- + Canadian oil industry has been roughly hurt in the late months.
- + Trudeau has announced great economic measures to support this industry.
- + Both environmentalist groups and pro-oil conservatives applaud his measures.
Why is Trudeau’s heat level Blazing?
Answer: After Trudeau’s popularity decreased in 2019, he is now on the rise as the great economic measures he announced to protect the gas and oil industry have been applauded by both environmentalists and the industry itself.
Justin Trudeau revived his party in the 2015 presidential elections, in which he won an absolute majority for the Liberal Party. This was all in the past when the leader’s popularity fell in the 2019 elections, losing 27 seats. Trudeaumania seemed to be coming to an end. The conservative force is on the rise in a country where the oil industry has a very relevant weight – and which usually shows friendliness towards the Conservative Party.
Coronavirus has not only meant the lockdown of the world population, but also, and as a direct consequence, a slowdown in global energy demand. The situation for the natural gas and oil industry hasn’t been a fairy tale. But all got worse when a dispute between Putin and OPEC about oil production worsened the coordination of oil prices. In April, the price of shipping oil and gas was higher than the price of the fuel itself, meaning an unprecedented situation for this industry.
The above means a lot for Trudeau, Prime Minister of Canada, a territory in which lies the third largest crude oil reserves in the world. Trudeau and other political leaders in Canada have been concerned about the situation that one of the key economic drivers in Canada is facing. Affected by the energy demand collapse and the disputes in oil prices regulation and market share battle, the industry that provides for more than 400,000 jobs in Canada is being threatened.
Pressures on Trudeau were heavy. Oil and gas companies were demanding help, while the conservatives, led by Kenney – premier of Alberta, a territory in which the largest Canadian oil fields are found – were using the situation to criticize Trudeau’s work and undermine his popularity. It was an uncomfortable situation for someone who has committed to fight against climate change, but also defends the economic development of his country – including the oil and gas industry. The issue was already a controversial topic when Justin Trudeau’s father was in office during the 1980s.
In view of this situation, Trudeau decided to announce three main measures to cope with the energy crisis. The first one is an emissions reduction fund that consists of a package of repayable loans to resource companies with a value of $750 million. These loans are intended to push companies to meet new regulations on methane emissions. The second one is a $1.7 billion aid for cleaning oil wells which are no longer in use, therefore, eliminating its damaging impact in the environment. The third and last one is a credit support for medium-sized energy companies.
The measures show a mixture between economic aid and Trudeau’s environmental concerns. This has left no one indifferent, and relevant environmental voices applaud the reaction of their Prime Minister. But, in addition, Trudeau has also received the support from the Conservative Party, including its leader, Kenney.
What is changing Trudeau’s temperature?
Answer: The support of environmentalist groups, the oil and natural gas industry, and conservative leaders towards Trudeau’s measures to help economically this industry, while still advocating against climate change.
Jason Kenney and the United Conservative Party (UCP) are firm advocates of the oil and gas industry, especially in Alberta. Kenney’s concerns about the energy sector weren’t unfounded, as the collapse of this industry would lead to an increase in the unemployment rate.
After weeks pressuring Trudeau’s government, the response arrived, and it meant economic aid to the energy industry accompanied with environmental measures. Although he rejects the green left political agenda, Kenney applauded Trudeau’s announcement on the measures for the oil and gas industry.
“Thank you to the Prime Minister and the fed govt for announcing $1.7 billion to accelerate cleanup of orphaned and abandoned wells in Canada’s energy sector,” said Kenney after Trudeau’s press communication.
Although there have been critics within the conservatives for the delay in the measures, the support of the conservatives’ leader means a win for Trudeau, whose policies towards the oil and gas sector were considered as actively hostile for Kenney himself.
Oil and gas companies – such as Suncor Energy Inc. and Cenovus Energy Inc. – have made no statement on social media, although their relief has been shown in the conservatives’ declarations. These are good news, mainly if we bear in mind that the last goal of these measures is “to create immediate jobs in these provinces while helping companies avoid bankruptcy and supporting our environmental targets”, as Trudeau highlighted.
