Canada
Jason Kenney, a career politician and leader of the United Conservative Party, was elected premier of Alberta, Canada
  • The home province of Canada’s tar sands elected a combative, conservative leader this week who came out swinging on the side of the country’s struggling oil industry.
  • Instead, the fate of the tar sands industry, also known as oil sands, may rest more in the hands of Prime Minister Justin Trudeau.
  • As governments try meet the goals of the Paris climate agreement, advocacy campaigns and investors have been increasing pressure on oil companies.

The home province of Canada’s tar sands elected a combative, conservative leader this week who came out swinging on the side of the country’s struggling oil industry.

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Jason Kenney promised to cancel Alberta’s carbon tax, lift a cap on greenhouse gas emissions from the tar sands and create a “war room” to combat the oil industry’s opponents.

But while his victory Tuesday threw more uncertainty into Canada’s efforts to cut greenhouse gas emissions, there may be little Kenney can do on his own to reverse what has been a steady decline in fortunes for Alberta’s tar sands over the past few years.

Instead, the fate of the tar sands industry, also known as oil sands, may rest more in the hands of Prime Minister Justin Trudeau and the courts hearing legal challenges to proposed new oil pipelines—and, ultimately, with international energy markets and the macroeconomic forces that shape them.

Major oil companies have been asking themselves the same question, and increasingly, they’ve been saying it won’t be the tar sands.

New tar sands mining projects tend to be big and expensive, and they can take years or even decades to provide meaningful returns on investment.

While details vary, they also tend to be among the most carbon-intensive sources of oil, raising the risk that future climate change policies could further increase their costs or even shut them down.

As governments try meet the goals of the Paris climate agreement, advocacy campaigns and investors have been increasing pressure on oil companies to explain what a world of dwindling oil demand would mean for their balance sheets.

And, increasingly, oil companies have been saying that, even if they’re not turning away from their core product, they are focusing on the lower-cost, most efficient sources of oil.

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