Alberta Politics

Not even Trudeau can save Kenney this time

Make sure to do, and be successful at, something related to work on the first day of the year ~ New Year’s superstition

Alberta Premier Jason Kenney didn’t have the most successful start to 2021. Forced to hold a press conference to address the number (six) of caucus and staff members who sought sun and relief from the dark, pandemic-laden province over the Christmas holidays, the premier reminded Albertans that his jet-setting staff and caucus hadn’t broken any laws to do so.

But when the outrage came from within his own party, he was unable to dismiss it as “outrage du jour” from the “over-caffeinated lefties” (read: anyone who isn’t clapping for Kenney). Three days later, Kenney posted an update – on Facebook of all places – that he had accepted resignations from his Cabinet Minister Tracy Allard and Parliamentary Secretary Jeremy Nixon, removed the rest from committees, and asked his chief of staff to step down.

Within the next two weeks, the resignation of Pat Rehn, the Lesser Slave Lake MLA who spent his holidays in Mexico, was requested by the Slave Lake Town Council. Rehn’s publicly disclosed expenses came under fire within the same time frame prompting Kenney to remove him from caucus. For the expenses – not the alleged lack of representation.

On January 20th, after President Joe Biden was sworn in, he promptly cancelled the permits for Keystone XL, leaving Albertans on the hook for a $1.5 billion bad bet by Premier Kenney – who immediately demanded the Prime Minister start a trade war with the United States of America. The PM addressed his disappointment in the decision but opted not to start a trade war with the single largest consumer of Canadian goods and services – shockingly enough.

Back in March 2020, when Kenney first announced his decision – already signed and sealed with TC Energy – to spend money Alberta didn’t have on a make-work project that private industry wouldn’t bankroll during an election year, the red flags were already numerous; and not because of the Premier’s reliance on conspiracy theories.

No, the red flags on the business case for Keystone XL were coming from – wait for it – the market.

The U.S. administration was seen, in 2016, to be an ally to Canadian oil producers and to Keystone, but that was before the U.S. needed to curtail production in the country – which is where they find themselves today.

Bankruptcies (in the oil and gas industry) in both the U.S. and Canada increased by more than 50 per cent in 2019. If unabated production continues it is likely to spur even more insolvencies.

There is no reason for America to support the expansion of Canada’s pipeline access beyond Line 3 at this time and the latest revocation of TC Energy’s construction permit could delay construction for another year or more.

“This is our last chance,” Kenney said.

No, it wasn’t “our” last chance – it was Kenney’s last chance to provide the jobs, economy, and pipelines he promised.

UCP first anniversary: Alberta’s oil and gas future bleaker than ever – PRnD April 16, 2020

There may have been a time, let’s say 2003, when there was a concerted effort by environmental conservationists to draw negative attention to Alberta’s oil and gas industry and, yes, shut down the oil sands.

The campaign, was, and continues to be, unsuccessful because of a well-known market force called “demand”.

The 2014 slide in global oil prices just happened to coincide with a one-year lag in oil sands development. There were projects under construction that would move into production as soon as they were completed. In 2014, based on the best available information, they shelved new projects. Oil companies pushed through 2015, keeping a lot of Albertans employed.

However, when they were completed, thousands of oil and gas construction jobs were gone because there were no new projects to move on to. The timing was perfect for conservatives. Thousands of jobs lost under an NDP government – the campaign literature basically wrote itself.

And campaign they did. The fiasco with Energy Relaunch” in 2018 where energy companies were invited to hear the UCP’s plans if they were elected, and not much about what was going to help the energy industry, was something to behold. You see, they knew global forces didn’t give a damn who was leading the provincial government – but that didn’t matter to Albertans.

It didn’t matter that, even after Kenney was elected, oil companies were shifting their priorities under a new reality.

It should have, though.

Ryan Jespersen had a conversation about pipeline projects with former Husky CEO Art Price on Real Talk February 3.

Well, I would say pipelines today, in this market, speculating on growing production of oil, they make no sense – that’s a speculation that makes no sense. You think the Gulf Coast refineries in the United States, if they were actually short of oil, and had to actually short the United States market, and the demand was there, you don’t think the United States of America would organize to solve that problem?

Stop trying to focus the Alberta economy on growing production. Drop it – the industry has. It’s not growing oil production as an industry because the risk-reward in that market makes no sense today.

Art Price, Real Talk with Ryan Jespersen – February 3, 2020

A mere day later, Imperial Oil CEO Brad Corson, during an investor call on February 4, said that while the KXL cancellation was a setback, it didn’t remove all options available.

“Fortunately for us, we do see enough other options that we don’t feel like this will cause us any constraints, but nonetheless we prefer to maximize flexibility,” Corson said, according to the Globe and Mail.

Ergo, the oil companies don’t have an insurmountable problem – Kenney does.

Kenney put Alberta’s money into one basket.

Kenney took shares in Keystone XLnot TC Energy – on Alberta’s behalf.

Jason Kenney made a bad decision and expects the federal government to bail him out.

Barring that, Kenney’s plan appears to have the political depth of a finger bowl, believing that simply by pointing his finger at Trudeau for not starting a trade war with our largest consumer, he will be magically relieved of any responsibility for his actions.

Albertans have certainly accepted that excuse from Kenney before, so one could be forgiven for thinking that well is nowhere near dry.

Things have changed

Alberta, like everywhere else, has been gripped by forces outside of their control. Global oil prices, a pandemic, a new American administration, and a changing energy landscape that actually managed to move faster while the world suddenly ceased to look like the one we were used to.

But don’t worry, oil and gas will manage. They have a plan to transition to a low carbon future.

Alberta’s government, apparently, does not – and it’s a big deal.

With KXL looking like it will simply be paid for by money that previously went somewhere useful, and Kenney selling off coal leases to the lowest foreign interest, Albertans are getting a very unflattering look at a Premier who seems to be moving in exactly the wrong direction for Alberta to be part of a new economy.

Still.

This post contains opinion.

Deirdre Mitchell-MacLean is a political commentator physically distancing in Southern Alberta. 
Connect: @Mitchell_AB for more, @thisweekinAB for posts@politicalRnD for something in between

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3 replies »

    • Yep – oil companies are still going to take it in for a number of years yet, but I don’t expect they will ever again provide the employment they once did. And the US became a net exporter in 2019 – they don’t need as much of our oil as they used to. Free markets and all 🙂

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