UCP is the worst energy government in Alberta’s history

The UCP is the anti-Lougheed. It is the servant of the oil and gas industry. It will give industry everything it wants and more while neglecting Albertans’ interests

As the global energy transition accelerates faster than expected, oil and gas jurisdictions like Alberta are grappling with how to respond. Danielle Smith’s Emissions Reduction and Energy Development Plan (ERED) is one model: hydrocarbon extraction continues to expand, just with fewer greenhouse gas emissions, while clean energy plays a growing but minor role over time. Is the UCP strategy likely to be successful? Probably not. 

Before considering the UCP’s plan, let’s spend a moment thinking about the energy transition.

Looking at the energy transition through the Alberta lens

My primer explains the basic mechanics: The Global Energy Transition Explained

A common idea in Alberta is that the transition isn’t a transition at all, but a diversification of energy sources. Read my column, Slow-walking the energy transition a mistake by Alberta oil patch, for more detail. That is, clean energy like wind, solar, hydrogen, and geothermal will supply rapid growth in energy consumption, but not diminish oil and gas demand for decades. 

This describes the current situation. As fast as solar expands, as quickly as transportation is electrified, fossil fuels continue to supply around 80 per cent of global primary energy, as they have for decades. Energy consumption in emerging markets, especially Asia but also Africa and Latin America, is simply growing too quickly for clean energy to capture a bigger share of primary energy for a long time.

As I argued in this column, Danielle Smith has an oil and gas marketing plan, not a climate plan, the Premier and the industry view the energy transition and the climate crisis as a marketing opportunity (markets are already searching for ways to price oil and gas emissions-intensity) for Alberta hydrocarbons. This is especially true for natural gas, but also applies to crude oil as well.

“Instead of moving away from hydrocarbons, we will use these resources in innovative ways to ensure Alberta continues to provide the world with sustainably-produced energy and products,” Premier Danielle Smith writes in her preface to ERED. “Our approach to reducing emissions is based on reality, instead of unachievable targets set to random timelines.” 

Now, contrast Alberta’s take on the energy transition with that of the International Energy Agency (IEA), which is often criticized for its stodgy forecasts about clean energy adoption. The agency frequently under-estimates the pace of technological change (it missed the now rapid adoption of solar by a wide margin, for example) and is known for its middle-of-the road analysis. Which is why Alberta should pay close attention to recent statements from Executive Director Fatih Birol. 

“Energy markets and policies have changed as a result of Russia’s invasion of Ukraine, not just for the time being, but for decades to come,” he writes

“Even with today’s policy settings, the energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system.”

Where Smith sees opportunity in Russian militarism as LNG demand rises to offset Europe’s frantic race to replace 40 per cent of its natural gas imports, Birol sees a structural change in energy consumption that will quickly work against hydrocarbons. The “Russian lesson” is that importing nations are vulnerable to the political weaponization of energy. The best, and increasingly least cost, option to reduce vulnerability is to create energy at home. That means renewables, nuclear, energy efficiency, and other strategies designed to wean economies off fossil fuels. 

The IEA’s Stated Policies Scenario, its most conservative, sees global natural gas demand peaking by 2030 and oil demand levelling off by the mid-2030s. More climate policy-oriented scenarios speed up the peaks and declines of demand even faster. That was late 2022.

In April, Birol said that markets were changing faster than expected and that “our latest analysis shows that global demand for all road transport fuels — petrol, diesel and others combined — will peak by 2025 as a result of these ongoing trends.” Road transport accounts for almost half of all oil consumption. Peak demand in this sector suggests that overall demand for oil will peak more quickly than 2030, the IEA’s target just a few years ago.

As Corey Cantor, transport analyst for BloombergNEF, explained in the interview below, electric vehicle sales are rising so rapidly that his team has to revise their forecasts several times each year. No wonder, because global automakers intend to spend $1.2 trillion by 2030 switching to manufacturing electric vehicles, according to a recent story from Reuters. I pointed out in this column, Alberta’s elite has a huge blind spot about oil’s biggest competitor: electricity, “consumers like you and me do not decide if cars will be powered by electricity or gasoline. That choice is up to automakers and the GMs of the world chose electricity. Almost all of them will ditch the internal combustion engine between 2030 and 2035.”

