Op-Eds

May was a bad month for Canada’s beleaguered oil producers. First, the Norges Bank, which manages Norway’s sovereign wealth fund, announced its divestment from four oil sands producers, citing their “unacceptable greenhouse gas emissions.” Then, presumptive Democrat nominee Joe Biden announced that, if elected U.S. president, he would cancel the permits for the Keystone XL pipeline. And there was the little matter of an unprecedented plunge in global oil demand thanks to the COVID-19 pandemic. The Norges Bank’s decision is predicated on a misrepresentation of carbon pricing in Canada. Mr. Biden’s announcement represents a diplomatic failure, and a potentially fatal setback for a vital project. But those two developments underscore the...
The plunge in global oil demand from COVID-19 shutdowns worldwide represents an existential challenge for Canada’s petroleum producers. Oil prices have cratered as the cartel machinations of the Organization of Petroleum Exporting Countries (OPEC) unravelled in the face of the pandemic. Current forecasts expect that global oil demand will plummet 30 per cent or more from the pre-pandemic levels of roughly 100 million barrels per day. On Thursday, OPEC members and Russia (OPEC plus) agreed to cut 10 million barrels from daily production but also called on the U.S. and Canada to cut an additional five million barrels’ worth of production per day. After Friday’s meeting of G20 energy ministers, the G20 pledged to do “whatever it takes” to...
When Canada’s federal government makes its call on Teck’s Frontier oil sands project, it will show whether it actually subscribes to the economics of carbon pricing – or whether it intends to reduce greenhouse gases by central planning and government fiat. The federal cabinet has until the end of February to decide on whether to approve or prohibit the Frontier oil sands mining project. An assessment by a joint review panel has found that the project would likely cause significant adverse environmental effects but recommended that it would be in the public interest. Still, the project faces opponents who argue that approving Frontier goes against the federal government’s commitments to reducing greenhouse-gas emissions. The federal...
Old or spent oil and gas wells have accrued across Alberta in the thousands. The environmental risk in the province is high and rising, and the financial liabilities are, too: Analysis by the C.D. Howe Institute in 2017 showed that the public cost could be in the billions of dollars if companies designated as “financially fragile” by the Alberta Energy Regulator (AER) simply abandoned their wells for taxpayers to clean up – an extreme scenario that is not beyond contemplation. So amid reports about budget cuts, layoffs and alleged mismanagement on the part of the AER’s former CEO, the regulator has faced increasing pressure to change its one-size-fits-all rules, which use the valuations of operators’ assets...
Starting Dec. 16, the Alberta Court of Appeal will hear arguments regarding the constitutionality of the federal Greenhouse Gas Pollution Pricing Act – the so-called carbon-pricing “backstop," under which Ottawa would impose a price on greenhouse gas emissions in any province where it deemed provincial measures are not sufficiently stringent. The Alberta government’s challenge to the federal backstop is just the latest in a months-long string of appeals-court processes by governments in Ontario and Saskatchewan, where the legislation was upheld; those appeals are now headed to the Supreme Court, which will begin its hearings in March. So the legal arguments being deployed feel, at this point, quite well-trod. However, the federal...