Second in a series of three articles on the politics of climate in Alberta..In the last instalment (22nd March) we considered global warming ideology and the current state of scientific consensus..This article reviews what drives players in Alberta’s climate drama, and how imminent new climate policies may therefore unfold. The final instalment anticipates policy announcements in the upcoming federal budget and the response of the Alberta government..The climate policy debate is complicated by the dynamic of the industry versus the environmentalists, versus First Nations, versus provinces, versus Ottawa..Through their environmental lobbies, climate alarmists want to eliminate all fossil fuels. It’s absurd, but they view it as their best opening position in ongoing and difficult negotiations..Sadly for them, the moral and political debate moved beyond this to what is possible and practical..Even Greenpeace founder Patrick Moore and documentarian Michael Moore (no relation) dumped the hardline view. Moderates such as Bjorn Lomborg, Michael Shellenberger and fossil fuel enthusiast Alex Epstein have tempered the ideology. In Canada, Lorrie Goldstein has been writing about the absurdities of climate alarmism for years and was recently joined by Rex Murphy and Jordan Peterson. Other mainstream journalists, such as David Staples in Edmonton, have been trying to bring a more balanced perspective to the debate. The ideological shifts will be hard to resist..The oil and gas industry and the Alberta, Saskatchewan and British Columbia governments are also perfectly aligned; let industry develop resources under strict environmental and employment standards that already make Canadian hydrocarbons the world gold standard for ethical development. Not only should industry be allowed to do this, but in a world of increasing energy scarcity and global dictators, Canada has an obligation to fulfill this mandate..Commenting recently on the Cedar LNG project, B.C NDP Premier David Eby said “the choice between protecting the environment and creating good jobs is a false one. We see a better way.”.All industry wants is to do business within a stable, predictable fiscal and regulatory framework..They will say whatever they need to say to achieve their business goals. They will pursue environmental objectives as long as they don’t compromise investment decisions. Simply stated, if there's enough money to satisfy all the stakeholders and leave something for the business, investment will go ahead..If there isn’t, then capital will move to jurisdictions where investments yield a better return. The fiscal and regulatory environment in Canada ensures there is indeed no business case for exporting LNG off the east coast, but the solution is to remove those impediments, not to posture about how other technology may someday solve the world’s energy problems. If Canada won’t export LNG to Germany, that investment simply goes to Qatar — which doesn’t really care about polar bears..Thanks to the energy industry and the BC and Alberta governments, First Nations emerged as a wild card. They have become substantive and vocal stakeholders in both economic development and environmental protection..Previously, they were co-opted by alarmists to echo their anti-development position. However, remote bands have few options for economic advancement except through partnering in the development of the resources under their feet. B.C. Haisla Nation Chief Coun. Crystal Smith, commenting on the Cedar LNG project said, “Today’s environmental approval for Cedar LNG paves the way for our nation to take control of our future.”.True reconciliation will never be achieved by endless apologies and payoff cheques. Only substantive working partnerships both at the leadership level and the direct employment level will rebuild past broken bridges..The emergence of Pierre Poilievre federally is another possible game changer. He promised to abolish the carbon tax and build pipelines as needed. This may be easier promised than accomplished. There’s no guarantee Poilievre would win against a Liberal party under different leadership. It’s hard to upset Canada’s political hegemony. Out West, we believe strong provinces make a strong Canada. That’s not a sure thing east of Manitoba. Quebec and Atlantic Canada could develop their energy industry if they would accept fracking..Why don’t they want economic prosperity and energy security?.Perhaps they believe politics is a better way to achieve it. The federal Conservatives are pressuring the Liberals to be more reasonable on the climate file, but it’s almost suicide for their electoral chances in Quebec..Can you imagine where Alberta would be if the federal Liberals had not cancelled the Northern Gateway and Energy East pipelines? The Alberta surplus could be $50-60 billion, while political and economic power would be shifting west at the expense of the Laurentian elites. Any concessions in the forthcoming federal budget will only be as much as what the Liberals think they must offer to prevent Alberta from blowing up the country..So regardless of what they say, what do the