Seamus O'Regan arrives in Calgary with the tough task of winning over the oilpatch

Seamus O'Regan arrives in Calgary with the tough task of winning over the oilpatch

For decades, Newfoundlanders have traversed the country to work in the oilpatch. It’s a long commute, but there was often a lucrative reward.

They used to come by the thousands, often on chartered flights, to work on the rigs and fill the many jobs around Fort McMurray.

Newfoundland and Labrador MP Seamus O’Regan is on a similar path, having touched down in Alberta on Thursday night with excitement for his new job.

The payoff, if any, will be difficult to earn.

O’Regan is the new natural resources minister and arguably was given the toughest portfolio by Prime Minister Justin Trudeau on Wednesday as the cabinet was announced.

Tens of thousands of workers have lost their oilpatch jobs since the price of oil collapsed in 2014. (Kyle Bakx/CBC)

There are 50,000 fewer people working in oil and gas than there were five years ago, before the price crash, according to CIBC, and western alienation in Alberta and Saskatchewan is a serious concern for the federal government.

Drilling activity continues to languish, while investors give Canada the cold shoulder. Investment in oil and gas production in Canada has fallen from about $ 80 billion in 2014 to about $ 40 billion in 2018 and 2019.

O’Regan will now get a chance to discuss all those things — and more. He’s expected to meet Friday with Alberta Energy Minister Sonya Savage and executives from the private sector.

Savage, who spoke with O’Regan on Wednesday by phone, said she’s expecting a good working relationship with the new minister.

I’m hoping that he hears the concerns coming from Alberta and understands them and that changes will be made,” Savage said in an interview. 

“We can’t have a continuation of what has happened over the past four years where policies in Ottawa were — one after the other — unfair to Alberta and harmful to Alberta.”

Alberta Energy Minister Sonya Savage says she is hoping for changes from the new natural resources minister. (CBC)

Among the top issues for the oilpatch are two pieces of legislation: one overhauling the approval process for new energy infrastructure (Bill C-69) and another restricting oil tankers in British Columbia’s northern waters (Bill C-48).

Industry wants Bill C-48 to be scrapped. Alberta Premier Jason Kenney calls Bill C-69 the “no more pipelines bill,” though it had been touted as a way to give industry faster and more predictable timelines.

Both bills have been targets of protest.

Jim Carr, the federal government’s new special representative for the Prairies, appeared to open the door to changes Thursday when he said there might be room to look at both pieces of legislation.

The comments appeared to stir some initial optimism in the oilpatch, though O’Regan suggested the government isn’t looking at changes to the legislation, but instead at how they’re implemented.

Clarity will almost certainly be sought during Friday’s meetings.

Investor attention

The hope will be that any changes will help lure dollars back to the sector.

Industry is desperate for the attention of investors and had hoped Kenney’s victory in the spring would help the situation.

O’Regan should now take the opportunity to help the oilpatch by talking up the sector to investors at home and abroad, says Marcella Munro, a senior strategist with KTG Public Affairs.

He should clearly state to the investment community that the government of Canada is in the business of making sure our oil and gas industry thrives, she says, and that the country is developing new technology for the future.

“I think that would help an awful lot,” says Munro.

The oilpatch will also want to see any promises of help to be followed with action.

Cenovus Energy spokesman Brett Harris said the industry needs new pipelines and “a fiscal and regulatory environment that addresses Canada’s eroding competitiveness and attracts investment back to the Canadian energy sector.”

Rocky relationship

No doubt, part of O’Regan’s visit will be aimed at improving relations with Ottawa.

A year ago today, when Trudeau was in Calgary to give a speech to business leaders, thousands of people gathered outside to voice their frustration with him and the uncertainty surrounding their livelihoods.

Demonstrators outside Prime Minister Justin Trudeau’s address to the Calgary Chamber of Commerce on Thursday, Nov. 22, 2018. (Tony Seskus/CBC)

Lori Williams, a political scientist at Mount Royal University in Calgary, believes it is significant that the minister’s visit would come so soon after being sworn into cabinet.

“This clearly is signalling that Alberta is a priority, that the oil industry is a priority and that the government wants to continue to strike that very delicate balance between energy and the environment,” she said.

Industry isn’t the only player watching closely to see how the government tries to strike that balance amid mounting concern over climate change.

Duncan Kenyon, Alberta director of the Pembina Institute, a clean energy think-tank, is worried when he hears about the push to make changes to Bill C-69. He sees the legislation as key to helping businesses determine whether future projects will be viable as the world moves toward a de-carbonized economy.

“We actually may end up with stranded investments because suddenly you’ve approved them under a business as usual approach and it’s not business as usual,” he said.

Liberal MP Seamus O’Regan arrives for the swearing-in ceremony in Ottawa on Nov. 20, 2019. (Adrian Wyld/The Canadian Press)

Up to speed

Every cabinet minister with a new portfolio will need time to understand the file, and the oilpatch is no different.

O’Regan may have a good understanding of the offshore oil industry in Newfoundland, but the energy sector operates substantially differently in Western Canada.

He’ll need to get a handle on the challenges of the natural gas sector, the CN Rail strike, methane regulations and, of course, the Trans Mountain expansion pipeline, to name a few. 

Tim McMillan, president of the Canadian Association of Petroleum Producers, said he’s not expecting the new minister to be fully briefed so soon after entering the job. He said the early signals were “quite positive.” 

Besides this initial trip to Calgary, O’Regan said on Thursday he’ll be returning to Alberta again next week in an effort to meet people in a variety of roles related to the oilpatch.

Surely he’ll be given lots of reading material and more advice to ponder on those long flights back home.

“There is a time-honoured tradition of Newfoundlanders to fly back and forth from Alberta for the oil and gas sector,” he said. “It’s something we’ve done for a long time.”

CBC | Business News

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