Energy
Navigating New Political Currents: How the U.S. Election Could Impact Canadian Energy – Resource Works
From EnergyNow.ca
By Resource Works
More News and Views From Resource Works Here
As Stewart Muir, CEO of Resource Works, attends the annual Pacific North West Economic Region (PNWER) conference in Whistler this week, the unexpected news that President Joe Biden won’t be on the November 5 presidential ballot sent shockwaves through the policy and trade discussions.
For policy wonks like those I’m gathered with in Whistler this week, could there be a better gift than the conundrums unleashed over the past week onto the U.S. political landscape?
The rise of Donald Trump and the potential presidential candidacy of Kamala Harris conjure up a staggering range of possibilities. When it comes to trade, international relations, and the future of the foundational natural resource sectors that unify the ten sub-national jurisdictions making up PNWER, this is what everyone is going to be talking about..
With Trump securing the Republican nomination last week, Canadian energy producers were left pondering what his potential return to the White House might mean for their industry. Like a wildcatter drilling an exploratory well, Trump’s energy policies promise both gushers of opportunity and dry holes of risk for our oil and gas sector.
On the upside, his pledge to unleash American energy production could boost overall demand and prices, indirectly benefiting Canadian exporters. His promised regulatory reforms may also grease the wheels for new pipelines and LNG terminals, easing the flow of our energy products southward. It’s enough to make an Albertan oilman shed a tear of joy into his Stampede pancakes.
But before we break out the champagne (or perhaps a nice Canadian ice wine), consider the potential downsides. Trump’s “America First” trade policies and tariff threats loom like storm clouds on the horizon for Canadian exporters. His vow to gut environmental regulations faster than you can say “EPA” could leave Canadian producers at a competitive disadvantage, burdened by our quaint commitment to responsible production practices.
Yet in this potential regulatory race to the bottom, I spy an opportunity as golden as the fields of Saskatchewan canola. By doubling down on our world-class environmental and safety standards, Canadian energy could position itself as the responsible choice in global markets.
Picture it: “Canadian crude – now with 50% less guilt!” We could be the Tesla of fossil fuels, if you will.
Of course, there’s a risk in tooting our own sustainability horn too loudly. Trump isn’t known for his fondness of perceived criticism, and antagonizing him could lead to retaliatory tariffs faster than you can say “covfefe.” We’ll need to navigate this terrain as carefully as a pipeline through the Rockies.
On the other hand, if Kamala Harris, Biden’s preferred successor, retakes the White House, the landscape will look markedly different. Harris is likely to continue the Biden administration’s focus on climate action and clean energy. This could mean stronger support for renewables, potentially benefiting Canadian sectors involved in green technology and clean energy exports. However, stricter environmental regulations and a push for rapid decarbonization might challenge traditional oil and gas industries.
A Harris administration might prioritize cross-border collaboration on climate initiatives, providing opportunities for joint projects in carbon capture and storage (CCS), hydrogen development, and renewable energy. This could foster closer ties and create a more integrated North American energy market focused on sustainability.
Bloomberg reports that while Harris wouldn’t be likely to make major shifts to the direction Biden charted on climate change, her opposition to offshore drilling and fracking suggests her signature move as president could be bringing fierce oil industry antagonism to the White House. As California attorney general, she brought lawsuits against energy companies, prosecuted a pipeline company over an oil leak and investigated Exxon Mobil Corp. for misleading the public about climate change.
Yet, such a focus on environmental standards could also mean increased scrutiny and regulatory hurdles for Canadian energy projects seeking to enter the U.S. market. Canadian producers will need to balance compliance with high environmental standards while remaining competitive.
In either scenario, navigating the U.S. political landscape will require strategic adaptability from Canadian energy producers. Trump’s potential return could mean deregulation and a push for fossil fuel dominance, while a Harris presidency could emphasize clean energy and environmental collaboration.
