If everyone has to tell the truth about the oil and gas industry, Smith may not be able to handle the truth
Danielle Smith really hates changes to the federal Competition Act that prevent oil companies, mostly located in her province, from greenwashing. There is, however, a simple solution to her angst: oil companies can stop greenwashing. For her part, the Alberta Premier could show leadership by toning down her perpetual outrage.
For journalists, Smith is like former US president Donald Trump: her firehose of fabulism simply overwhelms attempts to fact check. And, again like Trump, everyone now just assumes that she lies, often and without shame.
Sadly, Albertans don’t seem to care if their premier fibs up a storm.
What is a bit rich is that Smith accuses the federal government of doing the same.
“Bill C-59, when it receives royal assent, will prevent private entities from sharing truthful and evidence-based information that happens to oppose the extreme and untruthful oil and gas narrative of the federal NDP and Liberals,” she said in a joint statement yesterday.
Nonsense.
There is nothing in the amendments to existing rules that prevents corporations from telling the truth. They will, however, be required to be more careful that their version of the truth hews more closely to evidence and facts. This is a good thing.
Why, then, does Smith so vociferously oppose Bill C-59?
The Smith playbook
In past columns I have argued that the UCP under Smith fights with Ottawa as part of Alberta’s plan to shield its oil and gas incumbents from the disruption of the global energy transition.
Canadian oil companies are vulnerable. They are middle-of-the-pack cost-wise, far from markets, and oil sands bitumen, in particular, is very high emissions-intensity at a time when even the Americans are cracking down on “high embedded carbon” in their imports.
Climate policy increases their compliance costs. Modeling from the Canadian Energy Regulator suggests that having to pay all of their compliance costs will make much of current oil sands production uneconomic starting in the 2030s. The companies would much rather put off emissions reductions until new technologies like small modular reactors are available in the mid-2030s to early 2040s to do the job more easily at a lower cost.
Imperial Oil, Canadian Natural Resources, Cenovus, Suncor, ConocoPhillips, and MEG Energy don’t oppose lowering emissions, but they want to do it on their schedule at the lowest possible cost. They think Ottawa’s 2030 targets are arbitrary, unnecessary, and unrealistic.
Smith, who briefly worked as an oil lobbyist before becoming premier, is their champion.
Her job is to keep the federal government at bay until the 2025 election, when a more friendly CPC government will presumably gut Liberal climate policies. Her favourite tactic is what I call “enshittification,” which is essentially a blizzard of near truths, fuzzy logic, and outright torquing of the evidence, all communicated in outrageous language at the top of her lungs.
Bill C-59 messes with Smith’s strategy.
While the legislation won’t apply to premiers, it will apply to oil and gas lobby groups. The Pathways Alliance, representing the oil sands producers, is already being investigated for alleged greenwashing by the Competition Bureau after Greenpeace filed a complaint last year. Yesterday, Pathways removed all content from its website, citing “uncertainty” about the new rules.
“These actions are a direct consequence of this legislation and are not related to our commitments or belief in the accuracy of our environmental communications,” CEO Kendall Dilling said in a statement, adding that Bill C-59 creates “significant uncertainty and risk for all Canadian companies regardless of sector, that communicate publicly about environmental performance, including actions to address climate change.”
One of those companies is the Alberta “energy war room.”
The Canadian Energy Centre
When then-premier Jason Kenney created the war room in 2019, it was set up as a corporation with three cabinet ministers as board members. This arrangement prevented it from freedom of information inquiries by nosy journalists. The decision was upheld by the province’s Office of the Information and Privacy Commissioner.
Public interest lawyer Drew Yewchuk explains why this decision was incorrect:
“Because the government did not set up the CEC with an even nominally independent board and retained complete control in the hands of Ministers, the CEC is a department, branch, or office of the Government of Alberta…it should go without saying that the adjudicator’s decision leads to a wildly absurd outcome – the government could move government functions into corporations completely controlled by the executive branch and gain immunity from FOIP.”
Now, I would never accuse executive director Tom Olsen, a former Calgary Herald columnist, or his staff of outright lying. But the Energy Centre articles I read massaged the evidence and data far more than a democratic society should be comfortable with. No one was surprised when the UCP moved the Energy Centre inside the government, where it will be free from the prying eyes of the federal Competition Bureau.
The joint simply doesn’t stand up to close scrutiny.
Time will tell if the Energy Centre disappears completely or emerges in some other form. If it does reappear, it will no doubt have to be more circumspect in its cheerleading for the oil and gas industry.
Say what?
If Ottawa succeeds in neutering the energy war room and forcing oil and gas trade associations to tone down their climate claims, who wins? Smith says that Bill C-59 will muzzle “boards and shareholders, silence debate, and amplify the voices of those who oppose Canada’s world leading energy industry.”
Which voices are those?
Since the Tar Sands Campaign ran out of steam a decade ago, opposition to Alberta’s supposedly “world leading energy industry” has essentially evaporated.
At the same, the voices of those boosting the industry have grown substantially. From Smith and her grovelling government to trade associations and their lobbyists to astroturf organizations to the legion of “oil bros” who police social media platforms, there is a massive campaign both formal and informal to protect Alberta’s hydrocarbon industry.
Well, it worked.
From 2012 to 2022 bitumen production rose from just under 2 million per day to 3.2 million per day. Total provincial oil production is now higher than all of ExxonMobil’s global output. Alberta all by itself is the eighth largest oil producer in the world. And let’s not forget the $35 billion Trans Mountain Expansion pipeline Ottawa bought and built for Alberta.
David’s pebbles have been no match for the might of Goliath.
And now, the rest of the story
The oil and gas industry’s real problems are economic.
As I argued in a recent column, the Alberta oil companies’ business models have been disrupted by the rapid electrification of economies around the world. My guess is that in five to 10 years most of them will be failing or bankrupt.
To those who scoff at the prospect, former Harvard Business School professor Clayton H. Christensen replies, “…the list of leading companies that failed when confronted with disruptive changes in technology and market structure is a long one.”
The bigger they are, the harder they fall, and Alberta’s oil giants are not immune from changes to global markets.
Smith may be able to shield Alberta oil companies for a short time, but there is no stopping the disruptive forces unleashed by the energy transition.
If all parties in the Canadian energy conversation are now required to tell the truth, perhaps that truth is where we should start.
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