|Chairman of the Board of USA Inc.|
President-elect Trump has started selecting his “cabinet”, and the implications for Canada’s economy are significant:
In a move that might be a bit more predictable than the rest, given Trump’s public statements, the memo places a priority on building more pipelines. Just a few days ago, Trump said that he would make a decision “fairly soon” on reviving the Keystone XL and Dakota Access Pipelines. His administration would streamline permitting, where it can, on new pipeline projects.
To enact this agenda, Trump has selected the most pro-industry cabinet out of any administration in recent memory: Tillerson at State; Oklahoma Attorney General Scott Pruitt for EPA; former Texas Governor at the Department of Energy; and the handful of candidates for the all-important Interior Department all support more development.
Trump is very clear on his vision for the USA, having run a campaign that could only have been run by a candidate who was a businessman first, and politician a distant second. Pundits in the USA have been far slower than those in Europe and Putin in Russia to understand that American will in 2017 have a businessman as president – the first for a very long time.
Trump campaigned by laying out the broad directions of his “company”, USA Inc. He refused to dive into details, knowing that he would run the presidency as the Executive Chairman of the Board, with a lot of authority delegated to his hand-picked Cabinet.
His Cabinet, staffed with more business people than most cabinets in recent years, will be tasked with exercising delegated powers, to make Trump’s broad visions happen.
And that is where the number of energy industry Cabinet ministers, and Trump’s mission statements, give a clue to what lies in wait for Canada.
First, these are men who will take whatever steps they deem necessary to put America First when it comes to energy production. They will remove anything that prevents the USA from producing as much oil and gas as possible from American soil, so as to make the USA energy-independent.
The leaked memo makes this clear. Within four years, fossil fuels will be produced in the US in quantities that most people today would think impossible. Shale oil and gas exploration and production will boom.
Conventional oil and gas exploration and production will boom.
And pipelines to export this expected bonanza will be pushed, and be built in surprising volume and speed.
And here there is danger for Canada. Our heavy oil production is expensive and less desirable that shale oil and gas or conventional oil and gas is, in the eyes of foreign buyers.
Our speed in approving and building pipelines has been slowed substantially by the government’s ineptitude (under Harper – the jury is out on the Trudeau government), and the industry’s unwillingness to cut meaningful deals with First Nations.
The OPEC cartel has learned a lesson from Saudi Arabia’s attempt to bankrupt the shale producers in the US, and hurt Iran: they have buckled under and will spend the next four years trying to retain market share while pushing the price of oil as high as they can. This will make it even easier for new American oil and gas to be found and produced and marketed to eager foreign buyers.
Within a short period, the chances are very good that the firm grip on the oil and gas industry that the Middle East had for decades, will be loosened, with a result that upheavals there will not cause strategic problems to the US, and so will not require US expenditure of cash and military might to protect its energy supply.
Canada will have to compete with a bustling, America-first energy giant, intent on furthering American jobs and wealth rather than multilateral cooperation.
Is Canada aware of the danger facing it? And able to get its own act together so as to compete on a playing field that will be dramatically lowered to favour American interests?
There is no sign to date – since Trump’s election – that this will happen.