And for anyone lamenting the potential Trump threat to renewables growth, remember the number one test for The Donald: “Can I make money off it?” From Texas to Alberta, solar is a huge growth opportunity in the “and more” rather than the “and/or” category of energy opportunities that are creating investor profits. There’s no reason for him to fire opportunities like those.
Speaking of careful navigation, let’s ponder the electric vehicle conundrum. If Trump follows through on scrapping EV mandates, Canada may find itself stuck between a Chevy Bolt and a hard place. Do we follow suit and risk our climate goals, or forge ahead solo and risk becoming an automotive island? It’s enough to make one long for the simpler days of the horse and buggy.
But fear not, dear reader. For in the potential pairing of a Trump presidency and a Pierre Poilievre prime ministership, I see a silver lining as shiny as a freshly polished oil rig. Their aligned views on energy could usher in a new era of continental cooperation, turning the 49th parallel into a veritable pipeline of mutual prosperity. If current trends of market-driven decarbonization continue, this would actually be positive for the climate (and yes, I can already hear the chorus of those saying such a thing is impossible).
In the end, navigating the Trump energy landscape will require all the nimbleness of a Fort McMurray worker on an icy road. But with a dash of ingenuity, a sprinkle of diplomacy, and perhaps a generous helping of maple syrup to sweeten the deal, Canadian energy producers may yet find themselves not just surviving, but thriving in the turbulent waters of a potential Trump 2.0 era.
Business
Premiers fight to lower gas taxes as Trudeau hikes pump costs
From the Canadian Taxpayers Federation
By Jay Goldberg
Thirty-nine hundred dollars – that’s how much the typical two-car Ontario family is spending on gas taxes at the pump this year.
You read that right. That’s not the overall fuel bill. That’s just taxes.
Prime Minister Justin Trudeau keeps increasing your gas bill, while Premier Doug Ford is lowering it.
Ford’s latest gas tax cut extension is music to taxpayers’ ears. Ford’s 6.4 cent per litre gas tax cut, temporarily introduced in July 2022, is here to stay until at least next June.
Because of the cut, a two-car family has saved more than $1,000 so far. And that’s welcome news for Ontario taxpayers, because Trudeau is planning yet another carbon tax hike next April.
Trudeau has raised the overall tax burden at the pumps every April for the past five years. Next spring, he plans to raise gas taxes by another three cents per litre, bringing the overall gas tax burden for Ontarians to almost 60 cents per litre.
While Trudeau keeps hiking costs for taxpayers at the pumps, premiers of all stripes have been stepping up to the plate to blunt the impact of his punitive carbon tax.
Obviously, Ford has stepped up to the plate and has lowered gas taxes. But he’s not alone.
In Manitoba, NDP Premier Wab Kinew fully suspended the province’s 14 cent per litre gas tax for a year. And in Newfoundland, Liberal Premier Andrew Furey cut the gas tax by 8.05 cents per litre for nearly two-and-a-half years.
It’s a tale of two approaches: the Trudeau government keeps making life more expensive at the pumps, while premiers of all stripes are fighting to get costs down.
Families still have to get to work, get the kids to school and make it to hockey practice. And they can’t afford increasingly high gas taxes. Common sense premiers seem to get it, while Ottawa has its head in the clouds.
When Ford announced his gas tax cut extension, he took aim at the Liberal carbon tax mandated by the Trudeau government in Ottawa.
Ford noted the carbon tax is set to rise to 20.9 cents per litre next April, “bumping up the cost of everything once again and it’s absolutely ridiculous.”
“Our government will always fight against it,” Ford said.
But there’s some good news for taxpayers: reprieve may be on the horizon.
Federal Conservative leader Pierre Poilievre’s promises to axe the carbon tax as soon as he takes office.
With a federal election scheduled for next fall, the federal carbon tax’s days may very well be numbered.
Scrapping the carbon tax would make a huge difference in the lives of everyday Canadians.
Right now, the carbon tax costs 17.6 cents per litre. For a family filling up two cars once a week, that’s nearly $24 a week in carbon taxes at the pump.
