Oxford Energy Podcast – Canada’s Carbon Tax Hike and Strategic Implications for Oil & Gas Firms
The Canadian oil and gas industry has faced an increasing number of headwinds since the start of the last decade. Stagnant domestic demand coupled with limited gas export capacity and a glut of North American production has resulted in low prices and reduced profitability for natural gas firms. For oilsands operators, ongoing commodity price sluggishness has been exacerbated by tight takeaway space for Canadian crude, increased divestment by foreign firms and limited capital investment. Consequently, the carbon tax hike appears to compound these risks and cast doubt on the long-term viability of the industry as a key source of non-OPEC oil and gas supply. In this podcast, David Ledesma talks to Nnaziri Ihejirika and discusses his new OIES insight on strategic options for Canadian oil and gas firms, particularly the potential to deploy breakthrough decarbonization technologies and identify new opportunities in the business value chain. While the increased tax may cause significant strain on the ability of some firms to generate healthy cash flows in the near-term, it is likely to force the enabling environment required for new technologies to be deployed at scale. Done well, this can set the stage for a new cycle of innovation, investment and long-term prosperity.