Varcoe: Amid economic anxiety, election battle shapes up over energy

Varcoe: Amid economic anxiety, election battle shapes up over energy
NDP Leader Rachel Notley launched the 2019 provincial election campaign Tuesday in downtown Calgary with talk of fighting for jobs, diversifying the economy — and battling for pipelines.

United Conservative Party Leader Jason Kenney kicked off his campaign in front of a rig in Leduc talking about the economy, jobs — and pipelines. (Those words were literally on the sign resting under his microphone.)

As Albertans head to the polls on April 16, the race will focus on an array of issues facing the economy today, from high unemployment and weak investment levels to curtailment and the fragile state of the oil and gas sector.

To modify a line from former U.S. president Bill Clinton’s campaign, it’s about energy, stupid.

Alberta has diversified and expanded in areas such as technology and financial services in recent years, yet the oilpatch remains the powerhouse behind the economy.

Today, it’s like a car stuck in a ditch, trying to regain traction.

Until new oil pipelines are built, other problems surrounding reduced oilpatch capital spending, less drilling and a choppy recovery won’t fade away.

“Pipelines will be central,” Notley told reporters in Calgary, a city still recovering from the global oil price downturn that began four years ago.

“I believe we are closer than we ever have been before … it’s been over 60 years since a pipeline to tidewater has been built. It’s not an easy task.”

Kenney began his campaign outside Total Energy Services in Leduc, an oilfield services company hit hard by the recession.

The company shuttered five branches in Western Canada last year.

“We would move from the NDP’s reactive, passive, defensive approach on pipelines to a proactive, strategic and assertive approach,” Kenney said.

For the energy sector, being stuck in the crosshairs of a volatile political campaign is not a comfortable spot to be, but building energy infrastructure is a linchpin for unlocking future growth.

Oil production has increased by 20 per cent since 2015, yet legal and regulatory hurdles on both sides of the Canadian-U.S. border have obstructed pipeline construction, costing the province millions of dollars a day.

In the past month, Enbridge’s Line 3 project and TransCanada’s Keystone XL pipeline have both faced setbacks in the U.S.

The Trudeau government spent $4.5 billion last year to buy the Trans Mountain pipeline, but a legal ruling put the expansion project on hold.

Without sufficient pipeline capacity, the province has had to restrict oil production.

The winter drilling season in Western Canada was down almost 30 per cent from 2018 levels, noted Kevin Neveu, CEO of Precision Drilling.

“What we see in Canada is our customers are concerned, worried . . . and still don’t have a good sense of increased pipeline capacity,” he said in an interview.
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