Information Service, the UAE increased production of oil and hydrocarbon liquids like coal oil by 15.3 per cent between 2015 and 2022, from 3.7 mbd to 4.2, fourth-most of all oil-producing economies. That’s much faster than world output, which was up only 3.6 per cent since 2015, reaching 100.1 mbd last year.

The irony — maybe even the hypocrisy — is that three countries in the Americas have increased their petroleum output even more than this Middle Eastern oil sheikhdom has: the U.S., Brazil and, yes, us: Canada.

The Biden administration, which is promising 2030 emissions will be half 2005 levels, has so far failed to stymie oil and gas development. U.S. petroleum and liquids production has soared by 33.9 per cent since 2015, reaching 20.3 mbd in 2022. Two-fifths of the increase has been on Biden’s watch. The U.S., not Saudi Arabia, is now the world’s leading oil producer, accounting for fully 20 per cent of global supply.

The Trudeau government has pledged that 2030 oil and gas emissions will be 42 per cent lower than in 2005. This has led to tensions with the oil- and gas-producing provinces, which are resisting emissions caps for oil, gas and electricity. Ottawa’s opposition to liquefied natural gas sales even as the U.S. and Qatar are making great inroads in the world market has had industry leaders scratching their heads. Even so, since the Liberals came to power in 2015, Canada’s oil and gas production has grown second fastest globally, at 26.7 per cent, to reach 5.6 mbd last year. Much of this growth is due to big investments in the oil sands before 2015 but the production increase has been accommodated by pipeline expansion, with the federally-owned TMX soon to come on stream.

Neither Biden nor Trudeau is attending COP28 but Brazil’s president, Lula de Silva, stormed in at the head of a delegation of 2000 to repeat a pledge to cut 2030 emissions to less than half 2005 levels. Much of reduction results from reforestation, however, not phasing out oil and gas. And, to the surprise of attendees, Lula announced that Brazil will align itself more closely with OPEC. No shock there. Since 2015, Brazil’s oil and gas production has risen by 20 per cent, making it the 8th largest producer in the world at 3.8 mbd last year. It now evidently sees itself as a player.

Besides the U.S. Canada, Brazil and UAE, only Iraq (at 10.4 per cent) and Kazakhstan (at 4.5 per cent) have seen their oil production grow faster than the world average since 2015. The rest have had little growth, with seven countries registering declines, including 22.4 per cent in Mexico and 36.7 per cent in Nigeria, the biggest drop anywhere.

The standstill or even loss in oil and gas production in many oil-producing countries since 2015 is due to several factors. Oil prices dropped by three-fifths after 2014 and the pandemic caused another crash. More recently, Saudi Arabia and Russia have persuaded OPEC+ to constrain production and push prices to over US$80 per barrel — mainly in order to replenish their treasuries. In some places, including Ghana, the U.K. and Norway, old fields are depleting. Elsewhere, but especially in Africa and Mexico, crime and political instability continue to discourage development. Finally, in the face of lagging demand, investors have encouraged companies to distribute profits rather than invest in greenfield oil and gas projects.

But top producers like the U.S. and Canada are not holding back and governments aren’t stopping them. Phase-out is all short-term cost in pursuit of climate gains that won’t be realized for decades, if at all. Nor are politicians willing to eliminate the tax revenues and high-paying jobs the industry generates. With energy security crucial in an increasingly dangerous world, oil-consuming countries are finding that intermittent renewable energy and other high-cost energy sources are no substitute for fossil fuels.

As the federal Liberals sink in the polls, they face a many-ways existential choice. Do they pursue their climate promises and phase out oil and gas? Or do they secure the benefits of oil and gas production for years to come? Or, a third option: do they say one thing but quietly do the other? Is it all, as Shakespeare would say, “much ado about nothing”?

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Business

The Liberals Finally Show Up to Work in 2025

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From the National Citizens Coalition

Canadians Demand Action, Not More Empty Promises

The National Citizens Coalition (NCC) today calls out the Liberal government for their belated return to the House of Commons in 2025, after months of dodging accountability while Canadians grapple with skyrocketing costs, unaffordable housing, crime and chaos, and the fallout of a decade of failed Liberal policies.

