Study links acceptance, energy marketing

Social acceptance is central to marketing Canadian energy, asserts new policy recommendations from the C.D. Howe Institute, Toronto.

“Few in the Canadian energy sector–as well as the many Canadians who depend on it–are sad to see 2015 move into the history books,” notes study author Benjamin Dachis. “In 2016, the energy sector will be nervously watching government policies.”

Canadian energy politics changed course in 2015 when the Liberal Party dominated national elections and the New Democratic Party ousted more-conservative leadership in Alberta. An early initiative of the new government in Alberta was a review of resource royalties.

Dachis organized his policy recommendations into four themes. From a study summary, they are:

Global competitiveness of Canada's energy industry. The author said competitiveness of Canadian electricity and oil and gas will be “top of mind for most stakeholders” in the industry. He said Alberta’s royalty review, which is to conclude soon, “should recommend that the province adopt the international best practice of cash-flow tax design.”

Social acceptance to enable market access for Canadian energy. “Having a robust regulatory approval system is critical for governments—and the energy sector–to ensure that Canada’s energy products get to world markets safely and in environmentally friendly, socially accepted ways,” Dachis said. On pipeline review, the federal government “should focus on minor changes, not major reforms, and should be especially wary of changing the review process for pipelines already under way.” Because social acceptance “entails more than the regulatory process,” he added, it “requires governments to take the lead in areas outside the remit of regulators.”

Collaborative governance. Carbon pricing probably will be the key collaborative governance issue in 2016, Dachis said. “The new federal government will need to tackle a provincial policy patchwork on climate issues. Energy producers and transportation companies will also need to look at their own practices to improve their chances of getting project support. Both federal and provincial regulators will need to examine how their securities and competition policies will affect potential mergers in the energy sector.”

Innovation. “Rather than focus innovation and diversification policies on what is physically produced in Canada and its provinces,” Dachis said, “governments should focus on how to enable Canadian companies to become global leaders in the specific technologies they are best at applying.”

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