We Predict a Depression Unmatched in Western Canadian Oilpatch History - When Bills C-69, C-74, C-48, and C-262 Become Law
Written By: Heather Douglas
Published: Energy Processing Canada Magazine (www.northnstar.ab.ca)
"Whomsoever controls the volume of money in any country is absolute master of all industry and commerce and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." James Garfield (1831-1881), 20th President of the United States, serving from March 4, 11881 until his assassination later that year.
Unfortunately, those who control the money -- that fuels investment in industry and commerce -- are often aided and abetted by those who draft the legislation and devilishly assault its very existence. The federal Trudeau government has proposed what it claims are "well-intentioned policies to rebuild public trust and advance indigenous reconciliation" while "advancing good projects to ensure energy resources get to markets responsibly."
Hogwash. We believe the federal bills are four strikes directly aimed at Alberta and Western Canadian fossil fuel production. Ottawa has no intention of making things equal between itself, as the federal regulator, and resource production which used to contribute mega-dollars to the treasury. These four bills will decimate a once healthy, vibrant industry.
Strike 1: Bill C-69 - Impact Assessment Act
The Senate is currently giving Bill C-69 its second reading. The bill proposed to establish the Impact Assessment Agency of Canada (IAAC) and, by enacting the Canadian Energy Regulator Act, to replace the National Energy Board (NEB).
We consider C-69 to be seriously flawed:
1. The new regulatory regime would be even more difficult and onerous -- it mandates expanded latitudes for climate change accounting, upstream emissions, and gender equity issues.
2. Even worse, it eliminates the current "standing test" for interveners -- makes it inevitable that all proceedings will be swamped by unaffected, but zealous, opponents (many financed by American environmental adversaries or international oil interests who oppose Canadian developments).
3. It begs for federal ministerial intervention -- based on personal prejudices or political ideologies - by introducing untested assessment processes that are experimental and burdensome while deferring the final 'national interest determinations' to cabinet.
4. It erects a large sign over the oilpatch - Canadian resource industry closed for business - and will chase investment capital away because of highly subjective regulatory decisions.
Canadian bankers are equally alarmed. They note that while American oil and gas spending increased last year 38 per cent to an eye-popping $120.0 billion(US) Canadian investment dropped 56 per cent (from $81.0 billion in 2014 to $45.0 billion in 2017). They also mention the $89.0 billion of pipeline and LNG (liquefied natural gas) projects that were either cancelled or abandoned in Canada to the tune of $27.0 billion in divestments.
When University of Guelph Professor Ross McKitrick testified before the Senate Standing Committee on Energy, the Environment and Natural Resources in late October, he identified three main problems:
1. The bill's nebulous new requirements for a project's "sustainability," a disgraceful and unscientific ill-defined concept, as is the call for an analysis of impacts on "the intersection of sex and gender."
2. The government's failure to enforce its own NEB laws. "It's currently unclear if the government will uphold the law and ensure that when applicants received approval, construction can proceed unobstructed," he stated in his evidence.
3. The legislation creates ambiguity about what information "will be dispositive" in review panel decisions, compounded by the fact that review committees must account for "any" scientific information and consider Indigenous knowledge. McKitrick believes this opens the proverbial door to "studies of dubious quality, including studies that are not repeatable."
Of course, the zealots believe the proposed legislation doesn't go far enough. "Without improvements, the federal government's commitment to restore public trust is on thin ice," says Patrick DeRochie, program manager of climate and energy with Environmental Defense Fund. He likes the new IAAC, the demise of the NEB, and the requirement that every panel to consider this country's climate change commitment. He also approves the $1.01 billion allotment of taxpayer's money (during the next five years) to support these changes.
DeRochie is scornful that Bill C-69 gives more authority to the offshore petroleum boards. "Despite demands from Atlantic Canadian environmental groups, fishermen, and Indigenous peoples, the federal government appears to have caved to demands from the oil and gas industry and has given more authority to the Canada - Nova Scotia Offshore Petroleum Board and the Canada-Newfoundland and Labrador Offshore Petroleum Board."
