Only hours after Donald Trump's stunning and historic U.S. presidential victory, a political pipeline already appears to be opening wide for an expansion of oil, gas, and coal.
While environmental activists and scientists have warned that the election of a climate-denying president in the U.S. would stall efforts to prevent dangerous global warming, political observers say the fossil fuel industry should be positively "jumping for joy."
Billionaire businessman Trump, a showman without any political or military experience, stunned most of the planet with his early-morning victory at the polls on Wednesday, and will bring a powerful pro-industry package with him to the White House that includes support for the controversial Keystone XL pipeline, a pledge to withdraw from the Paris climate agreements, and the belief that climate change is concept created by the Chinese to disrupt American manufacturing markets.
Trump will curb oil industry enthusiasm for climate action, says Heartland Institute
This kind of platform, said Joseph Bast, president and CEO of the non-profit Heartland Institute, a right-leaning research centre in Illinois, will allow oil and gas stakeholders to secure their place in a world of mounting pressure to move towards fossil-fuel free solutions. He added that smaller businesses in particular "should be jumping for joy" since he said they could have been crippled by federal legislation penalizing emissions-heavy industry operations.
"I believe the big companies will dial back their enthusiasm on climate action absolutely," he told National Observer, noting that BP in particular has recently come out supporting the majority of President Obama's new climate policies. "The Republican Party platform was, in my opinion, very pro-energy, pro-environment, and pro-jobs."
The companies that Bast champions are also the same ones that are producing some of the heat-trapping pollution that is warming the atmosphere.
"If Donald Trump actually follows through with it and the Republicans follow through with what they say, this should be a great time for energy and natural gas producers, coal producers and consumers."
Breathing new life into Keystone XL
According to Scientific American, President-elect Trump has already appointed one of the best-known climate skeptics to lead his U.S. EPA (Environmental Protection Agency) transition team: Myron Ebell, director for the Center for Energy and Environment at the conservative Competitive Enterprise Institute, and a well-known "oil-industry mouthpiece."
It also gives Canadian oil and gas advocates an opportunity to promote their cause. TransCanada Corp., for example, has said it remains "fully committed" to building the controversial Keystone XL pipeline, which despite receiving support from Prime Minister Justin Trudeau, was rejected by U.S. President Barrack Obama in November 2015.
Republican Trump has said he would "absolutely approve" the 1,900-kilometre Alberta to Nebraska crude oil pipeline, but hasn't addressed TransCanada's outstanding request for US$15 billion in damages after Obama's rejection. Trump has also said he wants the government to get a greater cut of the profits, but hasn't explained what that means.
"We are evaluating ways to engage the new administration on the benefits, the jobs and the tax revenues this project brings to the table," said TransCanada spokesman Mark Cooper on Wednesday. "Building the pipeline means 9,000 construction jobs — 42,000 direct and spin-off jobs overall. KXL would also mean tens of millions of dollars in annual property taxes to counties along the route, and a more than $3 billion boost to the U.S. GDP."
TransCanada shares finished the day up about two per cent on the Toronto Stock Exchange, closing at $59.96 per share on the day after Trump's victory.
The Canadian Association of Petroleum Producers (CAPP) also told National Observer that it supports construction of the Keystone XL pipeline in the wake of changes to the White House, but would not comment on how Trump's big win affects the industry at large.
"The United States is our industry’s largest customer, but also our largest competitor and we will continue to advance the priorities that are important to Canadian producers," said a statement from the industry lobby group on Wednesday. "Our challenge is getting that energy to the world and the only way we can do that is through more energy infrastructure, such as pipelines, which will enable us to deliver oil and natural gas to more customers at home and abroad.”
But the premier of Alberta, Canada's largest oil-producing province, said that securing approval for Keystone XL pipeline wouldn't provide a good long-term strategy for the Canadian economy, because U.S. producers, as the Canadian lobby group pointed out, are expanding their own output and competing with Canadian companies.
"Obviously, we know though, that the U.S. has become less of a market than it has been a competitor," Notley said at a news conference in Edmonton.
This would mean that Notley's focus remains on promoting other pipeline projects that provide access to the coasts, such as Kinder Morgan's Trans Mountain expansion project to the west coast and TransCanada's Energy East pipeline to the Atlantic coast.
"Simply looking at market access as being a one pipeline, Keystone-type event where we lose agency over the decision making on it is probably not necessarily a good long term strategy for our economic development here in Canada," Notley said. "So it doesn”t mean that Keystone isn’t something that the industry might want to see happen and that we won't be sitting down and talking to them about what that would look like. But it also is the case that the need to have a national or Canadian pipeline to tidewater remains."
