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Elections and Inquisitions

Well it sure has been a busy week here in Albertaland and Canada. It seems that it has been a week full of launches, with new initiatives popping up all over the place, previously announced undertakings finally taking shape and getting underway and, finally, inevitabilities finally being unleashed.

 

What do I mean by all this? Simple. In Alberta we had the official launch of the House Committee on Unalbertan Activities which is the inquisition into foreign funds messing around with our livelihood, closely followed up by the UCP announcing an official inquisition into the Alberta Energy Regulator (but not the board, because they were punted) and, of course, Justin Trudeau finally went to visit his good friend the Governor General to get royal assent to officially start his election campaign against the forces of Evil and their nefarious Dark Lord Stephen Harper and all those other people.

 

So I thought it might be useful to take a look at all these things and for the benefit of the reader group here provide a synopsis of what this is all about and maybe share some unvarnished thoughts, because I have some. Big surprise. And they may ruffle some feathers. Maybe not a surprise.

 

Warning – I HATE POLITICS. From all parties equally. Some of the views herein reflect that. Sorry.

 

Let’s start with the Federal election, because that’s the easiest.

 

While campaigning goes on continuously in Canada, our actual elections tend to be brief affairs.

 

Although fixed election dates like both Canada and the United States both have tend to lead to non stop campaigning, Canadian spending rules (and our relative cheapness) mean that we don’t start unofficially campaigning in earnest until about six months before an election and, once the Prime Minister asks for an election to be called, the official election period is typically less than 50 days, even though it will often seem like 500.

 

So, our election writ was dropped on Wednesday the 11th and our future will be decided by October 21st. 40 days. Wow. And our first debate was on the 12th, last night! Except it wasn’t really a debate because the party leaders can actually choose how many and which debates they will attend, which in theory could lead to an awkward situations where a leader could be debating himself. As it regards this particular debate, missing from the stage was Prime Minster Justin Trudeau, who just couldn’t be bothered.

 

So, here’s our election in a speed-dating format

 

Liberal Party of Canada. (the current government)

Leader:                 Justin Trudeau

Slogan:                 Choose forward

Likes:                    Spending. Power. Vote-rich regions that keep them in power. The Middle class and those working hard to get there. Socks. Costumes. Apologizing

Dislikes:               Stephen Harper. Stephen Harper. Oil. Stephen Harper. Conservatives in general. Alberta (so we’re told)

Claim to Fame:  Once balanced the budget. Nice socks. Decent economy. Always very remorseful. Building a pipeline for Alberta. Canada’s natural governing partyTM

Achilles Heel:    Arrogance. Lying. SNC Lavalin. Hypocrisy. Building a pipeline for Alberta.

 

Conservative Party of Canada. (official opposition)

Leader:                 Andrew Scheer

Slogan:                 It’s time for you to get ahead

Likes:                    Cutting taxes. Cutting spending. The energy sector. Pipelines. Stephen Harper. Chocolate Milk.

Dislikes:               SNC Lavalin. Liberals. Canada Food Guide. Bills C69 and C48. Taxes, especially if they are carbon.

Claim to Fame:  Didn’t screw up the country during the Great Recession. Capable government in waiting and nowhere near as extreme as people make them out to be

Achilles Heel:    Social conservative influence in the party. Stephen Harper.

 

New Democratic Party.

Leader:                 Jagmeet Singh

Slogan:                 in it for you

Likes:                    Taxes on rich people (loosely defined), Pharmacare. Social programs. The environment. Immigration.

Dislikes:               Energy. Stephen Harper. Spending cuts. The vote-stealing Green Party.

Claim to Fame:  Official Opposition when the Liberals got eviscerated in 2011. The ghost of Jack Layton (sadly fading)

Achilles Heel:    A complete lack of energy. A traditional centre left base that sees support for the NDP as the vote split the Conservatives need so their support is bleeding to the centre and to the Greens.