While the Liberals dust off their seats, millions of Canadians have been struggling to pay for groceries, keep a roof over their heads, or envision a future where hard work still pays off. The NCC demands the government stop hiding behind empty rhetoric and deliver meaningful, common-sense actions to address the crises they’ve exacerbated.

“After years of empty gestures, empty rhetoric, and empty promises, showing up to Parliament in 2025 isn’t an achievement – it’s the bare minimum. Canadians are drowning in high taxes, inflation, and a housing crisis, and they deserve real solutions, not more speeches,” says NCC Director Alexander Brown.

The NCC calls on the Liberal government to immediately prioritize:

Immediate tax relief to put money back in the pockets of hardworking Canadians, including axing the HIDDEN CARBON TAX on our Great Canadian businesses.

Concrete steps to slash immigration back to responsible, sustainable norms; including a crackdown on fraudulent ‘diploma mills,’ and the abolishment of the ‘Temporary Foreign Worker’ program, to protect Canadian jobs, and the jobs of our youth.

Meaningful, immediate efforts to increase housing supply, by slashing red tape and bureaucratic roadblocks that drive up development costs.

An end to wasteful spending on pet projects and corporate handouts that do nothing for struggling families.

Steps toward meaningful criminal justice reform; including an end to Liberal catch-and-release bail for repeat violent offenders.

A plan to restore economic opportunity, so young Canadians can afford homes and build a future without fleeing the country.

And it’s time to Kill Bill C-69 — and Build Pipelines.

Working Canadians have heard enough platitudes – it’s time for results. The government must act decisively to fix the mess they’ve created or step aside for those who will. With just a few short weeks before the Liberals abscond for another vacation, IMMEDIATE ACTION is required to match the urgency of the moment, and to atone for the insult of the Liberals’ cynical, dishonest, “elbows up” campaign that left millions of young, working-age Canadians without hope for the future.

About the National Citizens Coalition:

Founded in 1967, the National Citizens Coalition is a non-profit organization dedicated to advocating for lower taxes, less government waste, and greater individual freedom. We stand for common-sense policies that once again put Canadians first.

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Economy

If the Liberal government has a plan for the future of conventional energy, now would be a good time to tell us what it is.

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From Energy Now 

By Jim Warren

During the Cold War, Western journalists and political analysts were typically unable to penetrate the secrecy surrounding the machinations of upper level Soviet politics. They would  struggle to discern who the top contenders were in the contest to replace the current party leader and what a new leader might mean for geopolitics.

The lack of trustworthy official information prompted Kremlin watchers to adopt some rather desperate and sometimes absurd methods for divining the twists and turns of internal Communist Party intrigues.


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For instance, they would look at photos of the party leadership on the reviewing stand for the annual May Day military parade. They would identify how close or far each member of the official party on the dais was sitting from the party leader. The proximity rankings were then compared with where people were positioned in relation to the leader at last year’s parade. Those who stood or sat closer to the leader than they did the previous year were presumed to be on their way up. Those who stood further away might be on their way to Siberia.

After one month in office it looks like the Carney government will require observers to go to similarly ridiculous lengths to figure out what cabinet ministers really mean when making public statements. Last week, a column by Calgary Sun’s Rick Bell discussed Danielle Smith’s demand that the Liberals quit talking in riddles. Bell suggested the Liberals would rather “stick handle” their way through questions about their policy positions than clearly indicate what those positions are.

Supporters of the oil, gas and pipeline sectors in the West remain uncertain and unconvinced when it comes to the Liberal government’s commitment to getting new pipelines built. This week’s Speech from the Throne certainly didn’t clarify the government’s plans for conventional energy production and exports.

The prime minister’s flip flopping has been particularly unhelpful. He has distanced himself from the comments he made at Kelowna early in the election campaign. While speaking there, Carney temporarily impressed supporters of new export pipelines by indicating he would use the emergency powers of the federal government to ensure oil pipelines are built to connect the prairies with the East and West coasts. Several days later he indicated he wouldn’t use those powers to override the objections of Quebec.

