'Stop kicking us while we're down': Alberta premier has harsh words for politicians who say oil industry is dead
Published Thursday, May 7, 2020 12:06PM MDT Last Updated Friday, May 8, 2020 7:01AM MDT
OTTAWA -- Alberta Premier Jason Kenney took direct aim Thursday at federal politicians who say the oil industry in Canada is dead and focus should shift to renewables in the future.
"Please stop kicking us while we're down. We Albertans have been generous and we will continue to be generous, but these attacks on our natural resource industries are unwarranted, they are divisive, they are, I believe in a way, un-Canadian at a time like this," he said during an update on the province's response to COVID-19.
"It's like blaming the victim."
Kenney spoke a day after Green parliamentary leader Elizabeth May and Bloc Quebecois Leader Yves-Francois Blanchet both said post-COVID-19 economic investments should focus not on the oilsands of the past, but renewables of the future.
"Oil is dead," May declared Wednesday in a news conference on Parliament Hill.
Kenney was also upset by comments from Blanchet.
"Mr. Blanchet said Albertans have been sending, 'a string of insults to Quebec.' Nothing could be further from the truth," he said, adding Quebec receives about $13 billion annually through federal equalization payments.
"So we don't send a string of insults to Quebecers, we send billions of dollars, we send solidarity, we send friendship, we send our sense of shared values and shared interest. We also send energy that fuels the Quebec economy, and most recently we also sent millions of masks and gloves and even 25 ventilators to help our fellow Canadians get through (the COVID-19 pandemic)."
Kenney then repeated the comments in French.
Prime Minister Justin Trudeau also weighed in earlier Thursday, as political pressure mounted on the government not to provide any further bailouts to the struggling sector.
"I don't share that assessment," he said in his daily briefing to Canadians.
Rather, said the prime minister, recovering Canada's economy in a way that ensures climate change goals are respected will require a healthy oil sector to develop and implement the innovations that will cut greenhouse gas emissions from their products.
"I know that if we are to move forward in transforming our economy towards lower emissions and cleaner processes, workers and innovators in Alberta and across the energy sector are going to be an essential part of that transformation," he said.
Trudeau's words were very welcome in the suffering oil patch, said Goldy Hyder, president of the Business Council of Canada.
"What is important was to hear the prime minister rather generously in his remarks acknowledge the sector is an essential part of this transformation," said Hyder.
He said the argument that oil is dead is simply "immature" rhetoric without any dose of reality.
Hyder said the industry needs to figure out what it needs to do to help the government reach its climate change goals. But he said that capacity to innovate is not going to be there if the oil sector crumbles under the weight of COVID-19. He urged the government to bring in more credit for the industry.
"Don't suffocate the very capital that leads to the very innovation that addresses climate change," said Hyder.
Canada's oil industry was hit in March by a double whammy -- the plummeting demand for oil as billions of people around the world stayed home to avoid COVID-19, and an oil price war between Saudi Arabia and Russia which saw the two continue to pump out more and more oil. The combination of the two pushed world oil prices to record lows in some places, including in Canada, where many producers already get less per barrel than others because it takes more effort to ship and refine some products from the oilsands.
As a result, Canadian oil producers are slashing capital spending, laying off workers, and cutting production by tens of thousands of barrels a day. Major public companies are reporting multibillion-dollar losses for the first quarter. Ottawa announced a package of more than $2.7 billion in mid-April to properly remediate orphaned oil wells in Alberta and help companies curb their methane emissions. Loans of up to $60 million were made available to mid-sized producers from the Export Development Bank and Business Development Bank of Canada.
But the industry wants more, with big producers wondering if they'll get any help and some small producers uncertain they will be able to outlast the downturn intact. Many environment activists and some of Canada's political parties say it's time for Ottawa to turn off the cash tap and allow the industry to die out, in favour of greener, more renewable energies.
Kenney has asked for as much as $20 billion as a bailout package.
Grant Bishop, associate director of research at the C.D. Howe Institute with a speciality in energy, said demand for oil will eventually peak but despite this current slowdown, that peak is not going to mean everyone stops using oil. Even as gasoline-powered vehicles are slowly replaced by battery-operated ones, oil will be used in many products from plastics to pharmaceuticals.
The right investments can take the Canadian product above and beyond as the greenest and cleanest produced in the world, which will make it more desirable.
Bishop said with oil prices not projected to go above $22 a barrel even over the next four years, some Canadian producers are not viable. He said there will need to be some consolidation in the industry, and some effort to make companies viable, and any aid from Ottawa must only go to companies who can show a path to profit.
Blanchet appeared to temper his comments on the industry somewhat, allowing that the government should help the industry return to pre-COVID-19 levels. But he said future investments should focus on renewables, and transitioning Alberta off oil into greener pastures.
May, on the other hand, underscored her comments in a piece published in Policy Magazine online Thursday afternoon. As the world recovers from COVID-19, the world is not going to be looking to Canadian oil as a place to invest, she said. She said Canadian bitumen is one of the most carbon-intensive products around, and investors were already pulling away from the oilsands long before COVID-19 began to wreak its global havoc.
She said Canada would be better to take the money it has to invest and become a world leader in renewable energy.
This report by The Canadian Press was first published May 7, 2020.
With files from CTV News Calgary's Dave Dormer