The federal government plans to spend up to $280,000 for a new study on Canada’s competitiveness in the oil and gas industry as investment lags and the United States offers new incentives for companies to move south. Oil sands study “needed”
An advance contract award notice, prepared by Natural Resources Canada and made public on Wednesday morning, puts the call out for an outside supplier to do the work, with international consulting firm Wood Mackenzie identified as the preferred candidate.
The document uses unusually stark language to describe the current state of affairs in the Canadian energy sector, noting that investment in our oil and gas industry fell by over 50 per cent between 2014 and 2016.
“While investment has recovered from the low point, it is not expected to reach previous levels anytime soon,” the document notes.
A loss of new investment opportunities to the United States is of particular concern, it adds. Tax reforms and a loosening of regulatory frameworks by U.S. President Donald Trump‘s administration could prompt more and more companies to head south.
Minister aware of challenges
A spokesperson for the office of Natural Resources Minister Jim Carr said Wednesday that the minister is “aware of the short-term challenges facing the industry,” and recognizes that the natural resource sector – including oil and gas – remains a major contributor to the economy.
Ottawa is working with the provinces and territories “to better understand the challenges that the sector is facing as market conditions change,” added Alexandre Deslongchamps, and in the interim, has approved a number of major energy projects.
Let me save the Ottawa Liberals $280,000…
The lack of investment in Alberta Oil Sands isn’t hard to figure out. It is due to the lack of pipelines providing access the world markets. It is due to the lack of confidence companies have in the economic environment of Alberta, and Canada as a whole.
Rex Murphy – His article with more sarcasm than even I can produce! Says it best:
“Near midweek, the announcement came that his government would fund, by nearly $300,000, research into the deepest and most unsettling riddle of our entire national life: Why is our Canadian oil and gas sector falling behind? The fate of the Franklin expedition, which troubled us for so long, was just a Cracker Jack puzzle compared to this conundrum.”
Read it here:
— National Post (@nationalpost) April 7, 2018
That’s your Oil Sands Saturday.