The politics and reality of capping Alberta’s oil and gas emissions

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Standing in a stiff Alberta wind near a power plant west of Edmonton on Monday afternoon, Alberta Premier Jason Kenney appeared perplexed by Prime Minister Justin Trudeau’s announcement only hours before to put a hard cap on greenhouse gas emissions from oil and gas.

Calling it “peculiar” that the prime minister hadn’t talked with him before his speech at the United Nation’s COP26 climate summit in Glasgow, the Alberta premier wondered why Trudeau “would make an announcement like this without consulting with the province that actually owns the overwhelming majority of Canada’s oil and gas reserve.”

“We need to know what the details are,” added Kenney

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But nothing that happened on Monday — Trudeau’s announcement or Kenney’s reactions — should surprise anyone. The prime minister fulfilled an election promise.

The Alberta premier returned to his familiar refrain of bashing Ottawa in hopes of scoring political points to revive his sinking popularity, according to political observers.

The question is whether another war with Ottawa will help boost Kenney’s flagging political fortunes — and whether his usual allies in the oilpatch will have his back this time.

Is fulfilling a campaign promise really a surprise?

With Capital Power’s Genesee Generating Station as a backdrop to announce more than a dozen emissions reducing projects on Monday, Premier Kenney seemed incredulous, wondering aloud if the federal government is “trying to fundamentally limit the development of Canadian resources.”

But the federal Liberal government’s pledge on the international stage this week to limit the growth of one of Canada’s biggest industries in order to curtail the earth’s average temperature increase to 1.5 degrees Celsius should come as no surprise.

On Thursday, the federal government followed up by making good on its other election promise to cut subsidies to oil and natural gas companies that help them expand outside of Canada.

The oilpatch represents about 26 per cent of Canada’s total emissions.

The Liberal’s recent election campaign platform makes plain the party’s plan to “cap and cut emissions from oil and gas.” Trudeau even promised five-year targets for the oilpatch, starting in 2025, to get to net-zero by 2050.

Prime Minister Justin Trudeau arrives for the COP26 summit in Glasgow on Monday. The U.N. climate summit in Glasgow gathers leaders from around the world, in Scotland’s biggest city, to lay out their vision for addressing the common challenge of global warming. (Phil Noble/The Associated Press)

“I don’t think that there’s any reason for a surprise here,” said Sara Hastings-Simon, a professor and director of the sustainable energy development program at the University of Calgary.

After all, the energy industry has already signaled its intention to cut emissions.

In June, big oil producers — including Canadian Natural Resources, Cenovus Energy, Imperial Oil, MEG Energy and Suncor Energy — formed the Pathways alliance with a goal of achieving net-zero greenhouse gas emissions in Alberta’s oilsands by 2050.

The plan is to use, among other things, carbon capture use and storage (CCUS) and emerging emissions-reducing technologies to cut the greenhouse gas emissions responsible for climate change.

Five years ago, the industry also agreed to the previous NDP government’s 100-megatonne emissions cap on the oilsands. Last year, the federal Liberal government asked the UCP government to make the cap enforceable.  

Kenney, for his part, conceded on Monday that his government is not opposed to a cap proposed by Ottawa.  “We are willing to discuss with them the proposed 100-megatonne cap,” said Kenney.

It’s not clear how the federal government’s proposed cap on the oil and gas industry will work. There are questions if it will apply to the entire oil and gas sector or be imposed on specific companies or sites.

After signalling his openness to talking about a cap on oilsands’ emissions, Kenney then turned to championing Alberta’s oil and gas industry, highlighting the jobs linked to the sector and its importance to the Canadian economy.

The UCP premier then vowed to “vigorously defend the economic interests of Alberta, including the right to develop our own natural resources,” ratcheting up his combative stance with the federal Liberal government over climate change policy.

Reviving an “old playbook”

At the onset of the pandemic, Kenney dialed down his anti-Ottawa attacks.

It’s hard to beat up on a federal government when “we’re all in this together” and Albertans were getting more federal COVID-19 financial support per capita than any other province in the country.

