Contrasting the US vs. Canada

Here are some bits out of a Bank of Montreal (BMO) report done by one of their economists, Sal Guatieri. This gives an excellent contrast between the regulatory state and the outlook of the two economies:

Canadian officials say they have no plans to halt activity at the only deepwater exploration well in North America currently being drilled, which is off the coast of Newfoundland & Labrador, or at three other existing offshore production platforms. As well, the government will continue to grant exploration licences in the Beaufort Sea. However, the government plans to step up regulatory oversight in light of the BP disaster.

And this...

Alberta’s oil sands come out looking “cleaner” in the wake of the Gulf oil spill. This increases the chances that the Obama government will give the green-light to the proposed 2,000 mile underground Keystone Pipeline that would run from Alberta to Texas (a decision is due in the fall), a potential big win for Alberta. Canadian oil sands are already slated to become America’s top source of imported oil this year.

Here's a key assessment from this BMO economist:

Should the damage and political pressure escalate, the offshore oil industry could languish for years, similar to when the Three Mile Island core meltdown scare in 1979 virtually shut down development in the nuclear power industry. This would give a boost to the alternative energy industry.

Here are his calculations of the political fallout:

With the Administration facing voter anger for not resolving the problem sooner, the incumbent Democratic Party could lose seats in the November 2 congressional elections, when all 435 seats in the House and 36 of 100 seats in the Senate are up for grabs. Alternatively, voters seeing the need for even stricter regulation of the oil industry could lean towards the Democrats, especially since Republicans are seen as stronger proponents of off-shore drilling.

I sure hope it is the latter and not the former!