President Donald Trump received illustrative background from Canada for an early statement of energy policy lacking details but not importance. Trump signaled priority by placing his "America First Energy Plan" among Inaugural Day items of business. The plan mainly restates campaign generalities about energy. But that's enough.
"The Trump administration will embrace the shale oil and gas revolution to bring jobs and prosperity to millions of Americans," the document promises. "We must take advantage of the estimated $50 trillion in untapped shale, oil, and natural gas reserves, especially those on federal lands that the American people own." Revenue, according to the plan, will rebuild infrastructure.
Potential of development
Blustery? Yes. Overstated? Probably. That's Trump. What's important is that the plan acknowledges and seeks to profit from the economic potential of resource development.
Already, Trump contrasts his energy policy with that of his predecessor. Barack Obama resisted development of oil and gas resources while ludicrously insisting that growth of the heavily subsidized energy forms he preferred would compensate economically. His administration blitzed the oil and gas business with regulation. He underscored disregard for resource development by blocking federal oil and gas leasing off Alaska and the East Coast.
Trump and a Republican Congress will reverse those peevish genuflections to leave-it-in-the-ground extremism. In doing so they'll restore the potential to create tens of billions of dollars in wealth, jobs, incomes, and tax revenues. Obama's blithe dismissal of that potential is inexcusable. Trump deserves credit for quickly changing course.
In Canada, meanwhile, furor simmered over high-handed comments Prime Minister Justin Trudeau made in Peterborough, Ont., a week before Trump's inauguration.
"You can't make a choice between what's good for the environment and what's good for the economy," Trudeau said. "We can't shut down the oil sands tomorrow. We need to phase them out. We need to manage the transition off of our dependence on fossil fuels."
Trudeau was answering a question about his Liberal government's support for two pipelines resisted by activists but needed to accommodate growth in bitumen production from the oil sands. In November, the government approved expansion of Kinder Morgan's Trans Mountain system between Edmonton, Alta., and Burnaby, BC, and of Enbridge's replacement of the Line 3 pipeline between Hardisty, Alta., and Superior, Wisc. At the same time, it rejected Enbridge's proposed Northern Gateway pipeline between Brunderheim, Alta., and Kitimat, BC.
Alberta Premier Rachel Notley tried to ease pressure on her Liberal colleague by noting that Trudeau had, after all, approved two pipelines. But her political opponents sounded unpersuaded.
"We certainly don't need out-of-touch, federal politicians sounding like Jane Fonda on this topic," said Brian Jean, leader of the Wildrose Party. The actress visited oil sands sites on Jan. 10 to protest the newly approved pipelines. Ric McIver, interim leader of the Progressive Conservative Party, said, "Trudeau threw Alberta under the bus today, and Premier Notley is sitting on her hands playing pattycake instead of attacking on behalf of Albertans."
Trudeau's office pointed out that former Alberta premiers, including Conservative Stephen Harper, whom Notley succeeded, had agreed with the need to phase out fossil energy. Harper made a statement to that effect at a G7 meeting in 2015. He later backpedaled.
Since Harper's made his remarks, Alberta's economy has suffered further from low crude prices and a slowdown in oil-sands project starts. Now retail energy prices are rising in several provinces, including Alberta, with the start of programs aimed at lowering emissions of carbon dioxide.
Voters awaken
Much of Canada thus awakens to the multilayered cost of fusing subsidies for uneconomic energy with foresworn development of wealth-generating resources. Canadians will make their views about this strategy clear in future elections. Trudeau and his party should be worried.
In the US, voting preempted pain. Trump became president before the deprivations of politically managed energy hit with full force. The exploration and production industry should welcome his reassertion that its work has economic importance at national scale.