Over the weekend, it was announced that Joe Biden will be the next President of the United States, ending days of speculation for the world.
The news has Albertans wondering just how this will affect not only them but their oil and gas industry. The sector has been through a tumultuous year, navigating its way through a global pandemic, seeing spending slashed, and enduring thousands of job layoffs.
The U.S. is Canada’s biggest customer of oil and natural gas exports, and with Biden’s statements surrounding energy and the environment during his campaign, it could have massive ramifications for Alberta.
Biden has not only made conflicting reports and statements around fracking, but comments on policy changes, from promising to ban the issuance of new drilling permits on federal lands and water to Keystone XL pipeline, and saying he will transition the U.S. from fossil fuels and make transitions towards clean energy could be seen as a setback for oil and gas upon first glance.
Biden’s climate and clean energy package and plan is listed at $2 trillion.
Premier Jason Kenney posited the importance of Alberta’s oil and gas industry to the U.S. during his congratulatory remarks to President-elect Biden and Vice President-elect Kamala Harris in his statement.
Kenney states, “The United States is by far Alberta’s largest trading partner,” adding “U.S. energy security is dependent on Alberta as the United States’ largest source of oil imports. Much of the American economy is fuelled by Alberta energy.” He also said they look forward to ensuring this vital economic partnership continues.
This is of key interest to Kenney and the province, notably because the pipeline represents a $1.5 billion investment from Alberta, as well as a $6 billion guarantee in 2021.
The 1,947 kilometre project – already under construction – has created thousands of jobs for people during COVID-19 in both Canada and the U.S., and expects to see 2,000 more construction workers hired in Alberta, and providing a shot in the arm for both country’s economies.
Once operational, the pipeline will carry 830,000 barrels per day from Hardisty, Alberta to Steele City, Nebraska. The project will contribute roughly $2.4 billion to Canada’s GDP.
Though the pledge against new drilling permits on federal lands can be seen as damaging on its face, it could be of interest for Canadian crude exports, potentially opening up investments for the Canadian oil sector.
During Harris’ debate in October, she said “Joe Biden will not ban fracking.” Biden also offered a rebuttal to Donald Trump’s claim that he would. This was a highly debated topic during the election trail. His aforementioned energy plan states, “aggressive methane pollution limits for new and existing oil and gas operations.”
As there are many Albertan companies with existing operations and projects within the U.S., how the Biden administration moves forward on comments toward the energy and oil and gas sector is something companies will be monitoring with great interest now, and into the future.