 

Green Party of Canada.

Leader:                 Elizabeth May

Slogan:                 Forward together

Likes:                    The environment (duh). The spotlight.

Dislikes:               Oil and gas (icky), industry, the economy, Israel, Canada (apparently), Muslims, pipelines

Claim to Fame:  Plucky up and coming party that is finally polling at 10% and might make a breakthrough to become the balance of power in a minority situation

Achilles Heel:    Polling at 10% which means that the media and voters are finally going to pay attention to them and read their absurd economy killing fantasy platform.

 

People’s Party of Canada.

Leader:                 Maxime Bernier

Slogan:                 Strong and Free

Likes:                    Maxime Bernier. Protectionism. Pandering to all the ‘phobes they can

Dislikes:               Immigration. If you’re from somewhere else – probably you. Andrew Scheer

Claim to Fame:  Hiding place for alt-right racists, disaffected conservatives who haven’t figured out the first point. A leader who almost won the Conservative party leadership race.

Achilles Heel:    A satirical party has put up a candidate named Maxime Bernier to run against the leader, Maxime Bernier in the only riding they have a chance of winning, so it’s a toss-up as to whether his misguided supporters will be able to tick the right box. Oh, and the racism.

 

There is also still a Bloc Quebecois party, but I don’t like writing about separatist parties so I won’t.

 

Well, there you have it. 38 days to go. Read up, vote early and vote often.

 

Alright, on to the challenges and inquistions.

 

And before anyone gets too offended – I refer you back to point number one – I HATE POLITICS!

 

Supreme court challenge on Bill C69 otherwise known as the “no-pipelines” billTM

 

This I can get behind. The Alberta government doesn’t like Bill C69, thinks it’s discriminatory against a primary industry and infringes on provincial rights. I agree on many of these points. Why wouldn’t you appeal it? It’s their right, just like, say, stakeholders appealing a pipeline project.

 

Next!

 

Review of the Alberta Energy Regulator (AER)

 

This was a campaign promise and many stakeholders have issues with the AER from a regulatory, mission and execution standpoint. Any good regulator should be under constant review anyway.

 

But please don’t make it all about approvals. A regulator is there to regulate, not facilitate. The AER does great work. Do approvals take too long? Maybe. But which approvals take too long? What are they approving? Are the projects comparable? Are we talking MEG’s SAGD expansion as compared to, say, a drilling program in the Permian? A Deep Basin gas well in an environmentally sensitive area that is the watershed for much of agricultural Alberta versus a Saskatchewan Bakken oil well on the open prairie? Do we even need the times to be shorter? Are any of these situations really comparable?

 

I guess my point is, if we are reviewing the AER to ensure we continue to have the most robust regulatory regime in the world, able to operate fairly under predictable rules and able to render decisions in a reasonable and timely manner relative to the project at hand, then great. That is a competitive advantage.

 

But if the review is just political theatre to achieve a predetermined outcome, gut staff and shave a week off approval times, that’s not a great use of time. In my opinion.

 

Next!

 

Public Inquiry into anti-Alberta energy campaigns

 

Or, the House committee on Unalbertan Activities.

 

This is one of those things that the UCP announced as part of their election strategy that I thought was a bit pandering, but well-intentioned – a review of some of the purported evidence of foreign NGO interference in the energy sector. This review was presumed to build off the work of Vivian Krause, who has catalogued the many millions of dollars that flow into Canadian environmental groups to support their anti fossil fuel causes. This of course has led many to believe that there is some form of sinister campaign to kneecap the Alberta economy by American dark money. This is one of those things that many in the sector talk about but I don’t think too many believe, but this was going to be a nod to those true believers – a “sure, we’ll take a look at that” And I was really hoping it wouldn’t happen or if it did, it would be a committee, working quietly in the background.

 

Well of course now that it’s rolled out, it’s actually way worse than I thought it could be. Instead of a review, we have a full-blown public inquiry.

