It is widely anticipated that President Elect Donald Trump’s pro energy platform and proposed corporate tax cut will kick start an American oil and gas industry already outpacing its Canadian counterpart.
CEO’s of two prominent intermediate oil and gas companies were interviewed recently and offered insight about the challenges facing Canada’s oil and gas industry amidst a newly elected oil and gas development-friendly President of the United States. Birchcliff Energy CEO, Jeffery Tonken and Peyto Exploration & Development CEO, Darren Gee both expressed major concern about Donald Trump’s presidency bringing a competitive disadvantage to Canada’s oil and gas industry. Both asserted that his relaxed regulations for United State’s energy production will cause Canadian oil and gas producers to compete in the market with one hand tied behind their backs.
This is something which will need to be addressed by both the Trudeau and Notley governments. It also raises alarming questions about the consultation process which gave birth to Alberta’s carbon tax.
Large oil and gas companies with major stakes in Alberta’s oilsands were heavily involved in the process. However the same cannot be said for small, intermediate and even a few of the large cap oil and gas companies. Imperial Oil, one of the largest oil companies in Canada, was not consulted and neither was Birchcliff Energy, Peyto Exploration or dozens of other oil and gas companies collectively investing billions into this province and providing jobs to hundreds of thousands of Albertans.
This is in stark contrast to the consultation process which took place during the royalty review. Dave Mowat, CEO of ATB, made a point of calling or meeting with most of the executive leadership of almost every intermediate and large oil and gas company in Alberta. The royalty consultation process also took nearly twice as long as the climate change review. Why is that? Perhaps more opinions were collected before rushing to such an important decision? The royalty review resulted in a neutral to slightly positive impact on the industry where the climate review ended in a result tremendously negative and costly to producers. Interestingly enough, the oil and gas industry generally views Alberta Energy Minister Marg McCuaig-Boyd as being genuinely concerned about the industry’s competitiveness and Environment Minister Shannon Phillips and Premier Rachel Notley as enemies of the industry who seek to punish its success and resilience.
It’s obvious government officials on the left side of the political spectrum are eager to pass harsh regulations (for which they are proponents), but other policies, such as approving pipelines or maintaining a modest oil and gas royalty regime, must face a long and arduous consultation process. In one instance they push the industry backwards, in another, they prevent it from moving forward. With the NDP and Liberals in power, it’s safe to say the oil and gas industry would prefer the latter to the former.