We predict the oilpatch is about to become unwilling and dejected spectators in the worst federal governmental debacle since the introduction of the National Energy Program on October 28, 1980. These hugely complex regulations need superhuman cooperation amongst several self-important federal departments and their bureaucrats to review, advise, and implement.
We like Tim McMillan's (Canadian Association of Petroleum Producers president and CEO) quote in the National Post (Sept 3, 2018), "We have a regulatory system in Canada that is so complex that not even the government or the regulator understands it."
Too bad the bookies haven't started taking bets on how much longer the new proposed process will take, given all the uncertainties. The World Bank says we have already have almost the slowest permitting process anywhere. Yeah Canada.
Strike 2: Bill C-74 - Greenhouse Gas Pollution Act
On June 21, 2018 the government passed Bill C-74, an omnibus piece of legislation, into law. Trudeau is busy fighting with various premiers on one component, his infamous carbon tax, or as he likes to call it, "the price for pollution."
When Catherine McKenna, minister of environment and climate change, appeared before the Standing Senate Committee on Energy, the Environment, and Natural Resources (May 22, 2018), she defended it pollution pricing component. "Pollution isn't free. Severe weather due to climate change is already costing Canadians billions of dollars a year in insurance costs. Across the country, Canadians have experienced first-hand devastating wild fires, extreme flooding, severe droughts, and stronger storms. Some estimates suggest that climate change will cost Canada's economy $5.0 billion/year by 2020.
When challenged by Senator Michael MacDonald, Nova Scotia, to say how much money the carbon tax would cost the typical middle-class family, the minister refused. "Recently, in the House of Commons, you were asked, and the government was asked to release all documents, in their original uncensored form, which would indicate how much the federal carbon tax will cost Canadian families." queried MacDonald. "Multiple inquiries for information have resulted in the release of documents with key information blacked out. I'm curious why this key information is blacked out."
Albertans already have an idea what this province's carbon tax has done to business. On January 1, 2018 the province raised the rate to $30/tonne which has increased operating./input costs, reduced profitability, added pressure to freeze or cut salaries, and caused delays in new or ongoing investments.
Strike 3: Bill C-48 - Oil Tanker Moratorium Act & Regulations
On October 23, 2018 Bill C-48 passed tis second reading in the Senate. This bill "prohibits oil tankers that are carrying more than 12,500 tonnes of crude oil or persistent oil (fuel oils, partly upgraded bitumen, synthetic crude oils, and No. 6 bunker fuel) from stopping, loading, and unloading at any ports from the northern tip of Vancouver Island to the Alaska border.
This bill is loaded with duplicity and two-facedness. Why only ban Alberta production from Canada's west coast and allow any other country's oil as traffic along any other coastline? In truth, it's a way to prevent this province's production from getting to Asia, thus hurting Alberta's economy and Alberta's jobs.
Strike 4: Bill C-262 - United Nations Declaration of Rights of Indigenous Peoples Act
On May 22, 2018 Bill C-262 received royal assent. It was a private member's bill aimed at ensuring Canadian laws are in harmony with the U.N.'s Declaration on the Right of Indigenous Peoples, introduced by NDP MP Romeo Saganash.
As Canadians, we are proud that our governments and citizens care about Indigenous rights. What worries us is the ongoing series of unintended mistakes that seemingly give minority Aboriginal groups veto over the majority of affected First Nations wishes for economic development and jobs.
Impact of Four Strikes?
We k now the international investment which once flowed into the oilpatch is down to a trickle. As the federal government enacts its four strikes - designed to bring Alberta and Western Canadian production to its knees - the oilpatch will realize the entire system is very easily controlled and a few powerful men at the top can originate a terrible depression. Really, who trusts this government to know how to modernize our resource sector? Certainly, they continue to ignore their fellow parliamentarians as well as global industry, financial, regulatory, and economic gurus.
Ottawa has no intention of making things equal between itself as the federal regulator and resource production which used to contribute mega-dollars to the treasury. These four bills will decimate a once healthy, vibrant industry.
