ADVOCACY CORNER

WHAT A BIDEN VICTORY REALLY MEANS FOR CANADIAN OIL AND GAS

By Michelle Coates-Mather Vice-President, Government Relations and Public Affairs Syntax Strategic

Ding dong, Trump is gone, ring the Democratic victory bells. With the Trump administration officially, although reluctantly, authorizing Team Biden’s transition, there is some sense that cooler heads and the democratic process have prevailed.

It has been a tumultuous few week since election day – Canadians have been equally plugged into the theatrics. But the drama is far from over and the impacts on Canada yet to be seen.

While world leaders across the globe celebrate the victory that sees the bull in the china shop replaced by a true political statesman, the celebration might be short lived for those in the oil and gas sector looking to build entries into the U.S. market.

Biden has a reputation as a level-headed politician but like all politician’s ideology will drive his policy priorities. He like his Canadian socio-political cousin, Prime Minister Trudeau, was elected on a transition mandate with a promise to deliver a green economic plan.

On the campaign trail, much was made of Biden and his running mate, Vice-President elect Kamala Harris’ past commitments to bring a swift end to fracking in the U.S. While President elect Joe Biden clarified that the ban would apply only to new federal land, some Canadian energy observers have spoken about the new trade opportunities this presents for Canadian oil and gas.

With U.S. supply tightening, but consumers still demanding gas to fuel their commutes to work, the U.S. might just look

The Advocacy Corner will be featured in the newsletter on a bi-monthly basis. We will continue to monitor and track all policy related issues that matter to you, our members, in the lead up to and post the federal election.

to its northern neighbours to meet the need in the interim while Team Biden implements its energy transition strategy. But of course, to ensure smooth delivery of Canadian oil down south, pipelines must be built.

Keystone XL is the clearest path forward. Under Trump and pressure from Canadian oil and gas industries, Keystone XL was given renewed life in the last year. The Government of Alberta has taken a $1.5 billion equity stake in the project and Prime Minister Trudeau has committed to championing the project with a Biden administration.

But even the Prime Minister admits some uncertainty about the path forward under Biden.

TC Energy has awarded more than $1.6 billion USD in American contracts to build the line. While Biden has not been shy in his opposition to the pipeline, American skin is in the game now which makes this a prickly political situation for Biden. Cancelling the pipeline will result in cancelling north of 60,000 unionised American jobs but flip flopping on his commitment to climate activists could alienate a significant and vocal segment of his voting base.

We’ve seen this plot before – not just one year ago, Trudeau ended with a patchwork federation following a resounding shut out of oil rich provinces who believe they’re hard work has been villainized and discarded in favour of ideological policy that might very well turn the tide on climate change but ignores the everyday Canadians being left behind in the transition.

COVID-19 has changed the immediate priority policy landscape giving rise to protectionist sentiment and a buy domestic first attitude.

Protectionism, combined with Biden’s $ 2 trillion US Climate Plan – sure to be a key feature of his post-pandemic recovery strategy – make it hard to envision a long-term, let alone short-term path for a Canadian oil boon in the U.S.