Scrapping the carbon tax could save families more than $1,200 a year at the pumps. Plus, there would be savings on the cost of home heating, food, and virtually everything else.
While the Trudeau government likes to argue that the carbon tax rebates make up for all these additional costs, the Parliamentary Budget Officer says it’s not so.
The PBO has shown that the typical Ontario family will lose nearly $400 this year due to the carbon tax, even after the rebates.
That’s why premiers like Ford, Kinew and Furey have stepped up to the plate.
Canadians pay far too much at the pumps in taxes. While Trudeau hikes the carbon tax year after year, provincial leaders like Ford are keeping costs down and delivering meaningful relief for struggling families.
Economy
Gas prices plummet in BC thanks to TMX pipeline expansion
From Resource Works
By more than doubling capacity and cutting down the costs, the benefits of the TMX expansion are keeping more money in consumer pockets.
Just months after the Trans Mountain Expansion (TMX) project was completed last year, Canadians, especially British Columbians, are experiencing the benefits promised by this once-maligned but invaluable piece of infrastructure. As prices fall when people gas up their cars, the effects are evident for all to see.
This drop in gasoline prices is a welcome new reality for consumers across B.C. and a long-overdue relief given the painful inflation of the past few years.
TMX has helped broaden Canadian oil’s access to world markets like never before, improve supply chains, and boost regional fuel supplies—all of which are helping keep money in the pockets of the middle class.
When TMX was approaching the finish line after the new year, it was praised for promising to ease long-standing capacity issues and help eliminate less efficient, pricier methods of shipping oil. By mid-May, TMX was completed and in full swing, with early data suggesting that gas prices in Vancouver were slackening compared to other cities in Canada.
Kent Fellows, an assistant professor of Economics and the Director of Graduate Programs for the School of Public Policy at the University of Calgary, noted that wholesale prices in Vancouver fell by roughly 28 cents per litre compared to the typically lower prices in Edmonton, thanks to the expanded capacity of TMX. Consequently, the actual price at the gas pump in the Lower Mainland fell too, providing relief to a part of Canada that traditionally suffers from high fuel costs.
In large part due to limited pipeline capacity, Vancouver’s gas prices have been higher than the rest of the country. From at least 2008 to this year, TMX’s capacity was unable to accommodate demand, leading to the generational issue of “apportionment,” which meant rationing pipeline space to manage excess demand.
Under the apportionment regime, customers received less fuel than they requested, which increased costs. With the expansion of TMX now complete, the pipeline’s capacity has more than doubled from 350,000 barrels per day to 890,000, effectively neutralizing the apportionment problem for now.
Since May, TMX has operated at 80 percent capacity, with no apportionment affecting customers or consumers.
Before the TMX expansion was completed, a litre of gas in Vancouver cost 45 cents more than a litre in Edmonton. By August, it was just 17 cents—a remarkable drop that underscores why it’s crucial to expand B.C.’s capacity to move energy sources like oil without the need for costly alternatives, allowing consumers to enjoy savings at the pump.
More than doubling TMX’s capacity has rapidly reshaped B.C.’s energy landscape. Despite tensions in the Middle East, per-litre gas prices in Vancouver have fallen from about $2.30 per litre to $1.54 this month. Even when there was a slight disruption in October, the price only rose to about $1.80, far below its earlier peaks.
As Kent Fellows noted, the only real change during this entire timeline has been the completion of the TMX expansion, and the benefits extend far beyond the province’s shores.
With TMX moving over 500,000 barrels more per day than it did previously, Canadian oil is now far more plentiful on the international market. Tankers routinely depart Burrard Inlet loaded with oil bound for destinations in South Korea and Japan.
In this uncertain world, where oil markets remain volatile, TMX serves as a stabilizing force for both Canada and the world. People in B.C. can rest easier with TMX acting as a barrier against sharp shifts in supply and demand.
For critics who argue that the $31 billion invested in the project is short-sighted, the benefits for everyday people are becoming increasingly evident in a province where families have endured high gas prices for years.
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