 

The panel is going to travel to various locations in Canada and the US to presumably meet with some of these sources of dark money and has the ability to call/compel witnesses to testify – certainly in Alberta and perhaps beyond.

 

Not only that – there’s a website that you can go to and report what you think are abuses. Call it what it is – a snitch line.

 

Not only does this conjure up images of Joseph McCarthy, but it reminds a testy Canadian electorate at the absolute worst time of another Conservative proposed snitch line from the last Federal election. This will do Andrew Scheer no favours during the election process as it plays directly into the hands of a Liberal party that wants to paint all conservatives as politically motivated, mean-spirited anti-environment jihadis. The only way it could have been a more convenient political cudgel would be if  Stephen Harper was commissioner.

 

Look, I may sound a bit over the top, but this isn’t going to work out like the government thinks it will either in process or conclusion. It is already back-firing and it’s hardly even started.

 

The reaction to this has been cringe-worthy. We’ve got Amnesty International calling us out. We’ve got the Premier of the province forced to call out Amnesty International. The hashtag #ReportAnAlbertan is trending on Twitter. It’s absurd.

 

Look, can I make all this easier and just cut to the chase? Great.

 

Ok, are US, international and Canadian ENGO’s engaging in a campaign to landlock Alberta oil with the stated goal of reducing GHGs and phasing out the fossil fuel industry? Yes! Are they targeting pipelines as part of that strategy? Yes! Are they targeting Canada because we are an absurdly self-loathing, rule of law obsessed and progressive globalist attention-seeking soft target? OF COURSE THEY ARE! It’s their jobs! Is it a conspiracy? I guess if you consider parties working together to achieve a desired result against a colossal and well-financed opposition and, let’s face it, a population that cares more about cat videos than energy infrastructure a conspiracy, then yeah. It is.

 

But it’s not a “conspiracy” conspiracy (like the lunar landings). And the movement isn’t just targeting Canada. It just feels that way because it works better here. Vivian Krause has done a great job following the money. But the money doesn’t lead to a smoking gun, it leads to anti fossil fuel environmental groups. Whose purpose is to develop plans and campaigns to protect the environment. We don’t need a public inquiry to find this out, just Twitter.

 

Similarly, we don’t need government to ferret out the bad actors in this. We know who they are. They are the ENGO’s who whisper sweet nothings in the ears of First Nations, get them to sponsor challenges and lawsuits and conveniently disappear to the next cause if they lose or after the photo op. It’s know-nothing celebrities doing drive-by smears of what is generally a well-run and conscientious industry. But it’s also pipeline operators and marginal producers who cut corners and defer maintenance and get caught out when something goes sideways. It’s right leaning NGOs like the Koch Foundation funneling money into right leaning and fossil fuel industry supporting think tanks like the American Enterprise Institute, the Fraser Institute and similar groups. It’s everywhere.

 

Don’t go looking for dark money unless you want to ferret out the whole truth, not just one side.

 

But this particular inquiry doesn’t appear to want to strike that balance. It caters to the lowest common denominator, is unnecessarily confrontational and, with a seemingly predetermined outcome, it’s just political theatre. How can it be anything but theatre – at $2.5 million, it barely has a budget.

 

As such, it won’t change any hearts and minds. Those who believe will continue to believe. The rest of Canada outside of Alberta won’t be moved, won’t care and thinks we’re off our rocker. The left and the ENGO cohort will continue to have a field day mocking everything that is going on.

 

The end result for people like me is that I am wanting to promote and defend the oil and gas industry and instead of being proactive and operating from a position of strength, I’m forced to fight a panicked rear-guard action against an army of ironically named Twitter trolls that stalk and mock all things Alberta, and we keep re-arming them.

