The CEOs of oil companies Cenovus (CVE.T), MEG Energy (MEG.T), and Canadian National Resources (CNQ.T) are at their wits’ end.
Everything they have done to get the oil flowing through pipelines to the sea over the past 10 years, whether it be via Keystone XL, Enbridge, TransMountain, or any of the other pipelines they’ve worked on, has been met with fierce opposition from citizens and First Nations groups.
Now they’ve taken the desperate step of appealing directly to the public through an open letter and full-page ads in national papers to try to change the official narrative about oil.
“I’ve been in this business for a long time. I’ve dealt with NDP governments, Liberal governments and Conservative governments. It’s not the governments that need to change, it’s the message the people of the country send to those governments. I’m fine with having Justin Trudeau as prime minister if he embraces a philosophy with respect to energy that says that Canada has a much larger role to play on the global stage and we need to encourage that part of our sector.”
—MEG Energy CEO Derek Evans
He’s not wrong about one thing: Justin Trudeau has been inconsistent in his advocacy.
His pan-Canadian climate change strategy required all provinces to have a minimum level of carbon pricing, and failure to do so meant that the government would impose its own carbon tax, but that’s directly offset by Trudeau’s acceptance and nationalization of a pipeline. It’s almost like setting up the provinces to fail, so they could be taxed more. But maybe that’s tinfoil hat territory.
It definitely does point to the confluence of competing influences tugging at Trudeau’s government—one way towards environmentalism and the other towards resource extraction—and one wonders whether or not Trudeau has any say at all in what he does.
Maybe he doesn’t. So maybe this is the right direction for Cenovus, MEG Energy and Canadian National Resources to go in. That way, maybe they can ease the tug of environmentalists screaming to keep the oil in the ground.
That’s going to be a tough task. Maybe even impossible.
Let’s have a look at the open letter:
The world also needs to significantly reduce greenhouse gas emissions. But shutting down Canada’s oil industry will have little impact on global targets. In fact, it could have the opposite effect, with higher carbon fuels replacing our lower emissions products.
The idea that we could somehow increase global greenhouse emissions by shutting down Canada’s oil industry is absurd.
But the most curious statement of all here is: what is this supercrude that’s somehow worse than tar sands bitumen? Especially when fuel taken from tar sands oil produces more greenhouse gas than conventional forms of gasoline and heating oil.
We’ve reduced the emissions intensity in the oil sands by about 30% over the past two decades, and a number of oil sands operations are producing oil with a smaller greenhouse gas impact than the global average.
Since we can’t trust oil companies to accurately and adequately report their emissions, it raises the question: based on what reporting?
And Canada’s energy companies are the country’s single largest investors in clean tech. Through organizations such as Canada’s Oil Sands Innovation Alliance (COSIA), Petroleum Technology Alliance Canada (PTAC) and the Clean Resource Innovation Network (CRIN) we are continuing to work on – and share – breakthrough technologies.
In their defense, this seems to be true. Good for them. At least something in here isn’t spun out of whole cloth.
The choices we make will determine the quality of life we create for ourselves and future generations.
It’s hard to disagree with this benign statement, but hidden within lurks a glimpse at a different political reality.
It’s said by Trudeau, but it could have been said by anyone. Leaving it in the ground is economically wasteful, shortchanges Canadians and damages the economy. What activists need to know is that the oil is coming out of the ground eventually.
It’s a matter of time, patience and political will, and Trudeau won’t always be around.
Whoever replaces Trudeau may not be so conflicted about the environment.
But for right now, if the oil CEOs want to make any inroads with the Canadian public, they’re going to have to hire better spin doctors.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
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