With the election of Donald Trump for president of the United States comes both concerns and optimism about how his administration could affect the Alberta economy, namely energy and innovation in oil and gas. President-Elect Trump is estimated to have the greatest impact on oil and gas pipelines, and as a consequence, Alberta construction, but the anticipated effects are conflicting largely due to his campaigned stance on NAFTA, the EPA, and the Keystone XL project.
What appears to be a big win for Alberta is Trump’s support of midstream oil and gas. Forbes says, “Midstream businesses are those that move oil and gas from the site of production to processing plants, storage facilities, and end customers. Midstream consists largely of the oil and gas pipelines that crisscross underneath North America,” meaning that Trump is good for Alberta’s construction industry as well as oil and gas. Given that Trump himself is invested in and advised by the oil and gas industry, his presidency will more than likely open doors for pipeline approvals across the US and Canada, such as a the Keystone XL project which will transport over 800,000 barrels of oil from Alberta to the US per day. However, his positions on climate change and the North American Free Trade Agreement (NAFTA) present potential conflicts for Alberta’s oil and gas economy.
First, Trump has said that he will cancel the Paris climate agreement and has no plans to consider a price on carbon or to lower methane emissions, which is in conflict with the Canadian government’s current climate policies and may put Alberta producers at a disadvantage over US competitors, despite an approval of the Keystone XL project. On the other hand, some think that Trump’s lax stance on climate change will ease some of the pressure on Alberta’s oil and gas industry.
Second, Trump decries NAFTA, calling it “a disaster” and threatening to cancel it, in addition to opposing the Trans-Pacific Partnership (TPP); changes to NAFTA and the TPP may negatively impact Alberta’s economy since the US is “Alberta’s largest trading partner, with annual merchandising exports totaling $77.5 billion over the past five years.” However, Canada is, of course, willing to talk about a renegotiation.
Ultimately, Trump and his administration will certainly make their decisions (on climate, trade, and oil and gas) so that the result benefits the US. In the meantime, Graham Hicks at the Edmonton Sun is positive about Trump’s impact on the Edmonton construction and oil and gas industries, arguing that “Trump, as a businessman, knows Canadian business is hugely invested in the USA. Our pipeline companies, utilities, banks, real estate developers, engineering and construction firms have a greater presence in the USA than ever before. The USA needs our investments, Our economies are as intertwined as any two countries in the world.”