In recent weeks, Kenney has turned the volume up again on Alberta’s grievances with the federation, including equalization and policing

On Monday, before his full-throated defence of Alberta oil and gas, Kenney took aim once again at the new federal Liberal government’s environment minister Steven Guilbeault, lumping the environmental activist turned politician in with “the gross hypocrisy of the radical green left” for opposing nuclear energy, which proponents argue could help lower greenhouse gas emissions  in oilsands extraction and processing.

  • WATCH | Alberta’s premier reacts to Canada’s new federal environment minister

Alberta’s premier reacts to Canada’s new federal environment minister

9 days ago

Jason Kenney says the longtime activist’s appointment as environment minister sends a “very problematic” message. 3:01

Two days later, the UCP leader turned his fire on the Bloc Québécois leader after Yves-Francois Blanchet called out what he called Alberta’s “toxic economic model.”

The Bloc leader also highlighted his party’s campaign pledge to create so-called “green equalization” payments, whereby provinces such as Alberta, that produce more greenhouse gas emissions than other provinces, would have to pay jurisdictions that pollute less than the national average. 

At a COVID-19 briefing on Wednesday, Kenney blasted the Bloc leader, accusing Blanchet of trying to divide the country and attacking Alberta’s energy industry.

“I think this is a typical provocation by Mr. Blanchet, who loves Alberta bashing. It would be nice if for once he stood up, as leader of his fringe party, and expressed some modicum of gratitude to Alberta,” Kenney said.

In the past, Kenney’s tough talk and combative posture with the ruling federal Liberals resonated with many Albertans.

After years in the nation’s capital as a Conservative member of Parliament and high profile cabinet minister in Stephen Harper’s government, with a reputation for savvy political and communication skills, Kenney returned home to Alberta in 2016 in a blue pickup truck that he crisscrossed the province in, campaigning to first unite the right and then later become Alberta’s premier.

Fast forward two years and Kenney is much less popular. The UCP’s controversial handling of the novel coronavirus pandemic and party infighting now threatens Kenney’s grip on the party he helped form.

A recent CBC News poll suggested nearly eight in 10 Albertans somewhat or strongly disapprove of the UCP’s handing of COVID-19.

Longtime political watcher Duane Bratt thinks Kenney is reverting to form in hopes of resuscitating his deflated political standing.

“It sounds like desperation to me,” said Bratt, a Mount Royal University political scientist.  “He’s going back to his old playbook.”

“Kenney,” he added in an interview with CBC News, “has one playbook and this is it.”

Will the old political playbook work this time?

Bratt wonders if Kenney’s recent anti-Ottawa rhetoric will work this time. 

Two years after his landslide victory — in the wake of the misery, human suffering and polarized rhetoric that COVID-19 brought — many Albertans no longer feel enamoured with Kenney.

On top of that, public concern about climate change continues to grow. And Ottawa seems intent on lowering greenhouse gas emissions. Kenney risks being seen as out of step with where the world is going on climate.

“Alberta and Premier Kenney are looking more like an outlier on the issue of climate change,” said Chris Severson-Baker, with the Pembina Institute, a clean energy think tank.

“This is the kind of thing,” added Severson-Baker in an interview with CBC News, “that doesn’t help companies who are trying to attract investment for decarbonization to the province.”

Kenney’s rhetoric may also put him offside with the province’s oil and gas industry, which also increasingly talks about cutting oilsands greenhouse gas emissions.

Industry support for cutting oilsands emissions

In a recent interview with CBC News’ West of Centre podcast, the head of Cenovus  Energy, a big player in Alberta’s oilsands, stressed the “need to reduce emissions”

Calgary-based Cenovus Energy CEO Alex Pourbaix also highlighted the “very productive relationships” he’s had with federal Liberal cabinet ministers, expecting he’ll be able to “forge the same kind of relationships” with the new federal environment minister, who once tried to install solar panels on the roof of the home of then Alberta premier Ralph Klein as part of a Greenpeace stunt.

Some in the industry seem intent on lowering the temperature on climate change.

“We have to move away from polarization,” Martha Hall Findlay, the chief sustainability officer at Suncor Energy, told CBC Radio One’s The Current on Monday.

