When the NDP government was elected in Alberta, I sold two of my six oil stocks. Yesterday morning before Stephen Harper’s agreement with the G7 was announced to phase out fossil fuels by 2100, I sold two more. This morning I won’t sell my last two. Reason? One of the companies is not active in Canada, the other is on an acquisition march and might become a take-over target itself.
That’s about all the uncertainty I can tolerate in the oil and gas industry. I don’t want to lose any more sleep over the Prime Minister’s commitment. I’ll leave the sleepless nights to Harper and he will be having them. Why? Because in the coming months his Conservative government will likely lose any hope of forming a majority government in the next election and his party may not even form a minority one. In fact, by the end of the year, they may not have much political clout at all. ‘Eastern treachery’ will cost him dearly in the West, although many Conservative voters in provinces to the east of Ottawa aren’t going to be very happy either.
Canadians will not be focusing on his caveats to this decision such as reported in today’s Globe and Mail, “but Canadian officials are playing down the promise as an ‘aspirational’ target and Stephen Harper says it will only be reached through advances in technology.” The opposition parties’ battle cry in the West for our fall election may even reflect ‘remembrance of 2100’ that may ring just as strongly as it did in America over the Alamo. “Damned Easteners” is still an epithet remembered there.
One thing that does seem certain is that with the reduction targets in carbon emissions by 2050, Canadian oil companies will have little incentive to spend any more serious money on reducing carbon emissions. For the companies that stay, the motivation will be to extract fossil fuel as quickly as it can be sold. If the NDP government in Alberta makes life too difficult for them, they’ll just seriously cut back or pack up and move. Or, maybe like the tobacco companies, our oil and gas businesses will diversify some of their capital into different industries and just get richer.