Skip to main content

Canadian Natural Resources Ltd.'s declaration that it cannot create a detailed business plan until Alberta's new government provides more information on energy policy could backfire as the oil and gas industry tries to establish relationships with politicians and advisers in charge of rewriting regulations.

Alberta energy executives are scurrying to make friends with provincial Premier Rachel Notley and her colleagues in the New Democratic Party. But CNRL rejected the gentle approach Wednesday when it cancelled its so-called investor day, arguing it cannot allocate cash until the newly elected NDP clarifies its position on royalties, taxes, environmental policies and greenhouse gases.

The message – that CNRL is hamstrung because of the new government – could damage the industry's chances of forming a co-operative relationship with Ms. Notley and her caucus, observers say. The Premier in May ended the Progressive Conservative Party's 44-year streak in power, making oil and gas executives and investors nervous and cutting off their access to decision makers. Now, Alberta's business leaders must revise their political playbook.

Story continues below advertisement

"It is okay to be a bit afraid of change," said Melanee Thomas, a professor of political science at the University of Calgary. "But being afraid of democratic change, and then being derisive about it as a result, is not an effective strategy.

"It doesn't strike me as a savvy government relations," she said. "The solution is to go out and build good, respectful contacts with government."

Alberta is on its fifth premier since Calgary Mayor Naheed Nenshi, a popular, left-leaning politician, came to office four-and-a-half-years ago. He believes leaders in the oil patch understand that being confrontational will hinder their lobbying efforts.

"Industry in Alberta is very, very wary of the unintended consequences of taking a hard line with the new government right away," Mr. Nenshi said in an interview a week after the provincial election. "They recognize that she's made two promises – an increase in the corporate tax rate and a royalty review – and they are not really going to tell her: 'Well, you've got to violate your promises.' They understand those promises were made and that's what people voted for."

CNRL, which has revised its 2015 budget three times since November, said one of the reasons it cannot finalize spending plans is because it is waiting for clarity on greenhouse-gas policies. Right now, major emitters in Alberta pay $15 for every tonne of greenhouse gas they produce above a certain threshold. This regulation expires at the end of June, and scores of oil and gas firms have long calculated how they would fare under stiffer rules. Cenovus Energy Inc., for example, says it can "compete" if carbon levies hit $65 a tonne, spokesman Brett Harris said.

Rich Kruger, Imperial Oil Ltd.'s chief executive, on Thursday signalled he welcomes a review Alberta's energy policies.

"We have this growing demand for our products, populations growing, economies, standards of living, while at the same time we need to address the risk associated with climate change, greenhouse-gas emissions," he told reporters at a conference in Calgary.

Story continues below advertisement

"For any province … to compete, I think you have to address both of those. How can we invest [and] continue to develop supplies but do it in a way compatible with the aspirations of society?"

Imperial Oil, which is controlled by Exxon Mobil Corp., is giving the NDP time to find its footing before speaking with Ms. Notley.

"Everybody's trying to find their offices and get appointed. I'm fairly patient on that," Mr. Kruger said. "There will be a time, and I look forward to that."

Canadian Natural Resources (CNQ)

Close: $38.24, up 30¢

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter