Brian Crossman: Emissions caps, Sun Tzu and basic economics

I’m confused sometimes. Well, in truth, if you know me very well, it seems like I’m confused most of the time. In my defense, being uncertain about our beloved industry and the constant barrage of external influences from the media, eco-activists, and of course our very own government makes this understandable.  The government is easily the biggest problem. Between the in-place regulations, “green initiatives,” “carbon pricing” (it’s a damn tax) and now emissions caps, it is easy to see how this gets confusing. There is a whole bunch of moving parts, and it almost seems all this obfuscation is intentional. As Sun Tzu said, “The whole secret lies in confusing the enemy, so that he cannot fathom our real intent.” The other side is clearly trying to confuse and divide our industry (and many others for that matter) for their own ends. I guess they are familiar with Chinese warrior philosophy.

Brian Crossman is a partner at Independent Well Servicing in Estevan, he reminds you all to keep up the good work, and we will get through this. It’s just basic economics.

Let’s start with the existing regulations. I know many industry people that believe we are already over-regulated and over-administrated at all levels, federal and provincial. I believe in my heart; most reasonable people would agree with that. The largest portion of producers follow the rules, as they want to continue to operate. In my many conversations with people that run these oil and gas companies at the field level have told me that they are okay with most regulations, but many are redundant and fraught with red tape. Like any business in the world, navigating red tape and government overreach costs money. A lot of money. You might ask, “Don’t the oil companies always have record profits and can easily afford it?” More on that later.

Next on my laundry list/agenda, is dealing with the media and the “eco-activists/terrorists.” On first glance, one may think that businesses would just ignore these zealots and perpetual whiners and life would just go on. However, companies have to react to these attacks on multiple fronts, but mainly with lawyers and positive advertising campaigns. (Why do you think the Liberal government banned positive environmental advertising promoting from energy companies? Bill C-59 comes to mind) When any business has to deal with issues such as these, the only winners are the lawyers that are working on both sides. Once again, this costs time, money and patience.

This is not the last, nor the least, but for the sake of brevity, lets review the new “emissions cap.” Our wonderful Liberal government recently announced an emissions cap on Canadian oil and gas producers. Thirty percent emissions reduction in the next eight years. This of course does not include imported oil, which is helpful if your plan is to cripple your domestic oil production. But the bonus is you also get to cripple the Canadian economy to the tune of one trillion dollars in GDP. If you add that to the “carbon tax” we’ve been dealing with for some time now, it’s an economic knock-out punch like Mike Tyson would’ve given Jake Paul if the fight hadn’t been scripted. Canada simply can’t afford such nonsense.

The most important point is all the benefits oil, gas, agriculture, mining forestry and God-only-knows what else have created wealth, opportunity and untold trillions in the tax base since Canada became a country. For the government to overtax, over-regulate and generally punish legitimate business enterprises shows a lack of vision. Then we are shocked, shocked I say when local and foreign investors run away as fast as they can from Canadian business.

Still not convinced? Check your mutual funds, the Canadian stock markets and many pension funds. If business is doing well in Canada, it is reflected in our collective investment accounts. By the way, this is also how we fund nearly everything, everyday, everywhere in Canada. (Health care, education, infrastructure just for starters) Sorry pixie-dust fans, all this takes money, and a lot of it.

Time for some clarity in the face of all this uncertainty. We (and by “we” I mean the entire energy industry) have been doing this a long time. If we dial the “way-back” machine to 1851 we learn that oil was discovered in Canada by Charles Nelson Tripp at Lambton County, Ontario. That works out to about 173 years of oil patch knowledge to our credit. We have been doing it longer than Canada has been a country. We were, are and will continue to be trailblazers. That is everyone, whether you are the CEO of a major oil and gas company, the accountant, a roughneck or even the safety person, you all are fighting the same battle. That is to deliver a high-quality, ethical resource that is required to keep modern society alive and well.

I shudder to think what Canada would be like, or the world for that matter without fossil fuels and the quality of life the resource has provided.

Going back to the original Sun Tzu quote at the beginning of my rant, we have to ask, “What is their real intent?” If you listen to what the prime minister and Steven Guilbeault say, the goal is to save the planet from climate change. If this is what their true intent, I applaud their desire to make things better. But if you look at the change their actions have created (or more accurately have not) it begs many questions, such as “Is it acceptable to impoverish your nation on personal vanity?”  Should we as a country and industry make ourselves less competitive on a global level? This is an industry that most other countries look up to in regard to safety, efficiency and environmental practices. But when the true intent is revealed, and we can see who and what profits from the “Green Slush Fund” and other ill-conceived projects. In the past nine years the Sustainable Technology Development Fund has been give nearly $860,000,000 of which $130,000,000 was given to companies with a conflict of interest or were ineligible altogether. (As reported by the Canadian Taxpayers Federation) This doesn’t include the 300,000,000 taxpayer dollars that has been missing for some time now. If it is truly about saving the planet, wouldn’t you fund solutions that actually work? Someone is getting rich off this, and it sure as hell isn’t the taxpayers. (Hint, Liberal Party of Canada friends, families and supporters)

Despite all the positive accolades about Canadian oil and gas, the negative rhetoric from the feds will continue. “Every battle is won before it is fought” is another quote by Sun Tzu that applies here. But this industry has prevailed since 1851. It may not seem like it, but we are winning and win we will.

Our adversaries may have been reading up on warrior philosophy, but all of us in the energy industry have been living it our entire careers. And when I think about that, I like our chances. All damn day.