And let’s not forget that there is a third model for the energy transition where change happens even more quickly. Kingsmill Bond of Rocky Mountain Institute is a well-known proponent of this model. He argues that fossil fuels have already peaked and will bump along a plateau for a few years before demand craters in the near future. I’ve interviewed him a number of times, but this Energi Talks conversation is a good place to start: 7 “feedback loops” speeding up the energy transition.    

To sum up: there are three ways to view the energy transition. Like Smith and the UCP (slow change, strong hydrocarbon demand for decades), like the IEA (transformative change here now, more on the way), and like Kingsmill Bond (fossil fuels peak is here, followed by demand plateau, then calamitous drop in consumption devastates hydrocarbon production). 

Smith, the UCP, and Alberta-based oil and gas executives are betting on slow change. That is a conscious strategic choice on their part. Is it a good bet?

As a journalist who has reported extensively about the energy transition for the better part of a decade, no, it isn’t. If I were advising Premier Smith, I would opt for the IEA model while keeping a keen weather-eye on the Kingsmill Bond model just in case. New energy technologies combined with aggressive climate policies by governments around the world have deeply disrupted the global energy system. As electronics, now solar, CEO Mike Andrade explains in this podcast interview below, “Energy as a technology vs. energy as a commodity,” energy technology like wind and solar can drive down costs while dramatically boosting efficiency in a way that oil and gas cannot. 

A new energy age is dawning. Betting on a future that looks pretty much like today is a mistake. Alberta voters should at least understand that Smith and the UCP are making choices about the province’s economic future that entail risk. If they understand the choices, they can decide for themselves whether to support them.

Now, what about the UCP record on energy generally and oil and gas specifically?

Were UCP times, better times?

As I explained in a recent column, Notley’s energy and climate policies laid foundation for modern Alberta oil patch, from election day on May 5, 2015 to the end of their government in the spring of 2019, Rachel Notley’s NDP government was plagued by an oil and gas price bust for two years, followed by another industry crisis when a leak in the Keystone pipeline cratered prices again just as they recovered from the previous downturn. Oil prices never poked above $50 per barrel for her entire time in power.

The UCP fared much better. Oil remained above $50 for roughly half of its government. Thanks to Russia’s invasion of Ukraine in 2022 and the resultant global energy crisis, for a few glorious months oil prices flirted with $100, boosting industry profits to record levels and bestowing a bounty on the provincial government’s treasury. 

Natural gas prices were similarly cruel to the NDP and kind to the UCP. Notley’s government suffered with sub-$2 per gigajoule throughout most of its four years, while Kenney and Smith enjoyed prices well above that level,  especially after mid-2021.

Other indices for the oil and gas sector, however, were not as healthy during the UCP tenure. 

Capital expenditures, which drive considerable business activity in the province, dipped well below $20 billion in 2019, recovered somewhat by 2021, before rising to $29 billion (well below the $2013 peak of $60 billion) in 2022. The Alberta Energy Regulator expects $30 billion to be the new normal in its forecast out to 2031. 

Source: PetroLMI.

Interestingly, oil and gas direct employment suffered more under the UCP than the NDP. From May 2015 to May 2019, 10,000 Alberta oil patch workers lost their jobs. From June 2019 to the end of 2022, 20,000 positions disappeared (hiring in the first four months of this year added back a few thousands jobs before the election) even though oil and gas production reached record highs and companies were raking in record profits. 

So, were times better for the oil and gas sector under the UCP? Depends upon the lens through which you’re looking at the data. Canadian oil companies (almost all of them based in Alberta), raked in record profits: $16 billion in 2021, $120 billion in 2022, and an estimated $78 billion this year, according to CBC. Those profits led to resource revenues for the provincial government of $27.5 billion in the 2022/23 fiscal year, with $18.4 billion forecasted for this fiscal year, according to Reuters.

To sum up, under the UCP, corporations and government coffers did very well, but close to 20,000 oil and gas workers lost their jobs. Albertans can decide for themselves if that counts as a win for the province.

The UCP energy record

On the first anniversary of the UCP election victory, I wrote a column titled, Kenney, UCP may be worst energy government in Alberta history. Well done, sir. Nothing Premier Kenney did for the next two and a half years changed my mind. In her brief six-month tenure, Danielle Smith’s record has been even worse.

To understand why, Albertans need to grasp a critical point about the UCP and the oil and gas industry: never confuse rhetoric with reality.

