Oil & Gas Editorial: Green Grass & Neighbourly Quarrels
Canada’s prime minister, Justin Trudeau, last week sparked a furious backlash after claiming Alberta’s oil sands industry needed to be “phased out”.
His comments, made at a town hall meeting in Ontario, echo the sentiment of an administration that is pledged a lower carbon economy, phasing out subsidies for the hydrocarbons industries and investing $200 million a year in clean technologies.
In April 2016, Trudeau signed on to the Paris Agreement on climate change “to pursue efforts to limit the [global] temperature increase to 1.5 °C above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change”.
The prodigious expansion of Alberta’s Athabasca oil sands in a $100 per barrel oil environment marked a tectonic shift from Canada's traditional economic powerhouse, Ontario, to the resource rich West. However, with 26 per cent of the GDP of “Wild Rose Country” derived from the energy sector, the oil price nosedive that began at the end of 2014 has left Alberta struggling with recession after years of outperforming expectations.
Four thousand kilometres from the oil sands, a 70-year old man will be braving the rain in Washington DC to solemnly swear that he will faithfully execute the Office of President of the United States. President Donald Trump will become the United States’ 45th President and the oldest person at inauguration to ever have assumed the office. Unlike his Canadian counterpart, Trump has stated that he would “cancel” the Paris climate deal signed by his predecessor and ramp up the exploitation of natural resources across the nation to “unleash America's $50 trillion in untapped shale, oil, and natural gas reserves”.
Prior to his election, Trump also affirmed that he would “open onshore and offshore leasing on federal lands”, and make the US “totally independent of any need to import energy from the OPEC cartel”. Trump’s “America First Energy Plan” could set the world’s largest energy producer and second largest consumer onto the path of net energy exportation by 2026, as projected by the US Energy Information Administration.
Although these neighbours will be sharing a fence (not literally, we hope), the green of the grass on either side could not be more different.…