Currently, the prime minister says he is taking a wait and see approach. Last week he said a new pipeline extending from the prairies to a Canadian coastline is one of many possibilities depending on what sort of consensus develops around energy policy. When fumbling to explain his consensus approach, he produced the sort of word salad Danielle Smith could justifiably refer to as “talking in riddles.”

During the new government’s first Question Period on May 28, Andrew Scheer asked Carney what he intended to do about Bill C-69, the infamous No More Pipelines Bill. True to form Carney avoided providing a clear answer to the question. He responded with irrelevant canned talking points that failed to mention either the noxious Bill or increasing oil export opportunities.

Last week, Tim Hodgson, Canada’s new Energy Minister told people at a Calgary Chamber of Commerce event some of the of things they hoped to hear. According to a National Post report on the event Hodgson said he “promised to deliver new infrastructure to get Canadian energy to the coast and ultimately ‘to trusted allies’ outside the U.S.”

Hodgson also had comforting words for those concerned that Canada’s cumbersome project approval process could stymie new pipeline approval and construction. He said “Canada will no longer be defined by delay. We will be defined by delivery.”

Talk is cheap. It is difficult to imagine how costly pipeline construction delays and cancellations can be prevented without first getting rid of Bill C-69. If Hodgson was truly being sincere you’d think he would have announced plans are in the works to overturn C-69 or to at least make serious revisions to it. Since he never went that far in his remarks, the presentation fell far short of announcing that a credible plan is currently being considered.

The week prior to Hodgson’s Calgary speech, his cabinet colleague Steven Guilbeault announced that Canada did not need any new pipelines because the Trans Mountain was not operating at full capacity. Guilbeault also said that by the time a new pipeline could be built the global demand for oil and gas will have declined so much it wouldn’t be needed. Unfortunately, if a new pipeline project isn’t approved and completed within the next 15 years, Gulibeault’s second point will be on its way to becoming a self-fulfilled Liberal prophecy.

So who really speaks for the government on conventional energy policy? We’ve been presented with three different versions from three of the people who sit around the cabinet table, one of whom is supposed to be the boss. Apparently it is no longer the case that ministers are duty bound to refrain from criticizing or deviating from government policy. Yet, as far as we know, nobody has been reprimanded for announcing an incorrect version of the Liberals’ conventional energy policy.

We have been left to guess at the answers to critical questions. Has the government initiated a plan for making policy changes that deal with the concerns of the conventional energy sector and the governments of Alberta and Saskatchewan? If so, could someone please tell us what it is?

Transparency and clarity on the conventional energy file seem especially important at a time when Alberta is posed to hold a referendum on separation. Perhaps the Liberals don’t appreciate how much the lack of a coherent position in favour of building one or more new pipelines threatens national unity. Maybe their standard election winning formula of “screw the West, we’ll take the rest,” reflects what they have adopted as their long-term approach to the legitimate demands of alienated Westerners.

Barring the appearance of a clearly articulated official policy statement we might need to adopt a Canadian version of Kremlinology. That’s about the only means we would have to determine who, if anyone, is running the government—more specifically its conventional energy policy. Knowing which ministers speak for official government policy and which don’t could be useful.

We might need to ask questions like the following:

  • Which cabinet ministers get to sit at the cool kids’ table at the parliamentary cafeteria?
  • Which minister’s favourite companies and environmental groups have received the biggest grants and contracts since Carney became prime minister?
  • Which minister enjoys the most taxpayer funded flights and luxury hotel room stays to attend international gabfests like The World Economic Forum, in Davos, Switzerland or this year’s COP 30 conference in Brazil, etc.?
  • According to Parliament Hill gossip, who is most likely bound for Siberia—Steven Guilbeault or Tim Hodgson? And, when, if ever, will Jonathan Wilkinson be released from the backbench gulag and allowed back into cabinet? And why was he sent there in the first place—not green enough, or too green?
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