 

Look, industry is changing. All of these inquiries and challenges are reactions to those changes. Those expecting a return to boom years are going to be disappointed. We can have a robust energy sector – we have to – because in Alberta and Western Canada we are blessed with the best combination of resource availability anywhere on the planet whether it be oil, gas, solar, wind, geothermal or hydro. But they need to all work together. Battling the insidious boogeymen of US and international ENGO’s just strikes me as fighting yesterday’s battle when we have so many other more pressing issues to deal with to get our industry and our entire province moving in a positive direction.

 

The oil and gas industry is populated by sophisticated and intelligent businessmen and women. They, and we, will be fine. We can handle the waves of negative press and protest. Always have. I have always said that what industry needs is a stable and predictable regulatory framework and a little bit of cheerleading – not a superhero rescue. Protest Federal government intrusion into provincial jurisdiction, strengthen ties with existing and potential customer regimes. And encourage/tell the energy sector to do a better job at self-promotion.

 

But don’t conduct a witch hunt against bearded hipsters, grandmothers and stewards of the land backed by funds and foundations that “just want to save the planet”. It’s a battle that is lost before it even starts and you’ve given them the forum they want – on our dime.

 

I know it was campaign promise. But some promises are best left on the shelf.

 

Sorry. It’s how I feel.

 

Prices as at September 13, 2019

  • Oil prices – Down,but really up
    • Storage posted a decrease week over week
    • Production was down
    • The rig count in the US was down and Canada was down
    • Prices rallied early on positive economic news. Gave back some ground on Bolton ouster.
    • Natural gas storage was up and remains higher than this point last year
  • WTI Crude: $54.87 ($56.59)
  • Western Canada Select: $41.72 ($44.69)
  • AECO Spot : $0.8960 ($0.895)
  • NYMEX Gas: $2.618 ($2.487)
  • US/Canadian Dollar: $0.7570 ($0.7557)

 

Highlights

  • As at September 6, 2019, US crude oil supplies were at 416.1 million barrels, a decrease of 6.9 million barrels from the previous week and 19.9 million barrels above last year.
    • The number of days oil supply in storage is 23.8 compared to 22.3 last year at this time.
    • Production was flat for the week at 12.400 million barrels per day. Production last year at the same time was 10.900 million barrels per day.
    • Imports fell to 6.725 million barrels from 6.904 million barrels per day compared to 7.591 million barrels per day last year.
    • Exports from the US rose to 3.295 million barrels per day from 3.061 million barrels per day last week compared to 1.828 million barrels per day a year ago
    • Canadian exports to the US were 3.404 million barrels a day
    • Refinery inputs fell during the during the week to 17.495 million barrels per day
  • As at September 6, 2019, US natural gas in storage was 3.019 billion cubic feet (Bcf), which is about 2% lower than the 5-year average and about 15% higher than last year’s level, following an implied net injection of 78 Bcf during the report week
    • Overall U.S. natural gas consumption rose by 2% during the report week.
    • Production for the week was flat week over week. Imports from Canada were up 7% from the week before. Exports to Mexico were down 2% for the week
    • LNG exports totaled 37 Bcf
  • As of September 13, 2019, the Canadian rig count was down 13 at 134 (AB – 86; BC – 10; SK – 35; MB – 3; Other – 0). Rig count for the same period last year was 226.
  • US Onshore Oil rig count at September 6, 2019 is at 733, down 5 from the week prior.
    • Peak rig count was October 10, 2014 at 1,609
  • Natural gas rigs drilling in the United States was down 7 at 153.
    • Peak rig count before the downturn was November 11, 2014 at 356 (note the actual peak gas rig count was 1,606 on August 29, 2008)
  • Offshore rig count was down 1 at 25.
    • Offshore peak rig count at January 1, 2015 was 55

US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 67%/33%

 

Trump Watch: More Alabama. Bye bye Bolton. Melania has a son..

Kenney Watch (new!): Many reviews and inquisitions as detailed above.

Trudeau Watch (for balance): It’s election time. Skip a debate, SNC won’t go away. Just another day at the office.

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