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Why Oil and Gas Has to be Part of Canada’s Post-COVID Economic Recovery Plan – An Open Letter to Energy MinisterSeamus O’Regan – Deidra Garyk


 

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Seamus.ORegan@parl.gc.ca

Dear Minister O’Regan,

Thank you for publicly supporting Canadian energy, specifically the oil and gas sector, which, as you have said, is the driving engine of the Canadian economy, and a generator of wealth and prosperity for all Canadians.

I recently had the pleasure of listening to the AVATAR x YPAC (Young Pipeliners Association of Canada) webinar on government relations and advocacy that you and Alberta Energy Minister Savage participated in on July 24, 2020. I was really pleased to hear that you have an amicable working relationship with Minister Savage as she’s a knowledgeable, respected Minister in Alberta. Additionally, I was pleased with your understanding and appreciation of the energy sector, the oil and gas sector in particular, and its importance to Canada’s economy and Canadians’ way of life.

Today, Canadian families are struggling due to the impacts on the economy as a result of the COVID-19 virus. A credible strategy to get the economy functioning so people can go back to work is imperative. Fortunately, the energy sector can be part of the solution.

The Canadian public policy think-tank Fraser Institute recently released a report that states, “A 10% increase in the availability of affordable energy results in a 1.2% increase in GDP.” What is stated in this article that should be alarming to every Canadian worker is that Canada’s economic growth has been lower than several other developed countries, so we need to get our competitive advantage back. We can do that by ensuring effective public policy that doesn’t make access to energy too onerous or too expensive. Those with the power to set public policy must be realistic about each source of energy to ensure that we don’t impair our advantages by destroying the oil and gas sector for the sake of short-term, popular programs, such as a renewables-only approach.

According to the Fraser Institute Report, “Canada’s economy saw an overall decline of approximately 9% in March, which is the largest one-month decline in Canada’s gross domestic product (GDP) since records began being kept in 1961 (Statistics Canada, 2020a)”. Canadians are hurting, and we need a clear, comprehensive plan to get us back on track. The energy sector can help.

Ensuring Canada’s oil and gas sector, including offshore, is prosperous and functional is important, not only for economic growth, but for energy security. Canada does not have a strategic petroleum reserve like many other countries do, and this puts us at risk. Currently, there is no crude oil storage capacity in Eastern Canada. As a result, they rely on the Americans for an emergency supply of crude oil if there is a disruption, such as a rail strike.

Canadians are at risk of continued crude oil price volatility and energy insecurity due to global disruptions in supply and egress constraints. This can be resolved by establishing an emergency supply of domestically-source crude oil. This would allow production to continue uninterrupted through periods of low demand and ensure more stable tax and royalty revenue for Canadians.

Fortunately, viable options exist for the expansion of Canada’s network of storage. As an example, there is salt cavern storage potential at Fort Saskatchewan, Alberta and in southern Ontario that could be expanded upon. Building additional storage capacity across Canada would prepare the country for the next natural disaster, global crude oil price war, market disruption, or pandemic by maintaining emergency oil reserves.

Access to secure, reliable energy in a form that is usable without major, expensive modifications to existing infrastructure, including the electrical grid, will continue to be a priority for Canadians. Lack of access will mean higher energy costs, which will negatively impact every Canadian as they struggle through the lasting economic realities of the COVID pandemic.

Minister, in the webinar you also said that Canada’s biggest advantage for the energy future is our people – the skilled, educated, experienced oil and gas workers. It is precisely this human capital that has created Canada’s great wealth, working in what is undoubtedly one of the most technologically advanced industries in Canada, that needs to be recognized by the government, and encouraged through the right policy framework to create the new future energy industry and new path to future prosperity.  If your party annihilates the industry through regressive public policies, and thereby takes down its workers, it will be very difficult to meet your government’s stated goals of being the cleanest oil and gas producer in the world and achieving ‘net zero’ emissions. This is why the oil and gas sector remains important and why it has to be part of Canada’s post-COVID economic recovery plan.

I believe you understand the value of the people working in the sector due to your comment that there must be inclusivity of oil and gas workers in the energy transition. It often seems that when public policy is being drafted, the workers who are directly affected by the policy change are forgotten. It’s time to give unemployed oil and gas workers their dignity back. Give all of us out of work the opportunity to do something meaningful, challenging, and rewarding. Give us a reason for hope and a reason to wake up every morning.

Thank you for your public service.

Sincerely,

Deidra Garyk

 



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