“We have to collaborate to move forward,” added the former Liberal. “We cannot make this work if we’re pointing fingers, if we are vilifying.”

Amidst this plea for less finger pointing, climate change activists remain skeptical of government and industry’s commitments and efforts to cut greenhouse gas emissions.

Oil and gas hedges?

The oil and gas industry has done a lot over the last decade to reduce its emissions intensity, but actual total greenhouse gasses from the oilpatch have increased because of higher production.

Pourbaix foresees oil and gas remaining a “huge part” of Canada’s energy mix “for decades to come.”

“I think there is going to be a transition, but it’s not going to be a transition off oil and gas. It’s going to be a transition to oil and gas that has much lower emissions because I just think the role they play in our modern world right now is very difficult to replicate or replace,” he told West of Centre.

Chris Severson-Baker, with the Pembina Institute, hopes the Cenovus CEO is wrong.

“He, and his company, are betting against the world being able to tackle climate change,” said Severon-Baker. “Hopefully he’s not, right,” about a future demand for oil and gas well into the future, he added.

“If that’s the case, we simply are not going to be able to prevent dangerous climate change.”

report by the International Energy Agency (IAE), an autonomous intergovernmental organization, warned earlier this year against investing in new coal and oil and gas projects in order to meet climate mitigation goals.

Questions about carbon capture

Pourbaix — and others in the oil and gas industry — are also betting big on carbon capture, the process of capturing C02 emissions from fossil fuel-powered energy generation and storing it deep beneath the earth or for reuse.

UCP Premier Jason Kenney is also a big fan of CCUS, calling on Ottawa on Monday to invest $32 billion in the technology.

The oil and gas industry’s Pathways alliance also trumpets the benefits of carbon capture and storage technology.

Severson-Baker remains skeptical about CCUS playing a big role in cutting oilsands emissions, as Kenney suggests.

The Alberta regional director of the Pembina Institute says the Canadian oilsands producer alliance to achieve net-zero “looks good on paper,” but “it’s overstating the opportunity for carbon capture utilization and storage.”

Experts believe meeting the climate change goals agreed to this week at COP26 will mean leaving a lot of oil in the ground.

They envision a time not too far down the road when oil and gas companies won’t be able to make a profit extracting it from the earth, highlighting, they say, the pressing need for Alberta to transition to a low-carbon economy.

Updated climate pan for Alberta

In the coming weeks, Alberta plans to unveil its updated climate change strategy.

Climate change activists and experts hope the UCP government seizes the opportunity to remake the oil-rich province’s economy.

Climate change expert Sara Hastings-Simon predicts demand for Alberta oil will eventually wane.

“What we see,” says Hastings-Simon, “is that in a world that is increasingly ratcheting up ambition towards addressing climate and to reaching net-zero, that means that that demand [for oil] is going to fall.” 

The IAE’s most recent annual report, in fact, predicts a future energy economy that “promises to be quite different from the one we have today.”

Many Albertans rely on the oil and gas industry for their livelihood. Transitioning away from oil and gas could trigger, by one estimate, 312,000 to 450,000 job losses.

The federal Liberal government pledged $2 billion to help workers in oil-producing provinces transition to a greener economy.

The federal government’s “People-Centred Just Transition” discussion paper also highlights the importance of creating “decent, fair and high-value work” to replace the jobs lost in oil and gas.

Hastings-Simon also believes Alberta has an opportunity to seize the “huge economic opportunity” that comes from transitioning to renewable energy.

The climate change expert stresses it’s crucial to start planning now to support oil and gas workers who will eventually lose work because of the expected declining global demand for Alberta’s oil and gas.

Whether that planning begins in earnest soon remains a question. Moments after Premier Kenney signalled his openness to discussing an emissions cap on Alberta’s oil and gas industry with the federal government, he vowed to “vigorously defend the economic interests of Alberta.” 

Kenney, it appears, has reverted to his “old playbook” of waging war with the federal Liberals.

Political watchers, however, are not so sure it will win the deeply unpopular politician many political points this time — and climate activists and scientists worry that it’s just stalling the hard work needed to make Alberta’s energy transition happen.

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