[lbo-talk] Robyn Allan: An open letter to Rachel Notley and Jason Kenney

Marv Gandall marvgand2 at gmail.com
Fri Mar 8 10:14:26 PST 2019

Rachel Notley, Jason Kenney, Justin Trudeau and other politicians may believe their own rosy forecasts of an Alberta tar sands revival, but they’re being played for patsies by the oil firms which are using government subsidies to finance their abandonment of it, according to Canada’s best energy economist, Robyn Allan.

“The more taxpayer money they can convince all levels of government to transfer to their corporate treasuries, the easier their transition off fossil fuels becomes”, she says. “Statoil, Marathon Oil, Royal Dutch Shell, Total, Murphy Oil and ConocoPhillips have all significantly reduced or completely divested their oilsands assets. Husky thought it might like to take over oilsands producer MEG Energy but backed away from its bid. Most recently, Devon announced its wish to unload its oilsands holdings.”

The continued decline of the tar sands throws into bold relief the folly of last year’s decision by the Trudeau government to buy the controversial Trans Mountain pipeline system from Kinder Morgan. As Allan notes, “the lack of investment in expanding the oilsands means supply will be insufficient to support Trans Mountain’s expansion.”

Allan estimates the feds have already spent $10 billion on the pipeline, well in excess of the $4.5 billion paid to Kinder Morgan. The increased capital costs to build the pipeline extension are supposed to be passed on to the oil producers who will use it, but they are likely to walk away from their contracts unless the government further slashes their toll rates at taxpayers’ expense.

“Terminating Trans Mountain’s expansion avoids throwing more money at an industry in decline when fiscal resources are needed to invest in sectors that offer the planet, and our children, a future”, she says.


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