Today, Canada’s federal government announced plans to spend upwards of $280,000 on a new study examining how competitive the northern nation is in the oil and gas industry. Natural Resources Canada prepared an advance contract award notice that was made public yesterday, calling for an outside supplier to conduct the work for the study, identifying international consulting firm Wood Mackenzie as the preferred candidate. The advance contract award notice stated that the Canadian oil and gas industry fell by over 50 percent between 2014 and 2016.
The decision to conduct such an expensive study is the result of diminishing investments in Canadian oil and gas businesses. Additionally, new American incentives for companies to move oil and gas operations to the United States makes it less appealing for enterprises to invest in Canada.
Canada’s liberal government has recently emphasized the importance of the nation’s oil and gas industry embracing greener, innovative technologies to minimize the environmental impact. Legislation works its way through the Canadian Parliament would completely overhaul the assessment and approval processes for future energy projects, adding more hoops for businesses to jump through before breaking ground.
When asked about the study, Alexandre Deslongchamps, press secretary for the Office of the Minister of Natural Resource Canada, said it would, “build on commitments made with provincial partners at the Energy and Mines Ministers Conference in August 2017 … to ensure we seize opportunities for economic growth and emission reductions.”
However, Conservative natural resources critic Shannon Stubbs considers the study to be, “a very costly exercise to appear to be doing something.”
While the final report must be delivered no later than June 30, 2018, this uncertainty demonstrates the viability of the oil and gas industry in the United States. For those businesses seeking to invest in North America, United States oil and gas enterprises are far more reliable than Canadian counterparts.
Additionally, tax reforms and loosened regulatory standards by President Trump’s administration makes investing in American oil and gas projects even more enticing. While Canadians are consumed with studying why their oil and gas industry is flatlining, American business leaders are expanding their companies and projects to take advantage of better opportunities in the oil and gas field.