2019 Oil & Gas Survey Outlook Report: Grading Government Performance

In late 2018 the Daily Oil Bulletin surveyed 150 representatives from the exploration and development, oilsands, and midstream sectors to understand the key issues facing the industry in 2019. In this four-part series, Vince Lauerman sifts through the results of the 3rd annual Industry Outlook Survey to identify the challenges faced by the industry in 2018, and where it is headed in 2019.

Click here for the full report.

Yesterday, part two of this series took the pulse of how industry views the future, given the market access, environmental and economic challenges it faces.

Today, part three looks at the key policy issues facing oil and gas producers, and how the government is dealing with these issues. On Monday, part four looks at how industry is responding to these stressors, including capital spending plans, where the industry plans on spending money, and how it plans to manage costs in 2019.

Grading government performance

The respondents to the 2019 Daily Oil Bulletin Industry Survey said the Canadian and Alberta governments are failing to help the industry throughout the recent downturn. Eighty-five per cent of respondents gave the feds a failing grade this year (D or F), 4 percentage points more than last year, while F-grades increased from 56 percent to a whopping 78 per cent. The federal government did not receive a single A-grade.

Alberta’s NDP government, which was voted out of office this week by the UCP, was given failing grades by 63 per cent of respondents this year, compared 67 per cent last year, but F-grades increased 8 points to 48 per cent. A-grades slipped 2 points to 1 per cent, B-grades 1 point to 9 per cent, while C-grades increased 5 points to 26 per cent.

Federal policies unpopular with industry

The federal government’s proposed regulatory reform legislation, Bill C-69, is widely viewed as an industry killer, not just by people associated with the oil and gas industry, but Canada’s natural resource industry as a whole. Four-fifths of survey respondents said it would stop construction of new pipeline projects — a 17-percentage point bump from last year’s survey — while another 14 per cent said it would delay them substantially. A mere 6 per cent of oil-related companies said Bill C-69 would lead to only minor delays to new pipeline projects.

At the same time, survey respondents are extremely concerned about the impact of the federal government’s carbon tax on the competitiveness of the Canadian oil and industry. Seventy-four per cent of companies said it would put the industry at a significant cost disadvantage – an eight-point increase from last year — and another 21 per cent said it would put the industry at a small disadvantage.

Industry, government at odds over role of government in industry

Survey respondents see the main role of government in the energy industry to be highly divergent from the ones the Trudeau government has been attempting to impose on the country. A quarter of oil-related companies said focusing on increasing market access should be the main role of government, 22 per cent cited establishing the right fiscal, tax and regulatory regimes, and 11 per cent said treating energy on par with other industrial products.

In terms of energy themes espoused by the Trudeau government, 4 per cent of respondents said diversifying the energy industry should be the main role of government, 1 per cent cited developing pan-Canadian GHG emission and carbon trading policies, and not a single company said establishing a national climate policy or strengthening First Nations relations on energy projects.


Alberta’s environmental Image

When asked if the NDP’s efforts to improve Alberta’s environmental image had helped move pipeline projects forward, survey respondents answered a resounding no. Eighty-six per cent of companies said the NDP’s efforts had failed, 5 percentage points more than last year’s survey, and almost ten times more than responded yes.

A significant majority of respondents from every sized oil-related company believe the NDP’s efforts to improve Alberta’s environmental image have failed to move pipeline projects forward. But small companies have been especially dismissive of the NDP government’s efforts, with 93 per cent of respondents saying they have not helped, compared to four-fifths of medium-sized ones and three-quarters of large companies.

Click here for the full report.