GOLDSTEIN: Kissing off oil and gas sector cuts our economic throat

Article content

Canadians should be alarmed about how many business opportunities will be lost because Prime Minister Justin Trudeau thinks of Canada’s oil and gas sector primarily in terms of downsizing it.

Article content

Ditto the inaccurate impression created by his environment ministers since 2015 that Canada’s oil and gas sector is on the way out because of Trudeau’s carbon pricing policies to fight climate change.

Article content

In fact, Canada is the world’s fifth largest producer and fourth largest exporter of oil and natural gas.

The federal government’s own Canada Energy Regulator projected in 2019 that Canada’s oil sector will grow by almost 50%, and the natural gas sector by 30%, from 2018 to 2040.

The federal government’s own natural resources ministry says that in 2020, Canada’s oil and gas sector provided 178,500 direct jobs and supported 415,000 more, accounted for 5.7% of GDP at $118 billion, 16% of exports at $86 billion and $38 billion in capital expenditures.

Article content

It says, “petroleum, natural gas, coal and hydrocarbon gas liquids are vital components of Canada’s energy mix, and continue to be a leading driver of employment, exports and broader economic activity.”

The Financial Post recently reported that according to a Royal Bank of Canada analysis, the oil and gas sector will pay $48 billion this year in taxes and royalties to Canadian governments, $64 billion next year.

The U.S. Energy Information Administration says oil and natural gas will continue to be the dominant sources of energy in America in 2050, and while renewable energy will expand rapidly, 70% of the world’s energy in 2050 will be provided by fossil fuels.

The future of Canada’s oil and gas sector lies in producing them with the fewest greenhouse gas emissions possible while competing globally for market share of a huge economic sector.

Article content

This while taking advantage of the fact the G7 nations, including Canada, and the European Union, classify natural gas as a transitional form of green energy, particularly when it replaces coal to generate electricity.

The economic danger posed by the Trudeau government’s lackadaisical attitude towards Canada’s oil and gas sector was reflected in Trudeau’s downplaying of shipping liquified natural gas (LNG) to Germany during German Chancellor Olaf Scholz’s visit to Canada last week.

Scholz is desperate to find new sources of natural gas as Russian President Vladimir Putin turns the energy screws on Germany by curtailing Russian exports to punish it for supporting Ukraine in the face of Putin’s invasion.

Article content

Germans face skyrocketing costs for natural gas to heat their homes this winter and possible rationing.

Trudeau said the business case for shipping natural gas directly from Canada to Germany is weak because of the lack of pipelines and LNG conversion plants needed to move it from Western Canada to the East Coast and from there onto ocean-going tankers headed to Europe.

He said his government will look at streamlining regulatory approval of LNG infrastructure if the economic case for it becomes viable, but his main focus is on decarbonizing Canada’s economy.

But Timothy Egan, president and CEO of the Canadian Gas Association, told the Globe and Mail the biggest impediment is in fact regulatory uncertainty created by the Trudeau government.

“There’s an incredible business case if the regulatory framework is clear,” Egan said, but “are the environmental approval processes going to be fast enough and clear enough? How is it that this can happen so quickly in the United States and it can’t happen as quickly in Canada?”

lgoldstein@postmedia.com