Andrew Scheer: Big Oil's secret weapon

Over a meal of roasted caribou, Andrew Scheer and Rich Kruger ate and talked, heads close together, discussing energy policy. It was the evening of May 15th at the Politics and Pen black tie dinner held in a ballroom of the Fairmont Château Laurier, the swanky landmark hotel in downtown Ottawa – a regal pile on Rideau Street, a stone’s throw from Parliament Hill.

It was no accident Conservative Party leader Scheer and Kruger, a former ExxonMobil executive and current CEO and chairman of Imperial Oil Ltd., were sitting beside one another: 48 hours before the gala got underway – which annually attracts 500 of Canada’s political, business and cultural elite to raise money for writers – Scheer was moved to Kruger’s table. Scheer’s wife Jill, as it turns out, was on the event’s organizing committee (Scheer later told the National Observer he didn't know he would be sitting at Kruger’s table).

The tête-à-tête between Scheer and Kruger was one of many instances this year where the Tory leader and the people who run Canada’s oil industry socialized – and even conspired together. The previous month, Scheer and his campaign manager, Hamish Marshall, holed up in a resort on the outskirts of Calgary with a group of energy sector CEOs and the president of the Canadian Association of Petroleum Producers (CAPP), Big Oil’s most powerful lobby group, to plot the demise of the Trudeau government, among other discussions.

And then in June, Scheer attended a $1,600 per head Tory fundraising event at the Westin Calgary Hotel organized in part by oil and gas executives – where nearly 150 people attended.

Last week, it was revealed that Marshall’s lobbying and political consulting firm, One Persuasion Inc., received four payments totaling more than $15,000 to produce election ads for CAPP, while also doing advertising for the Conservatives. Scheer, meanwhile, is vocal in his ardor for the energy sector. “I will not apologize for standing up for Canada’s oil and gas workers and to defeat the government that is intent on phasing them out,” he declared last spring.

Indeed, says Kevin Taft, a former leader of Alberta’s Liberal Party and author of the 2017 bestselling book, “Oil’s Deep State”, Scheer’s relationship to the oil industry is, “in one word ‘ intimate’. The roots of the relationship go back many years and the industry and Conservatives have merged into the political and economic wings of the same entity, in my view.”

Yet Scheer’s close embrace of Big Oil comes at a critical juncture. Just as the climate crisis is picking up speed, the oil industry is doing its utmost to undermine efforts to curb the burning of fossil fuels. To this end, it’s turning to ever more aggressive tactics to thwart opponents within the political system and environmental movement – including even suing critics in court. Indeed, the new premier of Alberta, Jason Kenney, has threatened to launch lawsuits against critics of the oil sands on behalf of the energy sector. As Steven Shrybman, an Ottawa-based lawyer who’s defended environmental groups, observes: “It has a chilling effect on NGOs and free speech.”

As the oil industry ratchets up efforts to prevent meaningful action on climate change, they seem to have found a willing pawn in Andrew Scheer – someone who’s taken no issue with its new scorched-earth approach.

Conservative's economic plan based on oil and the tar sands

The Tories were not always in bed with the oil industry.

But in 2003, a cluster of right-wing parties, mostly rooted in Western Canada, merged to form the Conservative Party of Canada, with Stephen Harper as its new leader. “Harper’s father once worked for Imperial Oil,” notes Taft. (As a young man, Harper himself worked briefly for the company in its mailroom.)

Harper’s affinity for the oil and gas sector was also rooted in the belief the West had gotten short shrift, economically-speaking, from Ottawa. Alberta’s grievances went back to at least 1980 when Pierre Trudeau introduced the National Energy Program.

Yet Harper had grander ambitions: he dreamed of turning Canada into an energy powerhouse – with the oil sands as its engine. This would have the ancillary effect of tipping the economic balance westward. “(There was) a boom in the oil sands after 2005, which took oil from being an important industry to being the leading export industry, and you had a whole shift in terms of the finance sector started opening up branches in Calgary,” says Keith Stewart, an energy strategist with Greenpeace Canada. “Imperial Oil moved its headquarters from Toronto to Calgary. You have this shift in economic weight to Alberta and you have Stephen Harper pulling this together into his vision of Canada as an energy superpower based in bitumen.”

