CDN NEWS | 
US NEWS 
By David Yager
November 18, 2020
While it isn’t official yet, in January Democrat Joe Biden will become the 46th president of the United States of America.
During the campaign, Biden aggressively courted the climate concerned by pitching policies which he assured prospective voters would help the US avert global environmental catastrophe. A key element was continued legislative pressure on the production and consumption of fossil fuels.
Proposed measures included cancelling the Keystone XL pipeline (again), halting oil and gas development on federal lands, reduced methane emissions, doubling offshore wind energy by 2030, increased reforestation and the development of renewable energy on federal lands, expanded biofuels, and stricter disclosure rules for climate risk and emissions by public companies.
Biden has also pledged to rejoin the 2015 Paris emission reduction commitments that outgoing president Donald Trump rejected shortly after taking office. This puts the US on the same aspirational trajectory as Canada. The US pledge from 2015 signed by President Obama was a 26% to 28% reduction in emissions from 2005 levels by 2025. Canada’s target was 30% lower than 2005 levels by 2030.
Leading up to the election, it was widely believed that President Trump was so despised by so many for his alleged crimes against America – and four years of offending the delicate sensibility of the politically correct – that a “Blue Wave” was assured; the Democrats would win the White House, the Senate and the House of Representatives.
But for millions, voting day was a jaw dropper. The pollsters were proven wrong again when a whopping 73 million Americans or over 48% of the voters chose Trump over Biden. The Republicans retained majority control over the Senate (this could change after two run-off votes in Georgia in January) and the Democrats lost seats in the House of Representatives.
A powerful Red Tide ensured the predicted Blue Wave never hit the beach.
Much has been written by many, but a few observations are clear.
- Business is relieved that the Democrats do not control the Senate. The US Senate is a powerful institution that has provides significant checks and balances over what the sitting president can accomplish legislatively. A common view in American business is that the less that can be accomplished by Washington by any administration, the more positive it is for the economy. Smaller government is better government.
- The ultra-left elements of the Democratic platform on social issues and climate policy were rejected by a massive number of American voters as much too extremist. Outspoken New York Democratic congresswoman and Green New Deal proponent Alexandria Ocasio-Cortez has already publicly warned Biden that while she and her big government, social justice soulmates kept quiet during the election so the party would appear more moderate, with the election over the pressure to take the US further left will resume loudly and proudly.
- No matter what Biden said on the campaign trail, he is acknowledged as the same pragmatic legislator that has kept him in federal politics for 48 years. Biden has at one point or another supported both sides of almost every major American public policy issue. Which means he will be less doctrinaire once in office than he appeared to be while seeking it. Like most elected politicians, keeping his job will be as important as doing his job.
For oil and gas this means Biden is unlikely to pursue any radical policy changes that will cost jobs, chase away investment, or significantly increase the cost of energy to the point that it affects the electability of Democrats in the upcoming mid-term elections. This translates into incumbent fossil fuels remaining affordable compared to higher cost low-carbon alternatives.
Canadian politicians are so relieved at the election results that there is even speculation that they may be able to persuade the new president to reconsider his pledge to kill Keystone XL. This may be a long shot, but had the Democrats swept all three levels of government it is unlikely anyone would have imagined this was remotely possible.
What should be noted on this side of the 49th parallel is how similar Americans are on matters of oil and climate, both geographically and what should be done about it. A thoughtful synopsis was published by S&P Global Platts on November 4. It opened by explaining how the results were, “…revealing a deepening US divide on energy issues that will make it harder to pursue federal policy on decarbonization and mitigating climate change.”
In other words, the Green New Deal is dead thanks to the force of 73 million Donald Trump supporters. However, this news outlet, like many in America, buys into the direct drive relationship between carbon emissions and terrible weather writing, “Florida and Texas…states hard-hit by recent severe weather events…nevertheless reaffirmed support for Republicans, who oppose climate legislation.”
Implicit in this selection of words is that a different electoral outcome would change the weather. Wow. And as is usually the case in Canada, the rapidly growing emissions from India and China that offset whatever we do in North America to reduce them didn’t rate mention.
Canadians often forget that US elections are about much more than selecting the next president. In Texas, a ballot proposition on tougher limits on natural gas flaring was rejected. Meanwhile, ignoring the California experience this summer Nevada supported a 50% renewable mandate by 2030. Louisiana voted to connect property taxes to rates of production. This can go both ways for producers and would be useful in Alberta right now.
That doesn’t mean that President Biden will be powerless on the climate file. But he will certainly be more limited that he would have been otherwise. That’s why US Senate elections are so important.
The US also had a number of state governor elections. The article wrote, “States dependent upon fossil fuels that remain significant players in coal production…held on to their Republican leaders.” One was Indiana which got 59% of its electricity from coal in 2019. North Dakota, home of the Bakken light tight oil play, voted Republican. In the heavily populated northwest, New Hampshire stood out as voting Republican in a part of the US that is well known to being increasingly opposed to fossil fuels.
