UCP Leader Danielle Smith makes her victory speech in Calgary on May 29.Jeff McIntosh/The Canadian Press
Having eked out a narrow majority in Monday’s provincial election, Alberta Premier Danielle Smith delivered the usual canned victory speech, with words that might have been lifted from a Hallmark card.
But then she pivoted, summoned the clouds and promised a fight with the federal government. She called on Albertans to “stand shoulder to shoulder against soon-to-be-announced Ottawa policies that would significantly harm our provincial economy.”
The Trudeau government, she said, is “planning on bringing forward new restrictions on electricity generation with natural gas” that will “massively increase your power bills.” Ottawa is also aiming to “introduce a de facto production cap on our oil and gas sector.” The Liberals were portrayed as having a two-stage plan to devastate the province, with Ms. Smith as Alberta’s last line of defence.
That could be the starting gun for a new round of Alberta-Ottawa conflict. Given that Ms. Smith is the loose cannon of Canadian politics – her foot having spent several years becoming exceptionally well acquainted with her mouth – anything is possible. Given that she won the UCP leadership by promising to somehow turn the Canadian Constitution into an à la carte buffet, through the Alberta Sovereignty Act, nothing is inconceivable.
But the dirty little secret of Ottawa-Alberta relations, which neither the federal Liberals nor the provincial UCP much want to talk about in front of their supporters, is that when it comes to climate policy and the oil and gas sector, the two antagonists are not that far apart.
For example, despite Alberta’s loud opposition to the federal carbon tax, the province quietly introduced its own industrial carbon price years ago, before the feds. And Alberta’s industrial carbon price is now in line with the Trudeau government’s benchmark, with plans to increase the carbon price for major emitters to $170 a tonne by 2030. That’s the federal standard and timeline.
Ms. Smith’s government earlier this year also introduced a new climate plan, which for the first time includes the provincial goal of a carbon-neutral economy by 2050. That’s also Ottawa’s destination and timeline.
And then there’s Alberta’s electricity system. Coal, the dirtiest of carbon fuels, has long been the province’s main source of power. In 2018, nearly half of Alberta’s electricity came from coal. But by last year, that had fallen to just 17 per cent. And by next year, coal’s share will be zero.
That’s happening in part because of an ambitious expansion of wind and solar power, but mostly through switching to less dirty (but not carbon-free) natural gas. The Alberta Energy System Operator reports that carbon emissions from the electricity sector fell by 40 per cent between 2014 and 2020.
Alberta also had a methane-reduction plan before the feds. The Alberta Energy Regulator says that, since 2014, methane emissions from the oil and gas industry are down 44 per cent.
And as for the Trudeau government’s alleged scheme to shut down Alberta oil and gas production, last year’s federal Emissions Reduction Plan says its intent “is not to bring reductions in production that are not driven by declines in global demand.” As long as customers want Canada’s oil and gas, Ottawa says it will not aim to prevent such oil and gas from being produced.
Yes, there are areas of disagreement – and Ms. Smith is not entirely wrong to say that some federal policies may go too far. For example, the Trudeau government wants not only a net-zero emissions oil and gas sector by 2050 – a goal shared by Alberta and the oil sands’ Pathways Alliance – it also wants a 40-per-cent emissions cut by 2030. That may not be achievable without cutting production. That means Ottawa should set a lower target, to avoid turning a plan to lower emissions while preserving the economic value of the oil and gas patch into a demand for production cuts and economic harm.
As for electricity, Alberta has made big strides in carbon reduction, and with solar and wind projects in the pipeline, it’s poised for more. But Ottawa wants net-zero electricity by 2035. That’s easy in hydro-rich Quebec, British Columbia and Manitoba. It’s more challenging in Alberta.
Last year, the Alberta Energy System Operator found that, with large but manageable investment costs, “by 2035 the Alberta electricity system could approach zero emissions.” But it concluded that getting all the way to zero is “operationally unrealistic.” It recommended a plan that, while continuing to rely heavily on natural gas, would deliver an emissions cut of 91 per cent. It also considered a scenario with far more renewables, higher costs – and what it said would be just one additional percentage point of emissions reduction.
That means electricity is another area where the feds have to be reasonable. Be ambitious about cutting carbon emissions, but be realistic about costs and benefits.
Unfortunately, calling on everyone to be reasonable is not where politics is at these days.
That’s why staging a fight with the Trudeau government can be a vote-winner in Alberta. It’s also why the Trudeau government is careful not to speak too loudly about perhaps being on the same page as Alberta, or talk too plainly about the centrality of oil and gas to the Canadian economy. Many Liberal voters just don’t want to hear it.