In a Friday blog post, it was noted that Alberta premier Jason Kenney and the Canadian Association of Petroleum Producers had petitioned the federal Liberal government for direct financial support for struggling oil producers and relaxed environmental regulations.
Later that day, Ottawa responded with $1.7 billion in funding to help the industry clean-up orphan wells with about $400 million expected to go to Saskatchewan. An additional $750 million was allocated to reduce methane emissions from fossil fuel production.
In an ideal world, those programs would be the responsibility of the industry that garnered billions (and even trillions) in profits from fossil fuel resources. But that’s not the way big business operates these days.
So while the federal initiatives do serve as an industry subsidy, the money will achieve two worthwhile goals — provide much-needed work for unemployed oil workers, and an environmental benefit by reducing fugitive GHG emissions. So it was generally supported by people concerned about climate change.
While Kenney welcomed the announcement, he described it as a “first step” and that he expected more to be done to keep the industry afloat. The premier could be expected to say that, as since the UCP government was elected in April 2019 it’s poured billions of dollars into the oil sands through tax cuts, royalty reductions and even direct investment of public money.
At the same time, the UCP has been criticized for cutting support for green energy and digital technology — two industries that offer hope of providing sustainable employment in the 21st century.
Unfortunately, whatever “pipe dreams” Kenney and his oilpatch backers might have about reviving the oil sands, the financial metrics for the industry (which require prices in the $60 a barrel range or more) simply don’t make sense.
And with our current economic model in tatters, the argument is being made that rather than try to return to a world that no longer exists, we should gird our loins and take the steps necessary to build a sustainable economy (and future) for ourselves.
So stay tuned.