main players really believe?.Are the main combatants climate alarmists? No..Well, maybe Steven Guilbeault..Alberta Premier Danielle Smith said in 2012 climate science wasn’t settled. She was vilified and then cancelled in the next election. She won’t make that mistake again..The oil industry senior players are hard-nosed engineers, geologists and businessmen. They didn’t survive by living in fantasy land. The alarmist political force is a real existential threat to the industry, but they also want to survive. That’s why the talk is always about “reducing emissions” or “decarbonizing,” or “transitioning.” They’re acknowledging a political reality. The oil industry can accept higher regulatory costs, but basic economics says that means lower overall production at higher prices..This is the real cost of the climate policies to Canadians..Does anybody believe in net-zero by 2050? Probably not. That's just another buzz word alarmists use to work people up. Like, in no particular order, ‘global warming,’ ‘Kyoto,’ ‘Climate Change,’ ‘Paris Agreement,’ ‘350.org,’ ‘1.5 C.’.Industry and provincial governments would like one target goal to win acceptance in the popular mind as being a sufficient response to the “problem.” Fear mongering worked well during the pandemic, but it's less likely to motivate people now. Without stabilizing the narrative, it will be a never-ending battle to reach moving goal posts. Thus, a new group of IPCC scientists just this week were clamouring for net-zero by 2040. But the big oilsands producers, through the Pathways Alliance, keep hammering “Net-zero by 2050.” Hopefully the message this is enough gets through to both Albertans and Eastern voters..Do the federal Liberals believe in the current emission reduction targets, and is the Alberta government really worried about them? No..This is the ninth set of federally announced targets. None have ever been achieved. The current contentious targets are a 42% reduction by 2030 for the oil and gas sector, a 30% reduction on fertilizer use by the agriculture sector and a net-zero electricity grid by 2035..Short of imposing outright production restrictions, independent studies and the federal government’s own analysis indicate these targets can’t be reached. But actually legislating a step down in production towards 2030 is not part of the federal plan. It likely never will be. It would be clearly unconstitutional and would certainly trigger the Alberta Sovereignty Act. Indeed, differing federal reduction targets for different business sectors is also likely offside constitutionally. Thus Smith’s “We can continue with the endless court challenges...” in her first letter to Justin Trudeau was a not-so-veiled threat of another constitutional challenge unless the Liberals come to the table with meaningful concessions..Do they believe in the Just Transition? No..Not even Rachel Notley could renew her support for such a ridiculous notion, even though it was part of her Climate Leadership Plan when she was in power. First, we shut down an industry; then we bail out the unemployed with enhanced UIC and janitorial training? Sounds brilliant. What could go wrong?.Except the feds and the province just tried this with the travel, hospitality and tourist sectors during the pandemic. It was and continues to be an economic disaster. The Just Transition is merely a sop to the few Ontario Liberals who might feel a bit bad for shutting down Alberta’s main industry. But it has proved very useful for Danielle Smith to repeat again and again to reinforce or introduce to Albertans, the federal Liberals draconian overreach..Is there an emerging “Green Energy Economy”? No..Just talking about it can’t will it into existence. In the grocery store you can buy ‘organic’ vegetables only if you're willing to pay more..Are some people willing to pay more for highly unreliable personal transport? Sure. Elon Musk made a personal fortune on this premise, although Tesla has never been as good an investment as the traditional auto manufacturers. But this is a niche market, not an “economy.” One is reminded of the wisdom attributed to T. P. Barnam, “There is a sucker born every minute.” And as every Economics 101 student is taught; “supply arises to meet [even dumb] demand.”.Can the oil and gas business capture and store huge volumes of CO2? Yes, although not without some fiscal and regulatory certainty. The alarmists don’t believe the world can be saved through Carbon Capture, Utilization and Storage, or CCUS. But they have backed themselves into a corner. They can’t credibly denounce reducing CO2 emissions after forever claiming increasing them will end the world. This is why the federal Liberals and Alberta are willing to subsidize these activities..However, what the industry needs is for the two governments to stabilize the longer-term regulatory and fiscal framework so they can confidently spend the needed billions..This will be the subject of the third and final instalment in this series, to run April 4, 2023..William D. Marriott is a retired economist who specialized in public policy analysis of the oil and gas industry.
