Page 6 - NorthAmOil Week 38 2021

NorthAmOil COMMENTARY NorthAmOil

Canadian election heightens

oil sector concerns

The re-election of the Liberal Party has deepened
the oil and gas sector’s uncertainty about the future

CANADA CANADA’S oil and gas industry is waiting to Liberals projected to win just 158 of the 170 seats
see whether newly re-elected Prime Minister they need for a majority.
Justin Trudeau will follow through on his pledge The shortfall means the Liberals will have
WHAT: to set strict emissions reduction targets for the to form a coalition and talks with former part-
The Liberals had pledged industry. ner New Democratic Party (NDP), which won
to clamp down on the Trudeau said on August 29, in the run-up 25 seats, are on the cards. NDP leader Jagmeet
oil and gas sector’s to the September 20 snap election, that his gov- Singh, however, has also pledged to crack down
emissions while removing ernment would require the country’s oil and gas on the energy sector. In the days leading up to the
fossil fuel subsidies. players to set five-year targets to cut their emis- election he promised that an NDP government
sions, with the aim of reaching net-zero GHG would identify and eliminate oil and gas subsi-
WHY: emissions by 2050. The programme would begin dies in favour of funding the renewable energy
Prime Minister Justin in 2025. sector.
Trudeau had been The Liberal Party has also said it will require Singh was highly critical of Trudeau before
seeking a parliamentary oil and gas companies to reduce methane emis- the election, claiming that the prime minister
majority, but his party fell sions by at least 75% below 2012 levels by 2030. has failed the country on many fronts. One such
short. Moreover, it wants to eliminate fossil-fuel subsi- claimed failure is that Trudeau’s administration
dies within two years and has flagged up an end has missed its emissions reduction targets, the
WHAT NEXT: to public financing for the sector. politician adding: “Our plan is to fight this cli-
The Liberals will have to Talk of stricter rules for the energy industry mate crisis like we really want to win it.”
negotiate with the NDP , comes at a time when oil and gas investors are Since the election Singh has stood by his crit-
which has criticised both already looking to exit the Canadian oil patch icism of Trudeau and has said he will demand
Trudeau and the energy after several challenging years. With divestments more from the Liberals if they wish to form a
sector. picking up as oil trades around the $70 per mark, coalition government with his party.
there is speculation that a jump to $90 per barrel Given the pre-election rhetoric, the two sides’
could see a flood of such transactions. shared stance on both oil and gas subsidies and
energy sector emissions suggests this may be one
Political pull of the easier areas for synergy.
Trudeau called the election after just two years The Canadian energy sector – the world’s
in power in the hope his party could secure a fourth-largest oil producer, with production hit-
majority. This is not to be, however, with the ting 252.2mn tonnes (5.06mn barrels per day)

P6 www. NEWSBASE .com Week 38 23•September•2021