Canada’s oil industry seeks ‘actions not rhetoric’ from new federal oil minister

Canada's oil and gas industry is hoping that the appointment of a former investment banker as the new federal energy and natural resources minister will lead to addressing multiple headwinds that have come in the way of attracting investments and opening up new export markets in Europe and Asia.

Tim Hodgson – a former CEO of Goldman Sachs Canada from 2010 to 2015 – was appointed to the position as part of a new federal government cabinet headed by Prime Minister Mark Carney that was sworn in early May 13. The new cabinet came in the wake of April elections which resulted in the Liberal Party winning 170 seats, falling short of a 172-seat majority in the House of Commons.

The previous Liberal Party government under former Prime Minister Justin Trudeau had adopted an anti-energy stance that resulted in planned crude oil export pipelines being cancelled and muted investments in growth projects, as well as alienating the two Western provinces of Alberta and Saskatchewan.

"The swearing in of a new cabinet in Ottawa signals the start of a new chapter that will be judged by action and results, not rhetoric," President of the Canadian Association of Energy Contractors Mark Scholz said in a statement. "During the federal election campaign, Prime Minister Carney promised a new tone and direction for Canada's natural resource development."

The debate is no longer whether to develop the natural resources, but how swiftly and boldly the federal government can advance, Scholz said, adding the question is whether this new government is prepared to act with the urgency and ambition this moment demands.

The CAOEC's top priorities are to expand oil and gas infrastructure projects, eliminate emissions cap and fast-tracking LNG projects, he said.

Federal legislation, and particularly Bill 69, has been a bone of contention between the federal and provincial governments, with the blame being put on Ottawa for the long-delayed approval process.

Focus on energy corridors

"Our new government will build bridges with the provinces and our focus will be on the economy as we start an industrial transformation," Carney told reporters after the swearing in ceremony.

The appointment of Hodgson is the first "real and tangible" demonstration of what Prime Minister Carney wants to do on the energy and natural resources front, Heather Exner-Pirot, director of natural resources, energy and environment program with MacDonald Laurier Institute told Platts. "The industry is cautiously optimistic today."

With growing support for Western separatism in Alberta and Saskatchewan, there is room for bringing about changes in the federal government stance, such as removing the emissions cap and the clean electricity regulations, Exner-Pirot said.

"As long as they are in place it will be deterring investment," she said. "For pipelines, the investment landscape in Canada is weak and there is a need for the federal government to either declare a corridor in national interest or commit to having a smoother regulatory process with support for indigenous communities."

Developers will need guarantees before taking it to their board of directors, Exner-Pirot said.

"I'm going to take the prime minister in Canada at his word that he's committed to building energy infrastructure in Canada, [and] becoming a conventional and non-conventional energy superpower," Enbridge CEO Greg Ebel said on an earnings call May 9. "I'm excited. It's just got to turn into reality. I mean, we're ready to rock."

Alberta is keen to work with the federal government to reset its relationship and repair the damage to the province's economy that has been caused by Ottawa's last 10 years of anti-resource legislation and policies, Premier Danielle Smith said in a statement.

"During my first meeting with the Prime Minister just over a week ago, we spoke at length about the policies and legislation that are holding back Alberta's economy and he made it clear that he intended to rapidly advance national building projects in the coming weeks and months," Smith said.

Meanwhile, Alberta's oil production in March was the highest ever for that month, as was the case for January and February, ATB Financial said in its latest report early May.

Oil production averaged 4.19 million b/d in March, up from 4.04 million b/d during the same month last year and representing a 3.6% growth, it said, noting that oil sands output, which accounted for 84% of total oil production in March, was up by 3.5% compared to March 2024 while conventional (including condensate) production climbed by 4.4%.

On the natural gas front, a regulatory decision is awaited for the planned 12 million mt/year Ksi Lisims LNG project in coastal British Columbia.

"This project is in the queue for the Impact Assessment Act and all eyes will be for an early approval of that facility," Exner-Pirot said.