Second in a series of three articles on the politics of climate in Alberta..In the last instalment (22nd March) we considered global warming ideology and the current state of scientific consensus..This article reviews what drives players in Alberta’s climate drama, and how imminent new climate policies may therefore unfold. The final instalment anticipates policy announcements in the upcoming federal budget and the response of the Alberta government..The climate policy debate is complicated by the dynamic of the industry versus the environmentalists, versus First Nations, versus provinces, versus Ottawa..Through their environmental lobbies, climate alarmists want to eliminate all fossil fuels. It’s absurd, but they view it as their best opening position in ongoing and difficult negotiations..Sadly for them, the moral and political debate moved beyond this to what is possible and practical..Even Greenpeace founder Patrick Moore and documentarian Michael Moore (no relation) dumped the hardline view. Moderates such as Bjorn Lomborg, Michael Shellenberger and fossil fuel enthusiast Alex Epstein have tempered the ideology. In Canada, Lorrie Goldstein has been writing about the absurdities of climate alarmism for years and was recently joined by Rex Murphy and Jordan Peterson. Other mainstream journalists, such as David Staples in Edmonton, have been trying to bring a more balanced perspective to the debate. The ideological shifts will be hard to resist..The oil and gas industry and the Alberta, Saskatchewan and British Columbia governments are also perfectly aligned; let industry develop resources under strict environmental and employment standards that already make Canadian hydrocarbons the world gold standard for ethical development. Not only should industry be allowed to do this, but in a world of increasing energy scarcity and global dictators, Canada has an obligation to fulfill this mandate..Commenting recently on the Cedar LNG project, B.C NDP Premier David Eby said “the choice between protecting the environment and creating good jobs is a false one. We see a better way.”.All industry wants is to do business within a stable, predictable fiscal and regulatory framework..They will say whatever they need to say to achieve their business goals. They will pursue environmental objectives as long as they don’t compromise investment decisions. Simply stated, if there's enough money to satisfy all the stakeholders and leave something for the business, investment will go ahead..If there isn’t, then capital will move to jurisdictions where investments yield a better return. The fiscal and regulatory environment in Canada ensures there is indeed no business case for exporting LNG off the east coast, but the solution is to remove those impediments, not to posture about how other technology may someday solve the world’s energy problems. If Canada won’t export LNG to Germany, that investment simply goes to Qatar — which doesn’t really care about polar bears..Thanks to the energy industry and the BC and Alberta governments, First Nations emerged as a wild card. They have become substantive and vocal stakeholders in both economic development and environmental protection..Previously, they were co-opted by alarmists to echo their anti-development position. However, remote bands have few options for economic advancement except through partnering in the development of the resources under their feet. B.C. Haisla Nation Chief Coun. Crystal Smith, commenting on the Cedar LNG project said, “Today’s environmental approval for Cedar LNG paves the way for our nation to take control of our future.”.True reconciliation will never be achieved by endless apologies and payoff cheques. Only substantive working partnerships both at the leadership level and the direct employment level will rebuild past broken bridges..The emergence of Pierre Poilievre federally is another possible game changer. He promised to abolish the carbon tax and build pipelines as needed. This may be easier promised than accomplished. There’s no guarantee Poilievre would win against a Liberal party under different leadership. It’s hard to upset Canada’s political hegemony. Out West, we believe strong provinces make a strong Canada. That’s not a sure thing east of Manitoba. Quebec and Atlantic Canada could develop their energy industry if they would accept fracking..Why don’t they want economic prosperity and energy security?.Perhaps they believe politics is a better way to achieve it. The federal Conservatives are pressuring the Liberals to be more reasonable on the climate file, but it’s almost suicide for their electoral chances in Quebec..Can you imagine where Alberta would be if the federal Liberals had not cancelled the Northern Gateway and Energy East pipelines? The Alberta surplus could be $50-60 billion, while political and economic power would be shifting west at the expense of the Laurentian elites. Any concessions in the forthcoming federal budget will only be as much as what the Liberals think they must offer to prevent Alberta from blowing up the country..So regardless of what they say, what do the