Stubbs Says Liberals Pushing Away Energy Development

Stubbs Says Liberals Pushing Away Energy Development

Ottawa, ON – Shannon Stubbs, MP for Lakeland and Official Opposition Deputy Critic for Natural Resources, commented on last week’s announcement of the sale of Royal Dutch Shell’s oil sands holdings and half of Marathon Oil’s minority stake in the Athabasca Oil Sands Project in Northern Alberta.

Unfortunately, it’s just the latest in a list of other multinational companies who have either divested or frozen their investments in the oil sands recently,” said Stubbs. “This announcement follows on the heels of other departures like ExxonMobil, Statoil and ConocoPhillips. Regulator uncertainty, increased costs and anti-energy policies by both provincial and federal governments are driving away investment.”

Since the Liberals took office at the end of 2015, business investment in Canada has fallen every single quarter, and that’s been especially pronounced in the oil sands and energy sector, who have experienced almost unprecedented job losses this past year.

The Prime Minister is forcing a carbon tax on every person in every community in the country that is detrimental to Canadian oil and gas development. Neither the US nor any of the other top 6 oil and gas producing countries in the world are proposing or imposing a carbon tax on themselves because they know it will undermine their competitiveness. The oil sands are already capital intensive, long term projects, which is particularly challenging in the context of President Trump planning to develop their domestic energy, aggressively reduce corporate taxes, regulations and red tape significantly, which is already underway. This is an acute problem for Canada because the U.S. is both our biggest customer and biggest competitor.”

Hours following the announced sale, Prime Minister Trudeau received the Global Energy and Environmental Leadership Award at an international energy conference in Houston, Texas.

The award presented to the Prime Minister last night was given to him by the very executives and American vested interests who will benefit from developers moving their assets from Canada to the U.S. This is just like when the Centre for American Progress, which is a lobby group explicitly against Canadian energy and the Energy East Pipeline Project, praises and celebrates Prime Minister Trudeau and Minister McKenna for their environmental stewardship,” said Stubbs. “In reality, it is the Liberals’ continued uncertainty around regulatory changes, higher taxes, cost hikes and anti-energy sentiments like comments about phasing out oil sands development completely are causing investors to flee with their investments and jobs and commit it somewhere else.”

This past week, Shell’s CEO reaffirmed the company’s support for a carbon tax while speaking in Houston. This is the same tax that is reducing profit margins and forcing energy producers, like Shell, to shift operations where they can be more profitable.

Oil and gas producers in Canada are in a difficult position. Both levels of government can literally put them out of business. Multinationals can, and will, choose lower cost environments to invest and develop energy resources around the world, so they may appear to support government policy or praise government announcements, but the proof is in where they put their capital and they are speaking their truth loud and clear: taking investment away. What is deeply concerning is the multinationals seem to just be following the PM’s lead: he told the country and world he intends to phase out the oil sands.”

Canadian Natural Resources Limited plans to spend $12.74 billion in cash and shares on this deal. Shell has also agreed to sell its Peace River Thermal oil sands assets, including its shelved Carmon Creek project, and undeveloped oil sands leases to Canadian Natural.

Personally, I was happy to see the purchase done by an experienced, Canadian company like CNRL, which provides hundreds of reliable, good paying jobs for people in Lakeland and throughout North America. But, the trend towards fewer developers of this important, strategic asset that drives prosperity for all Alberta and Canada is troubling.”

The final sale is expected to close in mid-2017, subject to regulatory approvals.