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Editorial: In oil we trust

Hebron oil rig was towed from Bull Arm to teh Grand Banks this past June.
Hebron oil rig being towed from Bull Arm to the Grand Banks. — SaltWire Network file photo

It’s a strange situation to be in.

Norway was always the oil giant that successive provincial governments wanted us to be, to the point that we even named a St. John’s street, Stavanger Drive, after a Norwegian oil hub.

Now, though, Norway is taking its oil profits out of oil and gas stocks, $35 billion worth of the country’s US$1 trillion sovereign wealth fund, with the fund’s managers saying, “We conclude that the vulnerability of government wealth due to a permanent drop in oil and gas prices will be reduced if the fund is not invested in oil and gas stocks, and advise removing these stocks from the fund’s benchmark index.”

Look to our provincial government to continue to be tremendously bullish on the oil and gas industry, despite the other costs.

And this province? Well, our government is doubling down, literally, saying it wants to see a doubling in oil and gas production by 2030, with 100 new exploratory wells and thousands employed. The government has chosen its direction pretty darned clearly.

“There is still a thirst for oil and gas throughout the world,” Premier Dwight Ball said at the release of an oil and gas industry planning document on Monday. “The transition from where we are today with oil and gas to green energy will take quite some time. So, while that transition is occurring and taking place, the world will still need oil and gas.”

(There’s not much the provincial government can actually do to force such development. It can make it easier to develop projects by finding ways to lighten the regulatory load, but investments depend on the cold hard number of production costs and the price of oil and gas — the same price of oil and gas that Norway feels has too much risk.)

The news came on the same day that Environment Canada released new data on greenhouse gas emissions, showing that this province’s emissions are continuing to climb; we’re now 15 per cent above the levels the province was emitting in 1990, though we committed to be 20 per cent below 1990 levels by 2020. And oil and gas development is a big contributor, let alone the greenhouse gases created when oil and gas is burned.

In some ways, it looks like we’re bucking the trend, and there really is only one explanation: money.

We need it, and there are precious few industries that can supply the kind of cash we need in the timeframe that we need it in. Look to our provincial government to continue to be tremendously bullish on the oil and gas industry, despite the other costs.

The only thing that we can truly hope? That there’s a more reasoned approach to environmental and economic review of oilfield projects, and that control of the review process never devolves to the provincial government or provincial agencies.

We need industry oversight that doesn’t suffer from a clear conflict of interest.

The beggars shouldn’t be the choosers.

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