Alberta has its energy strategy, Canada still doesn’t
A SPECTER HAUNTED ALBERTA,
the specter of tax – a Trudeau in Ottawa and the NDP in Edmonton had spooked the oil patch. Albertans remembered the rigs leaving in the early ’80s when then-prime minister Pierre Trudeau introduced the National Energy Plan and drove drillers out of the province.
Before Pierre there was Peter – Premier Lougheed raised royalty rates in the early ’70s, and had the same rates for oil sands production as for conventional oil. After the first Prime Minister Trudeau came Premier Ed Stelmach, whose ill-fated 2007 royalty review deepened the oil patch’s suspicion of what it saw as meddling politicians squeezing the barrel too tightly to fill government coffers. So the industry had good reason to be nervous when an NDP government got elected, hiked corporation tax, and promised to get a “fair value” of oil revenue via yet another royalty review.
Instead, oil firms got a government that listened to them about it. The review panel concluded that under the current system Albertans do indeed get their “fair share,” and recommended that the government leave it alone, give or take the odd technical tweaks. And that’s exactly what Premier Rachel Notley’s done.
But she’s done more. The Notley Doctine on energy is taking shape – co-ordinated, integrated policies. Detailed support for petrochemical production will be followed by yet-tobe-announced help for refining and upgrading. Replacing coal power generation with renewables and gas is also in the works. The strategy supports gas production and commercializes stranded NGLs and methane.
The most controversial part of the Notley Doctrine is, as the Premier puts it, “taking carbon out of the barrel” by increasing the carbon tax (yet there’s no Canadian carbon tax on the foreign crudes imported by Eastern refineries), which she argues will help get oil pipelines to tidewater. This hits oil producers’ bottom lines. The long-game, she hopes, will buy “social licence” for pipelines and slash transport costs to new markets east and west. Will it work? Only FIDs and permits will tell.
It will, however, require the cooperation of other provinces and municipalities. B.C. says it doesn’t want the Trans Mountain pipeline expanding. Notley immediately pushed back. So what’s the federal government doing about it? The second Prime Minister Trudeau’s election promise was to support each province’s energy policies. But when two provinces are at loggerheads, this isn’t much of a policy – it looks like fence-sitting dressed up as plurality. Canada needs a co-ordinated, integrated, national energy strategy – and the leadership to push it through.
Prime Minister Trudeau should work with Premier Notley – together they could drive the ghost of governments past back into the shadows.