Imperial Oil has been an iconic, essential component of the Canadian hydrocarbon production industry since its beginnings in the late 1940s, at the centre of most major developments from Leduc to Syncrude to Kearl.
This week’s announcement that it will shut down essentially all of its Calgary-based activities, leading to a relocation of operating personnel to Strathcona and outright staff reductions on the order of 20%, represents a profound, if not cataclysmic, inflection point for the industry and Alberta.
The question that must be answered, and that the Premier should demand from Imperial and ExxonMobil, is how much this decision represents a fundamental rejection of Western Canada as a location for future investment due to Canadian climate and energy policy.
If Albertans are brutally honest with themselves, how can they not draw that conclusion? Consider the litany of frustrated infrastructure projects over the last ten years, from KXL to Energy East to Northern Gateway to Petronas LNG. Or review the punitive intentions of the Carney government regarding climate and energy policy:
No reconsideration of “net zero” as a moral imperative for Canada, regardless of economic consequences.
No reversal of implausible emission caps on existing hydrocarbon production.
Continued West Coast tanker ban.
Imposition of economically punitive clean fuel standards.
No removal of punitive climate tests and consultation standards within the revised regulatory process.
Imposition of “decarbonization” on any incremental oil sands production that would underpin new export pipeline infrastructure.
Perhaps worst of all is the failure of the Carney government to forthrightly reject this dysfunction and embrace expanded hydrocarbons as a cornerstone of economic recovery in Canada, rather than clinging to delusions that imposing severe climate constraints will generate any economic return.
In any tangible present-value sense, it is all cost. Who would invest in this policy environment and record of the past ten years? So, where is the Premier? Her misplaced euphoria regarding “engagement” is increasingly hard to justify.
Simply being on some “list” is no substitute for a fundamental policy reversal by the Carney government. And what cards does the Premier have? Who knows until she engages with Albertans to acknowledge that the Carney government has shown no real willingness to fundamentally reverse policy so that companies like Exxon will reconsider their retrenchment from Alberta and Western Canada.
Alberta needs to consider all options available to it, not just pandering with “engagement” that lacks real value.
Dennis McConaghy is a Calgary-based Canadian energy executive with nearly 40 years of experience in infrastructure development