Published: Energy Processing Canada Magazine (www.northnstar.ab.ca)
"Whomsoever controls the volume of money in any country is absolute master of all industry and commerce and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." James Garfield (1831-1881), 20th President of the United States, serving from March 4, 11881 until his assassination later that year.
Unfortunately, those who control the money -- that fuels investment in industry and commerce -- are often aided and abetted by those who draft the legislation and devilishly assault its very existence. The federal Trudeau government has proposed what it claims are "well-intentioned policies to rebuild public trust and advance indigenous reconciliation" while "advancing good projects to ensure energy resources get to markets responsibly."
Hogwash. We believe the federal bills are four strikes directly aimed at Alberta and Western Canadian fossil fuel production. Ottawa has no intention of making things equal between itself, as the federal regulator, and resource production which used to contribute mega-dollars to the treasury. These four bills will decimate a once healthy, vibrant industry.
Strike 1: Bill C-69 - Impact Assessment Act
The Senate is currently giving Bill C-69 its second reading. The bill proposed to establish the Impact Assessment Agency of Canada (IAAC) and, by enacting the Canadian Energy Regulator Act, to replace the National Energy Board (NEB).
We consider C-69 to be seriously flawed:
1. The new regulatory regime would be even more difficult and onerous -- it mandates expanded latitudes for climate change accounting, upstream emissions, and gender equity issues.
2. Even worse, it eliminates the current "standing test" for interveners -- makes it inevitable that all proceedings will be swamped by unaffected, but zealous, opponents (many financed by American environmental adversaries or international oil interests who oppose Canadian developments).
3. It begs for federal ministerial intervention -- based on personal prejudices or political ideologies - by introducing untested assessment processes that are experimental and burdensome while deferring the final 'national interest determinations' to cabinet.
4. It erects a large sign over the oilpatch - Canadian resource industry closed for business - and will chase investment capital away because of highly subjective regulatory decisions.
Canadian bankers are equally alarmed. They note that while American oil and gas spending increased last year 38 per cent to an eye-popping $120.0 billion(US) Canadian investment dropped 56 per cent (from $81.0 billion in 2014 to $45.0 billion in 2017). They also mention the $89.0 billion of pipeline and LNG (liquefied natural gas) projects that were either cancelled or abandoned in Canada to the tune of $27.0 billion in divestments.
When University of Guelph Professor Ross McKitrick testified before the Senate Standing Committee on Energy, the Environment and Natural Resources in late October, he identified three main problems:
1. The bill's nebulous new requirements for a project's "sustainability," a disgraceful and unscientific ill-defined concept, as is the call for an analysis of impacts on "the intersection of sex and gender."
2. The government's failure to enforce its own NEB laws. "It's currently unclear if the government will uphold the law and ensure that when applicants received approval, construction can proceed unobstructed," he stated in his evidence.
3. The legislation creates ambiguity about what information "will be dispositive" in review panel decisions, compounded by the fact that review committees must account for "any" scientific information and consider Indigenous knowledge. McKitrick believes this opens the proverbial door to "studies of dubious quality, including studies that are not repeatable."
Of course, the zealots believe the proposed legislation doesn't go far enough. "Without improvements, the federal government's commitment to restore public trust is on thin ice," says Patrick DeRochie, program manager of climate and energy with Environmental Defense Fund. He likes the new IAAC, the demise of the NEB, and the requirement that every panel to consider this country's climate change commitment. He also approves the $1.01 billion allotment of taxpayer's money (during the next five years) to support these changes.
DeRochie is scornful that Bill C-69 gives more authority to the offshore petroleum boards. "Despite demands from Atlantic Canadian environmental groups, fishermen, and Indigenous peoples, the federal government appears to have caved to demands from the oil and gas industry and has given more authority to the Canada - Nova Scotia Offshore Petroleum Board and the Canada-Newfoundland and Labrador Offshore Petroleum Board."