As Canada has learned the hard way, what various states are thinking about oil pipelines is extremely important. It was actions in Montana, Minnesota, Nebraska and Michigan that have made things difficult for Keystone XL, the Enbridge Line 3 replacement and, most recently, Enbridge Line 5.
Yet another attempt by the governor of Michigan to shut down Enbridge Line 5 was announced November 12. This is a key pipeline for oil and propane for Ontario and Quebec. Whether the US can legally block Canadian fuel from reaching Canadian consumers because of a potential environmental event in the US will be an interesting test for the new Biden/Trudeau relationship.
Views about the future of fossil fuels in the urban and rural regions of US and Canada are very similar. Big cities like New York, Chicago, Los Angeles and Denver and the Bay area of California are staunchly Democrat and strong opponents of coal, oil and gas. San Francisco recently outlawed the installation of natural gas in new buildings beginning in 2021.
That California ran out of electricity last summer because of a heavy dependence upon renewables and insufficient natural gas-fired backup doesn’t appear to have materially altered the political narrative.
Meanwhile, the regions that produce fossil fuels like Texas, Louisiana, North Dakota, Montana, Oklahoma, Utah, Wyoming, West Virginia, Mississippi and Ohio remain loyally Republican.
Canada votes the same way. The densely populated regions of Quebec, Ontario BC’s Lower Mainland and Vancouver Island – which produce no fossil fuels – voted Liberal, New Democrat, Green or Bloc Quebecois. The regions of Canada which produce coal, oil and natural gas in southwest Manitoba, Saskatchewan, Alberta and eastern BC all support the Conservative Party.
That the regions of Canada that don’t produce fossil fuels can inflict their policies on the regions that do has been glaringly obvious since 2015. Pipeline opposition has come from the lower mainland of BC, urban Ontario and Quebec. Support for stronger climate change policies in these regions is obvious by the MPs they elect, as is their indifference to the economic impact on the parts of Canada that depend upon oil and gas to employ hundreds of thousands of people and power their economies.
They can’t do this in the US. The primary reason is the Senate. When it was written, the US constitution needed the support of the smaller states so allocation of seats in the upper house was apportioned equally among all the founding states, large or small. And because it was a fledgling model democracy, the senators were elected. Every state got two. This was a structural check and balance to ensure the more populated states could not inflict their will on the smaller ones.
In Canada, the exact opposite is true. Canada’s constitution was modelled after the British political system that had none of the regional population imbalances that were created in Canada and the US due to the settlement of huge and previously near-empty areas. There are no parallels anywhere in the world to the settlement, population growth and economic influence of land-locked but resource-rich western regions of Canada and the US that has taken place in only 150 years.
When Upper and Lower Canada (Ontario and Quebec) conceived Canada and the British North America Act, the structure ensured the founding former colonies would always have control over the Senate. Canada’s Senate has nothing do with population, equality or elections. Quebec and Ontario each have 24 senators by law. New Brunswick and Nova Scotia, smaller but original participants in Confederation, each have 10. All four western provinces each have six each.
Today New Brunswick and Nova Scotia have 20 senators for 1.7 million citizens. Alberta has six senators for 4.4 million people.
Institutionalized central Canadian political control is well described in a recent book edited by Calgary academics Ted Morton, Jack Mintz and Tom Flanagan. Titled Moment of Truth – How to Think About Alberta’s Future, it is a great read and available on Amazon.
The ineffectiveness of the senate to protect regional interests became glaringly obvious in 2019 when the last chance to stop bills C-48 and C-69 lay in the so-called “chamber of sober second thought.” While furious lobbying managed to extract some amendments to C-69, the two bills were regarded in the west as billboards to the world that Canada was longer interested in foreign investment. The opposition was fierce and remains so today.
The intransigence of the Senate over these bills, and the re-election of a Liberal federal government propped up by an even more fossil fuel unfriendly NDP caucus in 2019, have added significantly to growing western alienation. The result is a multitude of movements and political organizations proposing everything from referendums on equalization to outright separation from the rest of Canada.
A great Canadian pastime is dispensing advice on American politics and its two-party system. From this side of the border the Democrats and Republicans appear very polarized and doctrinaire. The media coverage seems to be equally biased. We regularly see images and news reports about extremists from both dies fighting in the streets and destroying public property. Each state has different ways of counting ballots. The final outcome of the presidential election remains in question long after the polls closed. Canadians are quick to sanctimoniously opine, “This would never happen in Canada.”
But the US political structure with an elected Senate specifically constructed to ensure all regions of the country are fairly represented and protected is, for those of us on the receiving end of the voter might of the rest of Canada, a stroke of genius. This is how the essential but continually maligned US fossil fuel industries are represented and protected.
This too would never happen in Canada.
David Yager is an oil service executive, energy policy analyst, oil writer and author of From Miracle to Menace – Alberta, A Carbon Story. More at www.miracletomenace.ca
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