Review of energy cost inputs - more regulations = delays, higher prices
|By: Canadians For Affordable Energy
Canada faces persistent uncertainty about trade and competitiveness. Finance Minister Bill Morneau’s 2018 Budget did nothing to address these concerns. “I don’t think anybody expected the minister to rewrite the tax code overnight,” said John Manley, who served as Canada’s finance minister under Jean Chrétien and is now president and CEO of the Business Council of Canada. “But this budget all but ignores Canada’s serious tax competitiveness challenges, sending an unfortunate signal to entrepreneurs and companies that are looking to invest and grow."
Can we perhaps find something positive elsewhere? Ottawa’s recently unveiled legislation to assess natural resource projects promises to shorten timelines while expanding what will be up for review. Smaller projects will be examined within 300 days and larger ones within 600 days – down from 730. This appears to be good news. Yet, the assessments of proposed infrastructure projects won’t be limited to environmental issues but will also cover health, the economy, social issues, gender and Indigenous rights. Uh-oh. If it seems like an impossible task – more review, in less time – worry not: regulators will also be granted the ability to extend those shortened deadlines when necessary. In other words, the promised timeliness guarantee is already overboard. These reforms are a regulatory game of Snakes & Ladders without any ladders.
The Financial Post reported, “the long-awaited environmental assessment reform … could dramatically alter how projects like pipelines, power lines, hydro dams and mines are reviewed.” As one analyst said, “We see nothing in these proposed changes that will attract incremental energy investment to Canada.” Less investment in our country’s traditional resources twinned with an emphasis on costly renewables will mean high energy prices, fewer Canadian resource jobs and less prosperity.
Increasingly it appears that this is precisely want the federal government wants. As the Prime Minister said one year ago, “We can’t shut down the oilsands tomorrow. We need to phase them out. We need to manage the transition off of our dependence on fossil fuels but it’s going to take time and in the meantime we have to manage that transition.”
Justin Trudeau did apologize – “I said something the way I shouldn’t have said it” – but it was nonetheless a rare moment of honesty. His explanation didn’t admit any policy error, merely that the Prime Minister had misspoke. Or as Trudeau’s long-time friend and closest political advisor Gerald Butts said when running World Wildlife Federation Canada (WWF), “One hundred per cent sustainable, renewable energy is possible and economical by 2050 if we start the transition today.”
But this future can only be realized by government choking Canada’s oil and gas industry – by restricting pipelines (check), subsidizing green energy (check), making affordable hydrocarbon energy look expensive with a carbon dioxide emissions tax (check), and drowning the extraction of those resources in reams of red tape (now underway).
Balancing the environment, economy & B.C. politics
But if you think the Trudeau government isn’t serious enough about land locking Alberta’s oil patch you have friends in British Columbia’s government.
The Green-NDP coalition government has alarmed the country’s carbon pricing enthusiasts by fighting Kinder Morgan’s Trans Mountain pipeline expansion. “[B.C. Premier] John Horgan is actually trying to scuttle our national plan on fighting climate change,” the prime minister said. “By blocking the Kinder Morgan pipeline, he’s putting at risk the entire national climate change plan, because Alberta will not be able to stay on if the Kinder Morgan pipeline doesn’t go through.” So much for balancing the economy with environmental stewardship.
It will never happen: B.C. Greens
B.C. Green party leader Andrew Weaver tweeted, “it is virtually certain” the Trans Mountain pipeline expansion will never be built. The infrastructure project does not have “social licence” and won’t earn it from residents in B.C.’s Lower Mainland. The pipeline’s next obstacle could be determined protestors. We’ll watch to see how far the Trudeau Liberals will go to uphold the law.
Fossil fuels a dying industry?
Meanwhile, the United States is expanding its production of oil, natural gas and coal and exporting more to overseas markets. The U.S. Energy Information Administration (EIA) reports in its Annual Energy Outlook, “Strong domestic production coupled with relatively flat energy demand allow the United States to become a net energy exporter over the projection period in most cases.”
Looking to 2050, EIA estimates the use of hydrocarbon fuels will be steady and dip just slightly below 80% in 2034, but continue to supply more than 79% of energy in 2050. Meanwhile, renewables will grow by 70% and provide less than 15% of U.S. energy. So much for fossil fuels being a dying industry.
“Despite all of the hype, hope, cheerleading, fuel standards, portfolio standards, and taxpayer subsidies for renewable energies like wind and solar [editor’s note: see Trudeau’s Canada], America’s energy future will still rely primarily on fossil fuels to power our vehicles, heat and light our homes, and fuel the U.S. economy,” concludes the American Enterprise Institute. “America’s energy future will look a lot like it does today with fossil fuels providing American consumers and businesses with low-cost, dependable and reliable energy for about 80% of [U.S.] energy needs.”
Canada is squandering its traditional competitive advantage over U.S. energy producers. As a result, Canadians will pay more for its energy needs. Worse for us: U.S. consumers will purchase Canada’s oil and gas for lower prices than Canadian households and businesses pay since they won’t be hit with Ottawa’s tax on carbon dioxide emissions.
Canadians for Affordable Energy
Canadians for Affordable Energy · Canada