As the world moves forward with the Paris Climate Agreement, one world leader has risen to the top of the pile in terms of outspoken support of the pact. That man is Canada’s Prime Minister Justin Trudeau. His vocal “disappointment” at the United States’ departure from the Paris Agreement has won him fans around the globe. Yet, the young Prime Minister’s support for the act is threatening to destabilize one of his country’s most important economic sectors: the oil and gas industry.
The Plan for Regulation in Canada’s Future
The Liberal Prime Minister is attacking climate change on all fronts. At the end of May, he announced a new set of rule intended to reduce methane pollution across the country’s oil and gas industry. The announcement isn’t surprising, as the increased regulations supposedly arose as a result of an agreement made between Trudeau and former President Obama late in the latter’s administration.
Coupled with the carbon tax that’s set to take effect in 2018, these new regulations will have a severe impact in the coming years. While they might appear benevolent to outsiders, the average Canadian might end up singing a different tune.
The Real Impact of Paris on Canada
When the carbon tax goes into effect next year, most experts suggest the price of fuel will rise more than ten cents a liter at the pump. That may not sound like much, but it will add up. That drastically increased everyday expense is just one ominous outcome of the new regulations.
The other victim is the country’s oil and gas sector itself. The new regulations have conspired with lowered international energy prices and higher-cost projects to price out several small-to-medium size oil and gas companies. In the last 30 months, Trudeau’s policies have contributed to the loss of 17 publicly traded junior oil and gas companies.
As Goes Canada, So Goes the United States
The issues in Canada won’t remain restricted to north of the border. The future of the Canadian oil and gas industry is intertwined with the fate of the United States oil and gas sector, as well. While the United States has expanded its oil and gas client list in recent months, Canada is still the United States’ largest energy trade partner. In 2016, we imported an average of 3.3 million barrels of crude oil each day.
Should the energy sector in Canada become destabilized, it would surely not take long for the effects to be felt at home.