After he was elected prime minister in 2006, Harper put his plan into motion, turning the federal government into a tool of the energy sector – while letting manufacturing whither on the vine. He fought to get Keystone XL and other pipelines built. In 2012, the government launched an unprecedented assault on Canada’s environmental laws by introducing two omnibus bills that gutted numerous regulations, most notably the Fisheries Act and Canadian Environmental Assessment Act, which were viewed as impediments for building oil infrastructure. As Green Party Leader Elizabeth May remarked at the time: “Stephen Harper canceled and gutted environmental laws brought in by Brian Mulroney. He’s now moved on to destroy environmental laws brought in by Sir John A. MacDonald.”

In fact, Dale Marshall, national climate program manager of Environmental Defence, a Toronto-based environmental organization, says the idea of rewriting the environmental laws through omnibus bills “came from the oil industry.”

In the meantime, the energy sector was building itself a formidable lobbying and public relations machine - one that often has close ties to the Tories.

In a report released this month, Environmental Defence notes that between 2010 and 2018, the oil industry’s lobbyists held 11,000 meetings at the federal level. “That’s four meetings a day every single day of the year for eight years,” says Marshall. CAPP alone has 40 registered lobbyists. And since becoming Tory leader in the summer of 2017, lobbyists from all the major oil companies and its associations have catalogued dozens of meetings with Scheer, according to the federal lobbyist registry.

And it works: For example, in 2013, CAPP successfully lobbied Ottawa to delay proposed greenhouse gas regulations that were supposed to be introduced that summer.

The industry also began quietly supporting, directly and indirectly, front groups – such as Ezra Levant’s Ethical Oil Institute, or more recently Canada Action, founded in 2012 by Cody Battershill, a Calgary-based real estate agent. Battershill is responsible for producing the “I love Canadian oil and gas” T-shirts that are now ubiquitous at pro-oil sands rallies, and which Scheer has embraced in a tweet.

Battershill and Canada Action have plumped for projects like the Enbridge Northern Gateway and Energy East pipelines. One member of its board is Matt Gelinas, a Tory campaign strategist with ties to companies implicated in the 2011 robocall scandal. In 2014, Battershill hosted a launch party for Canada Action with the help of Kim Farwell, a Syncrude manager in the oil sands and former president of the Conservative Party’s riding association in Fort McMurray, Alta.

Meanwhile, the Manning Centre, a right-wing think tank named after Reform Party founder Preston Manning, has become a conduit of oil industry funds to right-wing advocacy groups like Canada Strong and Proud, which has spawned provincial iterations. Canada Strong and Proud encourages Canadians to support the oil and gas sector.

“The Manning Center is old, established oil and gas money… that is being funneled into a new cool way of political campaigning that is very clearly targeted towards knocking down Liberal candidates and advocating for Conservative candidates,” says Catherine Abreu, executive director of the Ottawa-based Climate Action Network.

One person involved with the Manning Centre is Michael Binnion, CEO of Questerre Energy Corp., a Calgary-based oil company, who is also on the board of governors of CAPP. Binnion is the founder of the Modern Miracle Network, which organized the meeting between Scheer and other oil executives last April in Alberta to discuss ways of beating the Trudeau Liberals.

CAPP and Tory election plans are almost identical

After the Tories lost power in 2015, the party has, if anything, grown even closer to the oil and gas sector. “Scheer has taken over Harper’s relationship and continued it,” says Taft. “There is no arm’s length gap between oil and gas industry and the federal Tories.”

This past spring, CAPP released a “Vote Energy” platform which included a wish list for six new export pipelines by 2025, multiple tax cuts, speedier approval for pipelines and a goal of doubling investment in oil production over the next four years.

Environmental Defense studied CAPP’s demands and concluded, if implemented, they would lead to an increase of 116 millions tons of carbon emissions over current levels by 2030. “In that scenario Canada’s oil and gas sector would be emitting 311 million tons, making emissions from that one industry representing 1/14 of the Canadian economy greater than emissions of 170 countries in the world,” they noted in a recent report. (The oil and gas sector currently is responsible for 27% of Canada’s overall greenhouse emissions).

“The CAPP wish list is a combination of deregulation, lower taxes and a massive expansion in infrastructure (such as pipelines and LNG terminals),” says Marshall.

Yet as Abreu notes, “the CAPP election platform bears some striking similarities to the Conservative platform.”

