Alberta NDP, wake up, smell coffee

In a column in the Calgary Herald on Friday, Alberta’s energy minister, Marg McCuaig-Boyd, writes it is “false” there is a loss of support among major oilsands companies for her province’s climate leadership plan and asks this writer for suggestions about better ideas to get pipelines approved.

Here are some thoughts: Stop relying on the environmental lobby to decide the future of Canada’s energy industry and step up the defence of pipelines because they are in the national interest and a national obligation. It’s the difference between allowing economic self-mutilation to win the approval of interest groups who will never give it, and being a champion of Alberta’s livelihood and environmental record.

Putting on the shelf the 100-megatonne-a-year emissions cap for the oilsands until proposed pipelines are built would be a concrete way to start. Acknowledging that under her watch Alberta’s oil and gas sector has lost its confidence would be helpful.

Her NDP government should have noticed by now — given that proposed Canadian pipelines remain as challenged as ever, whether to the West or East coasts — that the green lobby has one goal: to shut down the oilsands. No amount of regulation, emissions restraint or carbon taxes will do.

Just look at B.C., where a supposedly kindred NDP government supported by the same green lobby is hell bent on blocking the Trans Mountain expansion so vital to Alberta’s NDP. Let’s see whether the federal Liberals, similarly beholden to environmentalists, are prepared to call in the army to defend the pipeline’s construction this fall.

So far, all we have for sure, both in Alberta and federally, is the subjugation of an industry to environmental goals, specifically carbon emissions reductions. These policies target the oilsands like nothing else, with the enthusiastic approval of the Alberta government.

News that the federal Liberals are thinking of sidelining the Calgary-based National Energy Board in favour of putting the Canadian Environmental Assessment Agency in charge of pipeline reviews would be another blow for the energy sector and for Alberta, while giving more clout to environmental organizations to kill projects. It’s what environmental groups have wanted all along.

The change would pile on to new regulations to take into account greenhouse gas emissions of projects, plus Alberta’s new hurdles for oilsands projects. Of these, the 100-megatonne cap is the most destructive.

Why would anyone invest in a notoriously longterm business if it runs out of room in the next 10 years, where existing plants would be shut down if emissions hit the limit, where new projects would be put on hold if recommendations to the government by a panel including environmental activists are implemented? Besides, isn’t it overkill to have a cap on emissions if there is already a hefty carbon tax?

The cap, proposed by four oilsands firms and by four environmental groups, was a bad deal cut in a time of panic. Anti-oil Barack Obama was in the White House, the Paris climate deal was looming, and the oil business was on its knees due to the collapse in price. In her column, McCuaig-Boyd says the four oilsands companies that helped design the cap — Suncor, Shell, CNRL and Cenovus — remain supportive.

“This is the same plan cited by the federal government as essential to its approval of two new pipelines last fall,” McCuaig-Boyd writes. “It means production can continue to increase — rising this year to record levels — while reducing the carbon intensity from every barrel.”

The oilsands industry is trying hard to make things work. But the price is high and the results are in plain sight: empty office towers, high unemployment, weak stock prices, low spending.

It’s a fact that three of four of those oilsands leaders are no longer in their positions or in the country, and that the conditions they helped create made things worse, not better, for their companies.

It’s a fact that companies that have other choices, like international companies including Shell, have exited the business; that smaller oilsands entrepreneurial companies are suffering from a lack of capital; that many other oilsands firms remain opposed; that investors have taken their cash elsewhere.

As RBC Capital Markets analysts say in a report to clients this week: “Recent sales by Shell, ConocoPhillips and Marathon Oil totalling approximately $26 billion reflect a host of factors, including portfolio optimization, oil supply costs, deleveraging thrusts and ESG (environmental, social and governance) considerations … The exodus should raise alarm bells amongst Canada’s policy-makers. Oil prices aside, Canada’s export pipeline melodrama underway since 2013 is undermining the next major wave of oilsands development because market access costs are set to rise.”

And then there is the reality south of the border, where U.S. President Donald Trump is not only prioritizing energy over climate change, but this week announced a policy of energy dominance involving increased exports of natural gas, coal and oil. How do Alberta and Canada justify its oilsands restraint in the face of that?

McCuaig-Boyd argues that the naysayers should “stop betting against Alberta.” The naysayers are not betting against Alberta. They’re betting against bad policies and governments that fail to see the damage they create.