Faster industry approval south of the border
Isaac Orr, research fellow for energy and environmental policy at the Heartland Institute, said it wouldn't just be Keystone XL that stands a better chance under the Trump administration, but the highly-contested Dakota Access Pipeline as well. In many cases, he said Obama has been the only person in between approval and rejection of major energy projects, and a Republican president would show far more leniency.
"Federal leases are probably going to be approved at a lot greater rate," he explained. "I think it's going to be a lot more efficient and more offshore permits will be granted. It will be interesting to see how this plays out — I also think he's going to rescind the moratorium on coal mining."
Essentially, he said, Trump will give exploration and production companies the freedom to go where reserves are vast, and won't worry too much about the impact on climate change.
Oil-rich Alberta proceeds with climate plan, despite Trump's victory
But while business-friendly groups say America is backing away from tackling climate change, Notley said Alberta will proceed with an aggressive climate change plan that has received praise from both industry and environmental groups. She noted that the plan was designed to encourage industry to take action to reduce carbon pollution, without causing them to lose business or jobs to neighbouring jurisdictions that have failed to act.
Even under President Obama, she said that Alberta was acting while knowing that the U.S. was unable to get any climate legislation approved by its legislators.
“We’re actually ahead of the game now, here in Alberta, relative to where we were a year ago, when we first announced our climate leadership plan, because of course, the federal government is talking (about) — within three or four years — bringing other jurisdictions in Canada closer to where Alberta is at," Notley said. "So it actually would improve the whole competitiveness issue.
"So we’re not terribly concerned about that, quite frankly, and as I’ve said before, there are strong compelling reasons for moving forward on our climate leadership plan and decisions on voters south of the border are not things that should factor into that.”
But there was concern in Quebec, where opposition Parti Québécois Leader Jean-François Lisée said Trump's election would wipe out decades of progress in global action to fight climate change.
"Mr. Trump does not believe in global warming. He does not believe in the fact that the human race is responsible for it and will promote coal and gas and oil and I think it's a major setback for the decades of work we have done as a species in trying to get the U.S. on board, and China on board and India on board, so this is very disheartening," said Lisée at a news conference at the National Assembly in Quebec City.
In the meantime, the Heartland Institute's Bast said he doubted that international pressure on the U.S. to take on a climate leadership role would have any impact on Trump's governance over the oil and gas industry. He predicted Trump would withdraw from an international climate change treaty signed last year in Paris to keep global warming below two degrees Celsius this century.
“I think Donald Trump has shown that he’s pretty much immune to that kind of pressure from Liberal advocates, environmental advocates and European governments," said Bast. "This is a guy who very clearly doesn’t believe the science is settled. He very clearly believes this is just a left-wing, bigger government, higher-energy cost kind of play, and that it's all bound up with political correctness."
Oil prices rise after U.S. election
Oil prices around the world have already begun to rise in the hours since the election, adding weight to theories that Trump's election could have serious global consequences for climate action. On Wednesday morning, Canada's Trudeau vowed to work "very closely" with the new president on trade, investment, international security and other issues, prompting outrage from environmentalists across the country who noticed that the prime minister's statement failed to mention climate change.
“Justin Trudeau needs to stand up to climate deniers, not with them," said Cameron Fenton, Canadian strategy and communications manager for 350.org in a press statement. "With a climate denier as the U.S. President-Elect, Justin Trudeau needs to take bolder climate action than ever before, and if Trudeau approves a pipeline to ship tar sands to the United States, be it Kinder Morgan or Keystone XL, he’ll be complicit in Trump’s climate denial."
This marks the first time in a while that environmental activists have had to advocate against Keystone XL, a pipeline that they believed was dead and buried, following its rejection by Obama in 2015.
"We have a government that has already demonstrated that climate change is a priority for them," added Steve Kux, climate and clean energy spokesperson for the David Suzuki Foundation. "When a leader of a G7 nation comes into power, they’re faced with a lot of realities, they meet with a lot of experts on issues.
"We remain hopeful that there will be an opportunity to present the facts to the new president on the part of ENGOs in the United States, professionals and climate scientist, and he may come to an informed opinion about it before enacting any policy on it.”
The comments come just as David MacNaughton, Canada's ambassador to Washington, said the country is "prepared to talk" about opening up the North American Free Trade Agreement (NAFTA) to negotiate improvements. During his election campaign, Trump said NAFTA was "the worst trade deal" in history and he intended to change it in favour of American workers.
Environment and Climate Change Canada would not comment on how a Trump presidency could impact climate action around the world and instead sent a link to Trudeau's early morning statement congratulating Trump.
— with files from Mike De Souza, Canadian Press