Duane Bratt Department of Policy Studies Mount Royal College Calgary, Alberta

1. Canadian energy and the 2008 US ElectionsThe Future of the Canadian Natural Gas IndustryCalgary (November 12, 2008) Duane Bratt Department of Policy Studies Mount Royal College Calgary, Alberta

2. Outline • Results of the 2008 US Election • Energy Policies • Obama Campaign • Congress • California • Natural Gas Exports

3. Presidency • Electoral College Votes • Obama 364 • McCain 162 • Leading in Missouri (11 votes) • Popular Vote • Obama 52.5% (64,237,339 votes) • McCain 46.2% (56,626,131 votes) • http://elections.nytimes.com/2008/results/president/map.html

4. Senate • 57 Democrats • 40 Republicans • 3 undecided • Minnesota (leaning Rep) • Alaska (leaning Rep) • Georgia (leaning Rep) • All Committees will have a Dem Chair • All Committees will have a Dem Majority.

5. House of Representatives • 254 Democrats • 173 Republicans • 8 Undecided • All Committees will have a Dem Chair • All Committees will have a Dem Majority.

6. Mandate for Change • Obama will have a wide mandate for change • Large electoral collage total • 6 point victory – 7.5 million voters • Most of the battleground states • Ohio, Pennsylvania, Florida • A number of Rep states • Nevada, Colorado, New Mexico, Indiana, North Carolina, Virginia • All of the large states (ex Texas)

7. Democratic Unified Government • Strengths • Democrats will have a wide mandate for change • +7 Senate (or more) • +21 House (or more) • Honeymoon period • Oil and gas sector donates 80% of its money to the Republicans • Environmentalists are a core constituency of the Democrats

8. Democratic Unified Government • Weaknesses • Weak party discipline • Independent powerbases • Very high incumbency rates • Blue Dog Democrats • There have been unified govts in the past • 1977-1980 Carter and Democrats • 1993-94 Clinton and Democrats • 2003-2006 Bush and Republicans • Lacks the 60-seats in the Senate • Other challenges • Iraq/Afghanistan • Financial Crisis • Health Care

9. Obama’s Energy Campaign “New Energy for America” Themes • Greater Efficiencies • New Green Energy Technologies • Greater govt participation

10. Obama’s Energy Campaign “New Energy for America” Specific Policies • Cap and Trade Program • 100% of all emissions • Reduce emissions 80% below 1990 levels by 2050 • Use $15 Billion a year ($150 B over 10 years) from cap and trade for investment in green energy technology • Clean coal (carbon capture and storage) • Renewables (wind, solar, geothermal, etc) • Re-engage with UNFCC

11. Obama’s Energy Campaign “New Energy for America” Specific Policies • Energy Efficiency Programs • Govt buildings, low-income housing, and all new buildings would require to be carbon neutral (2030) • Electricity Grid • Vehicles • More domestic drilling • Existing oil leases and the Outer Continental Shelf • But not Arctic Wilderness

12. Short Term Strategy • Emergency Energy Rebate • $500 an individual/$1000 for a married couple • Windfall Profits Tax on “big oil” • Release oil from Strategic Petroleum Reserve to Cut Prices

13. Analysis • With drop in oil prices and gas prices, it is likely that many of these items will be scrapped. October 22, 2008 April 22, 2008

15. Exit Polling Data

16. Exit Polling Data • Energy was a distant 5th on important issues. • No questions on Climate Change.

17. Energy Independence & Security Act (2007) • Increase vehicle fuel efficiency • 35 miles per gallon • Investments in domestic biofuels • More efficient appliances • Lightbulbs, refrigerators, dishwashers, etc • R & D in reducing GHGs • Carbon capture and storage • Clean energy development • Green Collar Jobs • Training Americans for green energy economy

18. Energy Independence & Security Act (2007) • Section 526 • Bars US federal agencies (military, post office, etc) from buying imported fuel in which the GHG emissions are “less than or equal to such emissions from the equivalent conventional fuel produced from conventional petroleum sources.”

19. Canada and the Energy Independence and Security Act (2007) • Jeff Kupfer, Acting Deputy Sec of Energy • Canadians shouldn’t be concerned • Largest source of imported crude oil • Is a “friendly source” of energy, unlike Venezuela and the Middle East • Canada is not foreign oil • Section 526 could violate “national treatment” provisions of NAFTA and WTO • An amendment that tried to ban all “dirty oil” – aimed at the Oil Sands - was defeated in Congress (Sept 2008) • Henry Waxman, prominent Member of the House Energy Committee • Privately assured Canadian oilmen that this provision would not apply to Canada

20. Senate Legislative Agenda • Environment: A bill to require States and metropolitan planning organizations to develop transportation greenhouse gas reduction plans to reduce greenhouse gas emissions from the transportation sector • Sponsor Barbara Boxer (D-CA) and Tom Carper (D-DE)

21. California Initiatives • Two key renewable energy initiatives were defeated • Proposition 7 • RENEWABLE ENERGY GENERATION • 64.9% No • Proposition 10 • ALTERNATIVE FUEL VEHICLES AND RENEWABLE ENERGY • 59.9% No

22. Other State Initiatives • Missouri would require investor-owned utilities to produce or buy 15% of their electricity from renewable resources by 2020. • 66% Yes • Colorado would increase taxes paid by the oil and gas industry and distribute 10% of the new revenue to programs promoting energy efficiency and renewable sources. • 58.5% NO

23. California • California has a higher population and GDP than Canada • For decades, California has often set the environmental regulations in the US • This is largely bipartisan • Governor Schwarzenegger (Rep) has transformed himself into the Green Governor

25. California • California is between 9-16 largest GHG emitter in the world • Its per capita emissions are roughly 5 times that of China, 12 times that of India, but only 2/3 of the US average • Energy Action Plan • Global Warming Solutions Act (2006) • 1990 GHGs levels by 2020 • A 11% reduction from current emissions levels

26. California Other Policy Goals • Tougher emission standards on new automobiles • This was opposed by the EPA. • An Obama govt will drop that opposition. • Reducing natural gas imports from Canada • Western Climate Initiative

27. Western Climate Initiative • Designing a “cap and trade” system for the West. • Partners: • US: Arizona, California, Montana, New Mexico, Oregon, Washington, Utah • Canada: BC, Manitoba, Ontario, Quebec • Observers: • Alaska, Idaho, Colorado, Nevada, Kansas, Wyoming • Saskatchewan, and northern Mexican border states • Notable Absences: • Alberta and Texas

28. North American Cap and Trade System? • WCI already exists and is growing • Obama (and McCain) campaigned on Cap and Trade • Harper govt is approaching Obama about a North American Climate Change Pact. • Cap and Trade System?

29. Canadian Natural Gas Exports • Natural gas exports are a major driver of the Alberta economy • Royalties between 2000-2007 were $42.6 billion. • NAFTA has provided secure access to the American market for Canadian natural gas.

30. Canadian Natural Gas Exports • Obama promised to negotiate NAFTA. • Labour and Environmental standards • This will not happen. • Campaigns vs Governing • Primary Battle with Hilary Clinton • US Energy requirements will prevent it from reopening NAFTA • NAFTA is code for China and India