On the other hand, several environmentalists have also applauded Trudeau’s reaction to the collapse of the energy industry, as his financial aid is in part conditioned to environmental targets. One of them is the executive director of Clean Energy Canada, Merran Smith, who sees a win-win for employment and the environment in matching oil and gas with environmental clean-up. She also stated:
“It sends an important signal that the federal government doesn’t intend to back away from its climate plan, but rather is inclined to orient relief and, we hope, subsequent stimulus efforts towards activities that are aligned with their climate commitments and will reduce pollution”
Tzeporah Berman, a highly relevant environmentalist in the political scene, also showed her support to these measures publicly: “This bailout announcement is a turning point for oil & gas politics in Canada. Supporting workers, addressing climate change, cleaning up orphan wells all measures that align with netzero by 2050 and the need to wind down this industry to do that. Hard but necessary.”
Trudeau has seen very positive feedback to the measures he adopted, which have been able to even align pro-oil politicians with environmentalist figures. It seems the right way of doing politics, and a great path to restore his popularity.
What is driving Trudeau?
Answer: Trudeau considers himself an ally of the environment, or at least this is what his electorate expects of him. But he is also the leader of the Liberal Party, so the economy must be preserved.
Trudeau’s past is highly related to the youth, as he was a teacher for some years before starting his political career. He has shown to be interested in what concerns young people. This may explain why Trudeau has been committed to fighting climate change since the beginning of his first term. In 2016, he announced a ban on the licensing of drilling in the Arctic territory, a measure that came hand in hand with Obama’s position on the matter.
As a consequence, Trudeau has been implementing various measures in Canada to reduce industry pollution, as well as reaching agreements with Obama and Peña Nieto on clean energy and the environment. These actions have earned Trudeau a reputation as a defender of the environment, despite the purchase of the Trans Mountain Pipeline, which some describe as contrary to the Liberal leader’s climate change policy.
All these actions and promises to fight climate change placed Trudeau in a position where he could not ignore the environment in the measures he would take in the face of the current energy industry crisis. He stated: “Just because we’re in a health crisis doesn’t mean we can neglect the environmental crisis”. Trudeau’s electorate expects that he doesn’t give up on fighting climate change, and he needs their support to offset his popularity fall in 2019.
On the other hand, oil and gas is a heavy industry in Canada’s GDP which also gives the country a great position on energy geopolitics. Trudeau is aware of that and the UCP – with a special highlight on Kenney’s speeches – constantly reminds him of the industry’s importance. As a consequence, Trudeau cannot ignore the aid this industry is asking for. Not only because of its economic relevance, but also because Trudeau needs to approach the citizens of Alberta, which is a place where the liberals have few supporters.
The Liberals plan is clearly engaged towards the protection of nature and fighting climate change, but it’s also concerned about the energy industry. Consequently, in order to maintain the strength of his political party in Alberta, keep a major Canadian industry alive, and be coherent with his environmental speech, Trudeau has found the most suitable answer with his measures.
What does this mean for you?
Answer: With these measures, Trudeau has shown that economic development can go together with a transition towards a more climate neutral economy. It can be used as an example for other oil and gas energy power leaders.
In a world where environmental policies seem weak, and the oil and gas industry seem to have no threats, a step towards a new paradigm has been taken by Justin Trudeau. The Canadian Prime Minister has found a solution that represents the meeting point between his country’s economic development and the demands of environmental groups.
It can be thought of as a movement that seeks to keep its electorate faithful while satisfying those less sympathetic to Trudeau. But a reading of social responsibility in the economy can also be derived. The Prime Minister is aware of the relevance of oil and gas in the economy of the country he leads, and the strategic power this brings to him within a geopolitical vision. At the same time, he has been able to listen to both the young people and experienced activists for the environment.
It is a gesture of high political standing not to have abandoned his commitment to the environment in the midst of an unprecedented crisis in a sector so relevant to Canada. Trudeau has shown strength in the face of the pressures he has received from both its political opponents and the industry itself.
This package of measures, whose impact is at the national level, can have a very beneficial international impact. If other leaders of energy-intensive countries were to make the transition to a greener economy, the goals of fighting climate change would be closer to becoming a reality. Moreover, this would be an effective demonstration that environmental protection does not mean a freeze on the economy, nor an absolute rejection of the oil and gas industry. Instead, environmental protection is a process that must be carried out with political commitment and determination.