Beware of Trojans bearing gifts..That sums up Alberta Energy Minister Brian Jean’s response to federal environment minister Steven Guilbeault’s statements on phasing out energy “subsidies” for oil and gas Monday..Jean said he was “concerned” Guilbeault’s rhetoric didn’t match what both sides described as “positive and constructive” meetings to reconcile Ottawa’s climate agenda with Alberta’s own emissions reduction strategy, specifically with respect to oil and gas.. Guilbeault .“Minister Steven Guilbeault continues to send mixed messages to Albertans, to the energy industry, and to our business community,” Jean said in an emailed statement. .“The minister’s narrative does not match the constructive conversations we have had with his cabinet colleagues on how to work together to support emissions reductions and carbon abating technology.”.Instead, Guilbeault advanced a definition of “inefficient fossil fuel subsidies” so broad it would include federal COVID payments to oil and gas workers during the pandemic... along with capital cost allowances and federal loan guarantees to complete the Trans Mountain pipeline, which the federal government owns outright..Ironically, Guilbeault was actually heckled by environmental activists during his remarks on national television for not going far enough. “You should be happy with this announcement,” he said to them. “This is what you wanted.”.The fact is, the oil and gas industry hasn’t had any direct “subsidies” from the federal government since the days of Pierre Trudeau and Jean Chretien. The last major oil and gas project to receive any direct tax dollars — apart from the aforementioned Trans Mountain expansion — was the Hibernia oil platform offshore Newfoundland..Little wonder the country’s largest oil advocacy group, the Canadian Association of Petroleum Producers, issued a statement that it was “aligned” with the government position on “subsidies.” That’s because it has always maintained there are none..In fact, Guilbeault was hard pressed to put a dollar figure or specify exactly what these “unabated fossil fuel subsidies” even are..Mind you, the Liberal government has been unable to determine how much it’s going to cost to convince Volkswagen and Stellantis to build EV factories in Ontario..The headline number is $19 billion but the Parliamentary Budget Office is saying it’s more like $31 billion — more than the value of the entire Canadian automobile industry — and about a third of the oil industry which is about 10% of the country’s entire GDP..Instead, his department is “reviewing” 129 specific projects — a paltry number — to see if they qualify under the new rules. .But even more concerning, from an Alberta standpoint, were his comments on carbon capture utilization and storage (CCUS) which is essential if the oil industry is to ever have a hope of meeting his own pie-in-the-sky emissions targets. .Starting in 2021 the federal government introduced tax credits of up to 50% and 37.5% for investment in facilities and equipment for transportation, storage and use — with the caveat that the CO2 isn’t used for enhanced recovery to produce more oil..Existing tax credits for CCUS won’t be touched, but Guilbeault poured a gallon of cold water on the role of carbon capture in future oil and gas development while holding out the possibility — if not hope — that they’ll eventually be revoked after 2030..“We’re not putting a lot of eggs in that basket,” he told reporters. “This is not a silver bullet… it’s not going to play a major role in Canada’s emissions reduction strategy.”.That’s definitely NOT what he said behind closed doors in Calgary last week. On that point, Jean was even more alarmed..“I was concerned to hear Minister Guibeault’s comments downplaying the important role carbon, capture, utilization, and storage will play in our energy sector and in decarbonization moving forward,” he said..That’s notwithstanding the fact that Guilbeault refused to meet with representatives of the Pathways Alliance of the country’s — and the world’s — largest oil sands producers even has he refused to back down on an emissions cap that analysts say would necessitate a 1.3 million barrel per day production cut..It all adds up to a federal government that’s talking out of both sides of its mouth..“Minister Guilbeault’s consistent anti-oil and gas agenda was demonstrated last week with his refusal to meet with major oil and gas CEOs here in Alberta,” Jean said. .“Apart from the anti-investment messages what was presented today was a plan to review future tax code changes. As the federal government looks at changes to the tax code, they must ensure equal treatment of oil and gas investments under Canada’s tax code relative to similar investments made in other sectors, like automotive manufacturing.".At the end of the day the issue of subsidies is a nothing muffin..The real problem is the uncertain message it sends to investors — apart from Guilbeault’s Laurentian constituency — that Canada isn’t a place worth doing business..That’s a message Monsieur Guilbeault can take with him to the G20 in India this week, assuming he’s still environment minister. And by all accounts, he will be..Only in Canada? Pity..Due to a high level of spam content being posted in our comment section below, all comments undergo manual approval by a staff member during regular business hours (Monday - Friday). Your patience is appreciated.
