From the Fraser Institute

By: Julio Mejía, Elmira Aliakbari and Tegan Hill

According to a recent analysis by the Conference Board of Canada think-tank, the cap could reduce Canada’s GDP by up to $1 trillion between 2030 and 2040, eliminate up to 151,000 jobs by 2030, reduce federal government revenue by up to $151 billion between 2030 and 2040, and reduce Alberta government revenue by up to $127 billion over the same period.

According to an announcements last week by Premier Danielle Smith, the Alberta government will use the Alberta Sovereignty within a United Canada Act to challenge Ottawa’s proposal to cap greenhouse gas emissions from the oil and gas sector at 35 per cent below 2019 levels by 2030.

Premier Smith, who said the cap will harm the economy and represents an overstep of federal authority, also plans to prevent emissions data from individual oil and gas companies from being shared with Ottawa. While the federal government said the cap is necessary to fight climate change, several studies suggest the cap will impose significant costs on Canadians without yielding detectable environmental benefits.

According to a recent report by Deloitte, a leading audit and consulting firm, the cap will force Canadian firms to curtail oil production by 626,000 barrels per day by 2030 or by approximately 10.0 per cent of the expected production—and curtail gas production by approximately 12.0 per cent.

Deloitte estimates that Alberta will be hit hardest, with 3.6 per cent less investment, almost 70,000 fewer jobs, and a 4.5 per cent decrease in the province’s economic output (i.e. GDP) by 2040. Ontario will lose 15,000 jobs and $2.3 billion from its economy by 2040. And Quebec will lose more than 3,000 jobs and $0.4 billion from its economy during the same period.

Overall, the country will experience an economic loss equivalent to 1.0 per cent of the value of the entire economy (GDP), translating into lower wages, the loss of nearly 113,000 jobs and a 1.3 per cent reduction in government tax revenues. Canada’s inflation-adjusted GDP growth in 2023 was a paltry 1.3 per cent, so a 1 per cent reduction would be a significant economic loss.

Deloitte’s findings echo previous studies. According to a recent analysis by the Conference Board of Canada think-tank, the cap could reduce Canada’s GDP by up to $1 trillion between 2030 and 2040, eliminate up to 151,000 jobs by 2030, reduce federal government revenue by up to $151 billion between 2030 and 2040, and reduce Alberta government revenue by up to $127 billion over the same period.

Similarly, another recent study published by the Fraser Institute found that the cap would reduce production and exports, leading to at least $45 billion in lost economic activity in 2030 alone, accompanied by a substantial drop in government revenue.

Crucially, these huge economic costs to Canadians will come without any discernable environmental benefits. Even if Canada entirely shut down its oil and gas industry by 2030, eliminating all GHG emissions from the sector, the resulting reduction in global GHG emissions would amount to a mere four-tenths of one per cent with virtually no impact on the climate or any detectable environmental, health or safety benefits.

Given the demand for fossil fuels, constraining oil and gas production and exports in Canada would likely merely shift production to other countries with lower environmental and human rights standards such as Iran, Russia and Venezuela. Consequently, global GHG emissions would increase, not decrease. No other major oil and gas-producing country has imposed a similar cap on its leading export sector.

The Trudeau government’s proposed cap, which still must pass the House and Senate, would further strain an already struggling Canadian economy, and to make matters worse, do virtually nothing to improve the environment. The government should cancel the cap plan given the economic costs and nonexistent environmental benefits.

Julio Mejía

Policy Analyst

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute

Tegan Hill

Director, Alberta Policy, Fraser Institute

Actor Billy Bob Thornton portraying the character Tommy Norris in an official trailer for the Paramount Plus series “Landman.” (Screen Capture/Landman, Official Trailer, Paramount+)

From the Daily Caller News Foundation

By David Blackmon

Oil companies have always presented easy targets for demonization by the news and entertainment industries. Their operations are highly visible — the flares from a shale well can be seen from many miles distant — the prices they charge for their products can strain family budgets, and they have generally done a lousy job of engaging with the media and defending themselves.

Thus, they typically present the proverbial low-hanging fruit to be exploited by lazy script writers in Hollywood. Those who were in the industry in the early years of the Obama presidency will well remember that pretty much every TV drama series aired at least one episode centered on some highly improbable, often impossible, scenario in which people were killed by a hydraulic fracturing — or “fracking” — accident. Such stuff never happened in real life, but it sure made for compelling entertainment for audiences who did not know that to be the case.

Given this history, it came as no small surprise when the lead character in the new Paramount series “Landman”, the newest offering from “Yellowstone” creator Taylor Sheridan, delivered a stirring 2-minute monologue in defense of America’s oil and gas producers in Episode 3 of the show’s first season. Set in the aftermath of a tragic, fatal Permian Basin oilfield accident that actually could happen in real life, the scene features lead character Tommy Norris, played to near perfection by Billy Bob Thornton, schooling a young, environmentally conscious lawyer who is looking for someone to blame for the accident on the reasons why oil and gas are highly unlikely to be replaced by wind energy in her lifetime.

“You have any idea how much diesel they have to burn to mix that much concrete or make that steel and hold this **** out here and put it together with a 450-foot crane,” Norris says, pointing to a nearby group of 400 ft. wind turbines. “You want to guess how much oil it takes to lubricate that ****ing thing or winterize it? In its 20-year lifespan it won’t offset the carbon footprint of making it. And don’t get me started on solar panels and the lithium in your Tesla battery.”

The monologue goes on for another minute and a half, with Norris detailing all the myriad products made with oil and natural gas, and the fact that, “if Exxon thought them ****ing things right there were the future, they’d be putting them all over the ***damn place.” He isn’t wrong about that last part, by the way. ExxonMobil and its fellow major oil companies like Shell and BP have proven themselves to be pretty much agnostic about the nature of the energy-related projects they’re willing to pursue in recent years.

Those companies and many other traditional oil companies are willing to invest in most any project they believe to be profitable, sustainable and able to deliver strong rates of return to investors. Where wind energy is concerned, both Shell and BP spent years investing heavily in such projects but have been backing away from such investments over the last year as they have failed to produce adequate returns. ExxonMobil, meanwhile, is investing heavily in carbon capture, hydrogen, and even lithium production as part of a growing portfolio of projects in its Low Carbon Solutions business unit.

Back to the Tommy Norris monologue: When I re-posted the clip on LinkedIn and at my Substack newsletter, it went viral, indicating a high level of interest in what Thornton’s character had to say. That may be indicative of a rising recognition of the reality that the US government and global community have in recent years thrown away trillions of dollars in failing attempts to subsidize non-viable, unsustainable, and unprofitable alternatives to oil and natural gas to scale.

Perhaps, then, it is no coincidence that Episode 3 of “Landman” aired on the same day when the media widely reported the COP29 climate conference in Azerbaijan had ended in failure. It also came amid continuing reports that the Trump transition team is developing detailed plans to refocus US energy policy back to Trump’s promised “drill, baby, drill” orientation.

The times are a-changing, and guys like Tommy Norris will look like prophets soon.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.