Layaway Plan
For Carney’s Pacific Coast pipeline, it’s buy now and pay later on climate.
“Canada was built on dead beavers.” – Margaret Atwood
The ground is shifting again in Canadian energy, and so we return to one of the most audacious calls we’ve made in the five years of this publication’s existence. We write, of course, of the unlikeliest hydrocarbon hero of them all—Canadian Prime Minister Mark Carney and his mission to unstick Alberta’s energy.
Longtime subscribers to Doomberg will recall how we parlayed our reading of Canadian propaganda and its impact on that country’s politics into predicting the selection of Carney for the top job before it seemed conceivable to most. In a follow-up piece written last April called “The Fix Is In,” we shared what our mental model revealed about what would likely come next:
“Here’s how the play is likely to unfold in the weeks and months ahead: Carney will be elected Prime Minister on April 28 by a comfortable margin; [Alberta Premier Danielle] Smith will trigger a constitutional crisis, providing cover for Carney to strike a grand bargain that finally resolves longstanding tensions between the provinces and Ottawa; and large infrastructure permitting reform will fall into place. Protests against these developments will be surprisingly muted, and those who do take to the streets will be largely ignored by the media. The entire effort will be wrapped in a thicket of patriotism, with [US President Donald] Trump portrayed as a threat even greater than climate change itself. References to carbon emissions will slowly fade.”
Carney did win the election, albeit by a less comfortable margin than we anticipated. The Alberta separatism movement suddenly enjoys far more print space in Canada’s big newspapers, and enough signatures have been gathered in the province to hold an independence vote. Carney signed a memorandum of understanding (MOU) with Alberta’s leaders, committing himself to the task of getting large pipeline projects done. The Canadian Parliament passed the Building Canada Act, including the fast-tracking of projects deemed to be in the national interest. While there certainly have been objections to all of this by those on the progressive environmental left, their efficacy has been rather blunted, at least by historical standards. Finally, Orangemanbad has dutifully played his part, providing an endless assembly line of red meat for a notoriously anti-American press corps.
As far as prognostications go, we could be forgiven for taking our hockey puck home and calling it a good skate, but the careful reader will notice that the slippery issue of carbon emissions was conspicuously absent from our victory lap. News out of Canada on Friday, however, not only reveals how the final pieces of the puzzle will fall into place, but also lays bare the raw power behind the public-facing political leadership. The impulse to count carbons boomerangs back onto those opposed to hydrocarbon extraction in a way that not only ensures immortal midstream assets get built, but also lets bankers catch a valuable vig along the way — the ultimate chef’s kiss of cynicism. Let’s head to Calgary to indulge in the latest details.