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Months of Open Advocacy, Direct Intervention Bring Fossils the Election Outcome They Feared

After months of open advocacy, thousands if not millions of dollars in campaign spending, and direct collaboration with the federal Conservative Party that prompted a complaint to Elections Canada, the fossil industry is confronting the election outcome it feared most: a Liberal minority government.

“Political risks to Canada’s 590,000 b/d Trans Mountain oil pipeline have grown as tight polls ahead of Monday’s federal election increase the odds of a minority government, even though both leading candidates support the project,” S&P Global Platts wrote last Friday. “Under an election scenario that Prime Minister Justin Trudeau’s Liberal Party wins the most votes but not enough for a majority government, he would need New Democratic or Green Party support to stay in power. Both parties have campaigned on stopping the Trans Mountain pipeline expansion to British Columbia.”

As it turned out, the new parliamentary math hands the balance of power to the NDP or the independentist Bloc Québécois. Last night, Bloc leader Yves-François Blanchet said his resurgent caucus of 32 MPs would focus on environment, not sovereignty, and oppose any pipeline through his province.

Which might do little to counter S&P’s prediction that a minority government would mean further delays for the intensely controversial and economically tenuous Trans Mountain pipeline expansion. “There are some concerned that a Liberal minority which forms a coalition with a less [fossil] industry-friendly party could lead to challenges on the Trans Mountain expansion’s ability to proceed,” said Tudor, Pickering, Holt analyst Matt Murphy.

This morning, the Globe and Mail says Alberta is waking up to “what downtown Calgary had most feared” post-election. “I’ve never seen so much angst about an election outcome,” said veteran fossil executive Rick Orman. “There’s a palpable fear about what an alliance between Justin Trudeau and  Jagmeet Singh could mean for the oil and gas business.”

While the previous government’s plans to expand Trans Mountain “are not subject to a vote in the House of Commons,” the Globe writes, “the fact the Liberals will be beholden to the NDP or even the Bloc Québécois to pass laws or survive confidence votes is a worst-case scenario for the oil and gas sector.” It means a pipeline-friendly Trudeau “will need to at least occasionally work with a party that doesn’t want the Trans Mountain pipeline expansion to go ahead—or any other oil pipeline, for that matter. It’s not likely to make the Liberals more receptive to oil industry concerns.”

CBC agrees that “the parliamentary math likely will require [Trudeau] to regularly satisfy either the Bloc or the NDP, and that may give him licence to lean into that progressive agenda,” particularly after he framed the election result as a win for that agenda and a “loss for the Conservative alternative” at the Liberals’ victory celebration in Montreal last night. As well, “the Conservatives may go looking for another leader, giving Trudeau more time and room to operate while managing his minority in the House of Commons,” CBC adds.

All of which points to the bridge-building and grassroot transition work the government will have to undertake to win the confidence of the men and women who work in the sprawling oil fields around the town of Drayton Valley, Alberta, for whom the composition of the new minority government may well feel like the end of the world as they know it.

In an interview the day before the vote, Drayton Valley oilpatch veteran Tim Cameron told CBC his family’s and his community’s future would rest on whether the Trans Mountain expansion is completed. “If we get a minority government that wants no Western Canadian energy, then I’ll go somewhere else,” he said. “I’m a father that has three growing children. Getting a full-time job in retail…doesn’t provide me with a living or options for retirement.”

An environmental technician who “was accustomed to working as many as 330 days a year” during the oil and gas boom, times have been lean for Cameron, more recently a co-founder of the non-profit Rally Canada pipeline advocacy group, since global oil and gas prices began crashing in 2014. “It’s just business after business hanging on by a thread,” he said, with the fossil sector’s failure triggering a local cascade of economic suffering, from layoffs to bankruptcies.

But Cameron’s prescription for rebuilding his region’s economy pointed to the work ahead to build confidence in the clean energy economy that is beginning to take hold in Alberta: “If you don’t build pipelines, if you don’t drill wells—which is what the Greens and the NDP are saying—then in a very short amount of time, [Canadians] will be in a position where we have to import energy just to maintain the lifestyles we have right now,” he said.

Cameron touted the “unbelievably rigorous” environmental standards the oil industry must meet in Canada. “It’s suffocating,” he told CBC. “Actually, it’s almost impeding industry, but it’s there to protect the environment. And it’s there so that we can continue to be world leaders in what we do.” But former Pembina Institute executive director Ed Whittingham pointed to the “inescapable fact” that fossil fuel extraction in Alberta is “high-cost and high-carbon at a time when the world is going toward low-cost, low-carbon sources of oil.” While Whittingham supports the Trans Mountain expansion, and “oil is going to be around,” he said, “there will be less of it consumed,” making it imperative for Albertans to turn their attention to “where the puck is going” in global energy markets.