Is Trudeau government working against oil and gas?
Posted Jun 14, 2019 8:09 am.
Last Updated Jun 14, 2019 11:52 am.
CALGARY (660 NEWS) – Investor confidence in Canada’s oil and gas sector is taking a major hit.
And the industry is blaming the Trudeau government for chasing billions of dollars out of the country.
The Canadian Association of Petroleum Producers (CAPP) and industry executives warn under the federal government’s Bill C-69 there will be no new pipelines built in Canada.
READ MORE: ‘We’re doing it to ourselves.’ Petroleum producers voices displeasure over Bill C-69
The Trudeau government has said it wants to develop resources responsibly but many believe the changes will make it impossible for new projects to go ahead.
That has energy companies looking outside Canada for opportunities.
According to CAPP’s 2019 crude oil forecast, capital investment in Canada is expected to be $39 billion this year, compared to $81 billion in 2014,
That big reduction in spending is reflected in the markets where Canadian oil and gas stocks are at a 52 week low.
CAPP President Tim McMillan releases 2019 Crude Oil Forecast at @petroleumshow this morning. You can read full report at https://t.co/Q4AfYyW2du #CAPP #crudeoilforecast pic.twitter.com/kJDqvbgI0Q
— CAPP Oil Gas Canada (@OilGasCanada) June 13, 2019
It means many energy companies are looking elsewhere, including firms like Japan Canada Oil Sands Ltd. (JCOS).
The Japanese-based company has invested $2 billion in projects near Fort McMurray and isn’t looking to expand its existing projects.
“When people call (Bill C-69) ‘no pipeline legislation,’ there is a long way (to go) for us to make another decision to invest more,” said JCOS President Satoshi Abe. “Our headquarters is in Japan, so we have options all over the world.”
The inability to reach global energy markets means Canada will continue to sell oil at a steep discount.
“The differential, especially for heavy oil, is quite challenging. Everything comes back to pipeline issues,” Abe said.
Respected economist Jack Mintz wrote a column this week saying, “there is only one country contemplating destroying its resource sector: Canada.”
WATCH: Alberta Ministers mad about Bill C-69