Indeed, after Scheer unveiled his party's climate plan in June, it was soon noted how it replicated CAPP’s wish list – from getting rid of clean fuel standard, encouraging major emitters to use technology to reduce emissions, offering credits under the Paris agreement, oil and gas expansion, tax reduction for capital investments, and government promotion of the energy sector. Scheer has said he would repeal not only the Trudeau government’s Bill C-69 – which calls for a more demanding review of energy infrastructure projects – but also remove the ban on oil tankers off the coast of B.C., cancel the proposed Liberals' new fuel standard and push for more pipelines to the oil sands, including reviving the Northern Gateway Pipeline.

This is perhaps why the financial markets would love to see Scheer as prime minister: in August, analysts at Toronto-Dominion Bank and Manulife Investments said Canada’s energy bonds would get a boost should the Tories defeat Trudeau this month. “A Conservative government win would be positive for the Canadian energy sector and Canadian energy bonds,” James Spicer, a New York-based analyst at TD Securities told Bloomberg News. Spicer said that the Trudeau government legislation like Bill C-69 is seen as an “existential threat” to the energy sector’s competitiveness.

Meanwhile, Scheer was the only federal leader who refused to attend any of the recent climate strike demonstrations, and a national climate change debate was canceled last week after the Tories refused to participate.

And Scheer seems to be embracing the oil industry’s more aggressive posture towards its critics – along with their PR efforts that mask the sector’s indifference to the reality of climate change.

Big Oil embracing scorched-earth tactics as desperation grows

Last April, at the Azuridge Estate Hotel, a luxury resort that stands just outside of Calgary, Scheer and campaign manager Hamish Marshall met with a group of oil company executives and Tim McMillan, president of CAPP, to strategize on how to defeat Justin Trudeau government this month, among other discussion points.

What was overlooked in the coverage about this meeting were a couple of its other attendees.

One was Arthur Hamilton, the longtime Conservative Party lawyer and fixer and partner at Cassels Brock & Blackwell LLP, a Bay Street corporate law firm. Hamilton was at the strategy session to talk about using lawsuits to silence environmental organizations – a method the Alberta government under Jason Kenney is now considering, putting $30-million aside for its “war room” to battle anti-oil sands activists.

Hamilton has a long and checkered history. As the Globe and Mail noted in a profile about him three years ago: “he has his fingerprints on the majority of Conservative scandals in recent memory, from the Helena Guergis and Rahim Jaffer affair, to Michael Sona and the robocall investigation, to the ‘in and out’ spending controversy, and now the Mike Duffy case.” Hamilton works for oil companies, such as Stetson Oil & Gas Ltd., who he represented in a dispute with an investment firm a few years ago.

But what Hamilton is less well known for is his involvement in a lawsuit launched in 2013 by Resolute Forest Products Inc., a Montreal-based forestry company, against Greenpeace Canada. The suit is seeking $7 million for defamation and economic interference. Greenpeace had criticized Resolute's logging practices. Hamilton is lead counsel for Resolute in what is widely considered a SLAPP (Strategic Lawsuit Against Public Participation) lawsuit, designed to intimidate critics from publishing critical information about companies.

“Resolute is $1-billion plus corporation while Greenpeace has an annual gross income of something around $10 million,” says Steven Shrybman, an Ottawa-based lawyer who has defended Greenpeace in this case. “So there’s a grotesque mismatch in the resources that the participants can spend in an adversarial litigation process. These suits are incredibly punishing of the scarce resources of environmental organizations when they find themselves on the receiving end of the SLAPP suit and face the prospect of absolutely bankrupting them.”

The Resolute lawsuit has dragged on for six years in Canada, and also pursued against Greenpeace in the US – under America’s anti-mafia RICO statutes – before most of it was thrown out earlier this year by a judge in California. Hamilton did not respond to a request for an interview sent by National Observer.

Another attendee at the Azuridge was Republican political consultant Mike Roman, who worked as a special assistant to Donald Trump up until last year, and previously for the billionaire oil barons Charles and David Koch. Roman also participated in the discussion on using litigation against environmental groups.

Starting in 2012, the Koch brothers secretly built a “competitive intelligence” team designed to conduct surveillance and intelligence gathering on their political opponents. They used this information to identify potential threats to the Koch political network and thwart opponents. For example, the team provided confidential documents detailing Democratic voter mobilization plans. The team had a staff of 25, including one former CIA analyst, and operated out of offices in Arlington, Va.

