Alberta Premier Danielle Smith has been calling on Prime Minister Mark Carney to turn words into action on oil and gas infrastructure investments.Jeff McIntosh/The Canadian Press
Danielle Smith got exactly what she wanted on Friday when the federal government named veteran energy executive Dawn Farrell as the first CEO of the country’s Major Projects Office, based in Calgary.
For Alberta’s Premier, getting what she wanted promises to be politically dangerous.
For months, Ms. Smith has been calling on Prime Minister Mark Carney to turn words into action on oil and gas infrastructure investments. In Ms. Farrell, she scored an ally, a fellow Albertan who has served as the Premier’s adviser and got tough jobs done as CEO of TransAlta and the much-maligned Trans Mountain pipeline.
“I’m very, very pleased that the Prime Minister and I have something in common, that he’s going to count her as an adviser as well,” Ms. Smith said at a press conference on Friday. “She’s going to be in the right place, in the right city, doing the right job − and I’m looking forward to working closely with her.”
Carney appoints former Trans Mountain head to lead major projects office
Job one for Ms. Farrell is working with the Prime Minister on a wish list of projects that qualify for speedy regulatory approval and financing.
In energy circles, there are widespread expectations that the list will include the $16.5-billion Alberta carbon capture and storage (CCS) project championed by the Pathways Alliance, a consortium of six oil-sands producers.
There are also widespread expectations that the list will be missing any reference to a new oil pipeline that would carry Alberta crude to ports on the B.C. coast, a concept Alberta’s Premier has consistently promoted.
Numerous pipeline operators, including TC Energy Corp., are pushing for additional natural-gas links from Alberta and Saskatchewan to deep-water export terminals as a way to boost the country’s prosperity.
No private-sector player is pounding the table for another oil pipeline. Mark Maki, Ms. Farrell’s successor as CEO of Trans Mountain, recently made the sensible point that oil producers should make full use of existing pipeline capacity before breaking ground on new projects.
The Prime Minister, an ardent disciple of decarbonizing, and energy company CEOs have consistently held out CCS as the pathway to making oil-sands production a more environmentally acceptable source of fuel.
Dawn Farrell is the first CEO of the country’s Major Projects Office, based in Calgary.Todd Korol/The Globe and Mail
In the past, Alberta’s Premier shared this enthusiasm. Last year, Ms. Smith used a speech in Edmonton to the Carbon Capture Canada conference to extoll the virtues of the technology.
“Carbon capture is a real solution − one of the best we know of,” she said. “It will help to solve the environmental and sustainability problems we’re collectively facing − and Alberta intends to lead the world in this critical field.”
For all this brave talk, the Alberta government has dragged its heels on a financial commitment to the Pathways Alliance’s landmark CCS project, a 400-kilometre-long pipeline that would transport carbon captured at oil-sands facilities to an underground hub near Cold Lake, Alta. The oil companies are pushing the province to pick up roughly 12 per cent of the cost, or at least $2-billion.
Getting in bed with the federal government on a big-ticket CCS facility is politically fraught for Alberta’s Premier. The opposition will beat up on Ms. Smith over the project’s inevitable cost increases and missed deadlines. United Conservative Party politicians will get an earful from voters who object to putting billions of taxpayer dollars into climate-change technology.
Ask Jason Kenney, Ed Stelmach and Alison Redford how Alberta’s conservative caucus reacts when premiers roll out policies that prove unpopular with rural voters.
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The Prime Minister, and Ms. Farrell and her team, are likely to make it clear to Ms. Smith that getting oil pipelines on the national agenda is contingent on getting the Pathways Alliance CCS facility built.
Executives at the Calgary-based companies in the consortium − Canadian Natural Resources, Cenovus, ConocoPhillips Canada, Imperial, MEG Energy and Suncor − are already leaning hard on Ms. Smith to commit taxpayer money to CCS.
Some UCP members will hate co-operating with the federal Liberals.
A strong leader can overcome that hostility. Conservative leaders − think Peter Lougheed or Brian Mulroney − kept their parties in line behind nation-building projects.
Ms. Farrell has Connor McDavid-level skills when it comes to stickhandling major projects. Her appointment marks an opportunity for a province and a country that have struggled to get big things done.
To build Alberta, and the country, Ms. Smith needs to keep her caucus in line and make a bold commitment to carbon capture.
The Premier will have to make that leap knowing it could cost her the premiership.