We predict the oilpatch is about to become unwilling and dejected spectators in the worst federal governmental debacle since the introduction of the National Energy Program on October 28, 1980. These hugely complex regulations need superhuman cooperation amongst several self-important federal departments and their bureaucrats to review, advise, and implement.
We like Tim McMillan's (Canadian Association of Petroleum Producers president and CEO) quote in the National Post (Sept 3, 2018), "We have a regulatory system in Canada that is so complex that not even the government or the regulator understands it."
Too bad the bookies haven't started taking bets on how much longer the new proposed process will take, given all the uncertainties. The World Bank says we have already have almost the slowest permitting process anywhere. Yeah Canada.
Strike 2: Bill C-74 - Greenhouse Gas Pollution Act
On June 21, 2018 the government passed Bill C-74, an omnibus piece of legislation, into law. Trudeau is busy fighting with various premiers on one component, his infamous carbon tax, or as he likes to call it, "the price for pollution."
When Catherine McKenna, minister of environment and climate change, appeared before the Standing Senate Committee on Energy, the Environment, and Natural Resources (May 22, 2018), she defended it pollution pricing component. "Pollution isn't free. Severe weather due to climate change is already costing Canadians billions of dollars a year in insurance costs. Across the country, Canadians have experienced first-hand devastating wild fires, extreme flooding, severe droughts, and stronger storms. Some estimates suggest that climate change will cost Canada's economy $5.0 billion/year by 2020.
When challenged by Senator Michael MacDonald, Nova Scotia, to say how much money the carbon tax would cost the typical middle-class family, the minister refused. "Recently, in the House of Commons, you were asked, and the government was asked to release all documents, in their original uncensored form, which would indicate how much the federal carbon tax will cost Canadian families." queried MacDonald. "Multiple inquiries for information have resulted in the release of documents with key information blacked out. I'm curious why this key information is blacked out."
Albertans already have an idea what this province's carbon tax has done to business. On January 1, 2018 the province raised the rate to $30/tonne which has increased operating./input costs, reduced profitability, added pressure to freeze or cut salaries, and caused delays in new or ongoing investments.
Strike 3: Bill C-48 - Oil Tanker Moratorium Act & Regulations
On October 23, 2018 Bill C-48 passed tis second reading in the Senate. This bill "prohibits oil tankers that are carrying more than 12,500 tonnes of crude oil or persistent oil (fuel oils, partly upgraded bitumen, synthetic crude oils, and No. 6 bunker fuel) from stopping, loading, and unloading at any ports from the northern tip of Vancouver Island to the Alaska border.
This bill is loaded with duplicity and two-facedness. Why only ban Alberta production from Canada's west coast and allow any other country's oil as traffic along any other coastline? In truth, it's a way to prevent this province's production from getting to Asia, thus hurting Alberta's economy and Alberta's jobs.
Strike 4: Bill C-262 - United Nations Declaration of Rights of Indigenous Peoples Act
On May 22, 2018 Bill C-262 received royal assent. It was a private member's bill aimed at ensuring Canadian laws are in harmony with the U.N.'s Declaration on the Right of Indigenous Peoples, introduced by NDP MP Romeo Saganash.
As Canadians, we are proud that our governments and citizens care about Indigenous rights. What worries us is the ongoing series of unintended mistakes that seemingly give minority Aboriginal groups veto over the majority of affected First Nations wishes for economic development and jobs.
Impact of Four Strikes?
We k now the international investment which once flowed into the oilpatch is down to a trickle. As the federal government enacts its four strikes - designed to bring Alberta and Western Canadian production to its knees - the oilpatch will realize the entire system is very easily controlled and a few powerful men at the top can originate a terrible depression. Really, who trusts this government to know how to modernize our resource sector? Certainly, they continue to ignore their fellow parliamentarians as well as global industry, financial, regulatory, and economic gurus.
Ottawa has no intention of making things equal between itself as the federal regulator and resource production which used to contribute mega-dollars to the treasury. These four bills will decimate a once healthy, vibrant industry.
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