Roman ran this team up until it was disbanded in 2016, whereby he went to work on Trump’s campaign as a senior adviser.

After Trump’s election, Roman went to work at the White House as a special assistant to the president and director of special projects and research, earning a salary of $115,000. “I’ve known him for 15 years. This is a guy you want on your side when you’re in a tough election,” Mike Duhaime, a former political director for the Republican National Committee (RNC) told Politico in 2018. “He does not back down from a challenge.”

The fact that Scheer was associating with people like Hamilton and Roman who embrace aggressive tactics against environmental organizations may reflect growing panic within the oil industry. As Taft says, these methods are being wielded because oil companies “might be more desperate as the foundations of the industry continues to crumble.”

The oil sands face divestment threat

The oil industry has good reason to be alarmed.

Harper’s plan to turn Canada into an energy superpower began to falter in 2014 when global oil prices crashed, largely due to a glut of oil brought on by hydraulic fracking. This led to a slump in the oil patch, with attendant layoffs and cancellation of projects.

At the same time, as concerns over climate change have mounted, the oil sands became a target for divestment. Banks, investment and pension funds around the world are pulling out their money. As a result, Suncor Energy Inc., the biggest operator in the Alberta oil sands, is having trouble attracting investors in Europe.

Last week, Norway’s largest employee pension fund, KLP, sold $58-million in shares of four Canadian companies operating in the oil sands, saying holding the stock did not align with efforts to keep global warming below internationally agreed-upon targets.

But the oil industry is desperate for another reason: they have invested very little in renewable energy – despite issuing ads claiming the opposite. InfluenceMap, a London UK-based NGO that investigates oil industry lobbying, noted in a recent report that the five largest publicly-traded oil and gas majors – ExxonMobil, Royal Dutch Shell, Chevron, BP and Total – spend only 3% of their investments on non-fossil fuel energy sources. “They actually plan to invest up to $25-30-billion each next year on future oil and gas projects, totaling over $100-billion combined,” says Edward Collins, a project lead with InfluenceMap. “Their future planning is overwhelmingly focused on just oil and gas.”

This is not insignificant given that more than one third of greenhouse gas emissions come from just 20 fossil fuel companies. But instead of investing in green technologies, the oil industry instead embraced what some call “soft” or the “new” climate denialism.

Tories and oil industry embrace "soft" climate denialism

For decades, the oil industry denied climate science or that global warming was caused by burning fossil fuels. Today, they acknowledge climate change is happening, but are doing everything possible behind the scenes to ensure no action is taken, according to InfluenceMap. In its recent report, InfluenceMap said the big five oil giants have spent (US) $1-billion since the 2015 signing of the Paris climate agreement producing “misleading climate-related branding and lobbying”.

“These efforts are overwhelming in conflict with the goals of this landmark global climate accord, and designed to maintain the social and legal license to operate and expand fossil fuel operations,” said the report.

Katharine Hayhoe, an atmospheric scientist and professor of political science at Texas Tech University, says the oil industry is exploring solutions to climate change that will not affect their core industry and “promoting green technologies which are woefully inadequate to address the problem.” She says in the US, the industry is spending money on influencing the political system and actively undermining efforts to implement solar panels and other green technologies. And, Hayhoe notes, they still fund front groups that “attack and harass” environmentalists.

This “soft” climate denialism appears to have been embraced by Scheer and the Tories.

While the party has nominally agreed to meet Canada’s Paris Accord commitments – which is to reduce greenhouse gas emissions by 30% below 2005 levels by 2030 – the party’s climate plan would ensure emissions from the energy sector would grow enormously, according to experts who’ve studied it, and sets no targets for greenhouse gas reductions. Hence, the Paris targets would never be met.

Moreover, if Scheer became prime minister and implemented the CAPP agenda, critics say Canada will be left behind in the global race to embrace a green technology revolution based on renewables. “The election of Andrew Scheer, on the environmental file, would put Canada so far behind Europe and other progressive regions such as California and New York,” maintains Taft.

While Scheer and his supporters in the energy sector are harkening back to the days when oil was king, growing evidence suggests that future is doomed.

“It’s no longer just Greenpeace saying this is a sunset industry – it’s bankers in London,” observes Stewart. “And that is terrifying them. And as they become backed into a corner they are preparing to fight harder and nastier… Their entire business plan and related lobbying efforts are geared towards a future where climate change is spiraling out of control.”