Canada’s energy industry will be holding its breath until next spring as it awaits Alberta’s next premier. On the heels of a narrow loss in a party confidence vote, Jason Kenney announced on May 18 that he plans to step down once a successor is chosen.
Kevin Krausert is CEO and co-founder of Avatar Innovations, a Calgary-based venture capital firm and startup accelerator that pairs entrepreneurs with companies in Canada’s energy patch. He says Alberta’s new premier will take office at a critical juncture for the province’s energy future, including government decisions related to carbon capture and storage.
“If there is a lot of noise from pockets of leadership races, I’d say that the oil and gas industry is going to be frustrated with that because it will bring a new level of uncertainty when we’re just about to get going on these carbon capture projects, and on these biofuel and hydrogen projects.”
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Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
JEFF LAGERQUIST: How much uncertainty has Kennedy's departure injected? I guess the important question to ask here is how influential is an Alberta premier when it comes to the fortunes of the energy sector, particularly oil and gas, where prices are set internationally?
KEVIN KRAUSERT: You know, I'd say that the premier, any premier has the opportunity of really being the primary champion for the economic engine of not just Alberta, but of Canada. And so being able to align the messaging and the championing of that sector in line with the aspirations of the rest of Canada is what's needed. And I'm hopeful the next premier recognizes that we're going to need some stability.
There are conversations around pore space dynamics. We have a very capable energy minister in this province who's staying in her position to manage that through, during this period of uncertainty from the premier. So, you know, I'd say from a nuts and bolts government perspective, the government operates well. The bureaucracy works well. And we have some capable ministers on the energy file.
I think the question is, where does the campaign go, both the Conservative Party leadership race as well as the general election that will be happening in about a year? And if we have a suite of candidates who run against inflation, which is essentially they're going to want to run against, they're going to blame it on three possible things. They're going to blame it on the energy transition. They're going to either blame it on oil companies, or they're going to just blame it on government generally.
And so I would encourage any of the leaders running to be responsible, to recognize that the way we win this race is by investing in the technologies like carbon capture and hydrogen and biofuels that are going to make us competitive in the future. And a lot of those are predicated on the work that has been done over the last several years to make the investment structures work. And if there's a lot of noise from the pockets of leadership races, I'd say that the oil and gas industry is going to be struggling, frustrated with that, because it will bring a new level of uncertainty, when we're just about to get going on these carbon capture projects and on these biofuel projects and these hydrogen projects.
So the leaders that I think the industry would support would be ones who would recognize the importance of that investment and the importance of smart public policy to promote an investment climate we can get these projects done.