Green Dreams Hurting Canada

Encana is only the latest example of the exodus of capital since 2015.
Encana is only the latest example of the exodus of capital since 2015.

Encana’s announcement last week that it was acquiring Texas-based Newfield Exploration may be good news for the Calgary-based company, but it is not good news for Canada. It is the most recent chapter in an unfolding story of capital flight from the Canadian energy sector. First the big internationals, and now Canadian-based firms like Encana, are moving their operations and/or capital budgets out of Canada and relocating their money to the U.S. and elsewhere. And it’s no mystery why. Thanks to government policies adopted by the governments of Prime Minister Justin Trudeau and Alberta premier Rachel Notley since their respective elections in 2015, Canada has become a less and less competitive place to invest and do business.

EnCana’s $7.7-billion deal for Newfield’s oil assets is its most recent U.S. acquisition. Encana had already made significant new investments in the U.S. in the Permian and Eagle Ford fields over the past three years. This spring Encana CEO Doug Suttles moved to the company’s Denver office, sparking fears that Encana’s head office — with its 1,000 employees in Calgary — may soon move with him. Encana insists that this will not happen. We’ll see. Half its board of directors are now U.S.-based, and with the Newfield acquisition, 60 per cent of Encana’s production is now in the U.S.

Encana is only the latest example of the exodus of capital since 2015. Initially it was primarily large international companies. In 2016–17, seven international energy companies, including Statoil (Norway), Total (France), Shell (Netherlands-U.K.), Conoco Phillips (U.S.) and Marathon (U.S.), dumped all or most of their Western Canadian assets — over $37 billion in sales.

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kenkulak
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Canada’s energy industry is slowly being shut down, one company at a time. Regardless of their halfhearted public protestations we know the Liberals and NDP are quietly applauding this.

Maurice Strong’s dream is coming true and the people slept.

BTDT
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BTDT

Ya, green dreams are hurting Canada. Inadequate pipeline capacity affects different things negatively. Last week a couple of friends returned from a VERY expensive western Canada VIA Rail holiday. Based on that experience they both said they would never ever take a train trip again. They had no complaints with the accommodations or the food. BUT….here in Canada freight trains take priority over passenger. My friends said they spent countless hours sitting idle on side tracks yielding to seemingly unending freights. At times 2-3 hours. They said the freight included trains pulling long lines of tanker cars. Arriving home they… Read more »