There is an interesting parallel between what just happened in the US presidential election when compared to similar government, media, and environmental groups oil and gas industry insiders believe are plaguing the long term viability of the energy business here in Canada.
Which leads us to our theme for this issue of Oilfield PULSE: Conspiracy Theories!
Let’s cut to the chase. We wanted to know who’s really keen on killing the oil and gas industry in Canada. Beyond the obvious decrease in the price of oil and gas, we solicited our contributors and readers alike for their opinions on what external factors are negatively impacting and decimating several aspects of the Canadian oil and gas industry.
There are so many peripheral forces at play that affect the energy business in Canada. Everything from special interest groups, environmental activists, carbon tax advocates, middle eastern influence, landlocked oil, and that’s just to name a few. These coupled with conspiracy theories involving potential payoffs, hidden agendas, under the table deals, online virtue signaling, media propaganda, and, of course, the all too recent pipeline approval ‘social license’ favourite. We thought it would be both entertaining and informative to present some of the ‘conspiracy theories’ beleaguering the industry today and into the future. Is there more to this downturn then just the low price of oil and gas? What mitigating factors and external
influencers are causing our industry to suffer? The truth is out there in the articles and stories in this edition of the PULSE!
From my own perspective, it all boils down to one thing. For investors, it’s just too damn hard to do business in Canada!
We regularly interact with producers of all sizes, who, as you would anticipate, are attempting to raise new capital whichever way they can get their hands on it. In days gone by, deals that would normally take 90 days to source and fund are now taking well over a year to close or are not closing at all. One of the major factors and concusses amongst the investors is the total lack of certainty they have in the Canadian economy and government policies, primarily as a result of the green and social license direction our federal and several of our provincial governments are ideologically and fervently committed to adopting. We haven’t met a domestic or foreign investor, in all of our travels, who has included any due diligence, weighting, or any notional consideration on how clean our economies are in Canada before making their investment decisions. Instead, they are taking their investment dollars offshore where successful projects can be measured from conception, to approval, to shovel, and, finally, to completion in two to three years versus in decades. And, now these investors are also looking at our largest trading partner, the United States, under a Donald Trump Presidency in a much more favourable light than the social license quagmire known as Canada.
Excessive Regulations ……. it’s just too hard
Environmental Impact Studies ……. it’s just too hard
Eco-Activists ……. it’s just too hard
Special Interest Groups ……. it’s just too hard
Environmentalists ……. it’s just too hard
Aboriginal Buy-in ……. it’s just too hard
NEB Hearings and Approvals ……. it’s just too hard
Pipeline Approvals ……. it’s just too hard
Cap and Trade ……. it’s just too hard
Carbon Taxes ……. it’s just too hard
Royalty Structures ……. it’s just too hard
Corporate Income Taxes ……. it’s just too hard
Clean Economy ……. it’s just too hard
Greenhouse Gas Emissions ……. it’s just too hard
Global Warming ……. it’s just too hard
Social License ……. it’s just too hard
Sustainable Energy ……. it’s just too hard
Renewable Energy……. it’s just too hard
Political Party Ideologies ……. it’s just too hard
Federal and Provincial Government Policies ……. it’s just too hard
It seems our new oil and gas capital expenditure currency in Canada is now being impacted much more by protecting and saving political capital than attracting investment capital. We have to make it easier for energy and manufacturing businesses to succeed in Canada. When these industries succeed, Canada succeeds! Jobs are created and investment capital will flow once again.
Provided the Good Trump vs. Bad Trump businessman shows up for work in January, that is exactly what he intends to do in the United States. If we don’t follow suit, first it was Brexit, and then it was Trumexit! I wonder how far behind is Wynexit, Notexit, and Trudexit will be!