main players really believe?.Are the main combatants climate alarmists? No..Well, maybe Steven Guilbeault..Alberta Premier Danielle Smith said in 2012 climate science wasn’t settled. She was vilified and then cancelled in the next election. She won’t make that mistake again..The oil industry senior players are hard-nosed engineers, geologists and businessmen. They didn’t survive by living in fantasy land. The alarmist political force is a real existential threat to the industry, but they also want to survive. That’s why the talk is always about “reducing emissions” or “decarbonizing,” or “transitioning.” They’re acknowledging a political reality. The oil industry can accept higher regulatory costs, but basic economics says that means lower overall production at higher prices..This is the real cost of the climate policies to Canadians..Does anybody believe in net-zero by 2050? Probably not. That's just another buzz word alarmists use to work people up. Like, in no particular order, ‘global warming,’ ‘Kyoto,’ ‘Climate Change,’ ‘Paris Agreement,’ ‘350.org,’ ‘1.5 C.’.Industry and provincial governments would like one target goal to win acceptance in the popular mind as being a sufficient response to the “problem.” Fear mongering worked well during the pandemic, but it's less likely to motivate people now. Without stabilizing the narrative, it will be a never-ending battle to reach moving goal posts. Thus, a new group of IPCC scientists just this week were clamouring for net-zero by 2040. But the big oilsands producers, through the Pathways Alliance, keep hammering “Net-zero by 2050.” Hopefully the message this is enough gets through to both Albertans and Eastern voters..Do the federal Liberals believe in the current emission reduction targets, and is the Alberta government really worried about them? No..This is the ninth set of federally announced targets. None have ever been achieved. The current contentious targets are a 42% reduction by 2030 for the oil and gas sector, a 30% reduction on fertilizer use by the agriculture sector and a net-zero electricity grid by 2035..Short of imposing outright production restrictions, independent studies and the federal government’s own analysis indicate these targets can’t be reached. But actually legislating a step down in production towards 2030 is not part of the federal plan. It likely never will be. It would be clearly unconstitutional and would certainly trigger the Alberta Sovereignty Act. Indeed, differing federal reduction targets for different business sectors is also likely offside constitutionally. Thus Smith’s “We can continue with the endless court challenges...” in her first letter to Justin Trudeau was a not-so-veiled threat of another constitutional challenge unless the Liberals come to the table with meaningful concessions..Do they believe in the Just Transition? No..Not even Rachel Notley could renew her support for such a ridiculous notion, even though it was part of her Climate Leadership Plan when she was in power. First, we shut down an industry; then we bail out the unemployed with enhanced UIC and janitorial training? Sounds brilliant. What could go wrong?.Except the feds and the province just tried this with the travel, hospitality and tourist sectors during the pandemic. It was and continues to be an economic disaster. The Just Transition is merely a sop to the few Ontario Liberals who might feel a bit bad for shutting down Alberta’s main industry. But it has proved very useful for Danielle Smith to repeat again and again to reinforce or introduce to Albertans, the federal Liberals draconian overreach..Is there an emerging “Green Energy Economy”? No..Just talking about it can’t will it into existence. In the grocery store you can buy ‘organic’ vegetables only if you're willing to pay more..Are some people willing to pay more for highly unreliable personal transport? Sure. Elon Musk made a personal fortune on this premise, although Tesla has never been as good an investment as the traditional auto manufacturers. But this is a niche market, not an “economy.” One is reminded of the wisdom attributed to T. P. Barnam, “There is a sucker born every minute.” And as every Economics 101 student is taught; “supply arises to meet [even dumb] demand.”.Can the oil and gas business capture and store huge volumes of CO2? Yes, although not without some fiscal and regulatory certainty. The alarmists don’t believe the world can be saved through Carbon Capture, Utilization and Storage, or CCUS. But they have backed themselves into a corner. They can’t credibly denounce reducing CO2 emissions after forever claiming increasing them will end the world. This is why the federal Liberals and Alberta are willing to subsidize these activities..However, what the industry needs is for the two governments to stabilize the longer-term regulatory and fiscal framework so they can confidently spend the needed billions..This will be the subject of the third and final instalment in this series, to run April 4, 2023..William D. Marriott is a retired economist who specialized in public policy analysis of the oil and gas industry.