Jason Kenney is a great talker. He’d put on his dad voice, use big words, and embark on flights of high dudgeon about the virtues of Alberta “ethical” oil and gas and the evil of Justin Trudeau and the Liberals, not to mention “eco-terrorists” and the US foundations that supposedly funded them, that actually sounded very convincing if you aren’t familiar with the facts. Kenney understands something important about Alberta: when it comes to the Golden Goose, narratives count, not evidence. If you say the right words, mutter the approved incantations, you will be believed.

Which is too bad because he was frequently wrong on the facts. Did Kenney also lie? A judge ruled there is enough evidence that he did for a defamation suit brought by five environmental groups to proceed against him. In the interview below, Joanna Kerr, CEO of Tides Canada (rebranded as Makeway), explains how Kenney publicly repeated allegedly defamatory comments about her organization even though she says he never once called her office to confirm their accuracy. 

As casual as Kenney was with facts, Smith is much worse. Her premiership has been marked by apologies and “clarifications” of her inaccurate public comments. Like Trump, the former radio talk show host’s public remarks are often fact-checked by journalists, who aren’t shy about correcting her “lies.” 

That both Kenney and Smith played fast and loose with the truth should be kept in mind when considering the UCP government’s record on energy issues and policy. Far too often, the premiers were misrepresenting the facts when speaking about energy. Almost always, they were engaging in narrative management rather than being truthful and straightforward with Albertans.

And that observation leads to a common theme throughout four years of UCP managing the energy file: the exercise of egregiously poor judgment.

Keystone XL pipeline: $1.5 billion loss

Shortly after being elected in 2015, Rachel Notley refused to lobby President Barack Obama to approve the Keystone XL (KXL) pipeline project. In a column at the time, I wrote that she said “there is ‘no realistic objective’ to be achieved because KXL is caught up in domestic American politics and nothing she could do will change that.” Later that year, Obama rejected Calgary-based TC Energy’s application for the project. 

After winning the 2016 presidential election, Donald Trump approved KXL. Construction work proceeded slowly because of many legal challenges brought by landowners, indigenous groups, and environmentalists. In March 2020, then Premier Kenney announced that the Alberta government would provide up to $7 billion to KXL, $1.5 billion in equity and the rest in loan guarantees. 

The public cash was a bet that Trump would beat Democrat Joe Biden in that fall’s election. No changes to the project were proposed to make it more palatable to opponents. No political deals were struck. No creative strategies were tried to make the KXL viable. As it turned out, it was a bad bet. Biden won the election and as soon as he assumed office, cancelled the permit. Alberta lost $1.5 billion and millions more on lobbyists and other costs. 

Watch my Markham On Energy video column, “The Age of Oil Pipelines comes to crashing halt with end of Keystone XL,” below.

Cancelled NDP’s oil-by-rail contract at a $2.1 billion loss

In November 2018, with prices received by Alberta oil producers in freefall because of a leak on the Keystone pipeline, then Premier Rachel Notley announced that her government was buying enough rail shipping capacity for 120,000 to 140,000 barrels per day. The capital cost would be $350 million and operating costs over three years were estimated to be $2.6 billion. 

Those costs would be “fully recouped through royalties and selling of shipping capacity,” she said, and a profit of $2.2 billion was expected. A third-party had been engaged to negotiate the deal, which was expected “within weeks.” The initial delivery of locomotives and tanker cars was expected in the spring of 2019, with the rest arriving by the end of the year. 

Alberta asked Ottawa to share the costs of the oil-by-rail project, but the Trudeau government refused, saying it preferred to invest in safer, more efficient pipelines like the Trans Mountain Expansion. Notley said Alberta would proceed with the oil-by-rail deal on its own. While the deal met plenty of opposition within industry, further delays to pipeline projects convinced some that more rail shipping capacity would help small producers, who were most hurt by the price downturn. 

During the election, the UCP promised to break the contracts because “the private sector was already expanding oil by rail significantly, it is irresponsible to borrow such an enormous amount of money to lease these cars.” After forming government, Kenney announced that the contracts with CN and CP railways would be cancelled at a cost of $1.3 billion. That number later ballooned to $2.1 billion and may have been even higher because the Alberta government experienced difficulty breaking the final supply contracts in 2020 after the onset of the COVID-19 pandemic.

At the very least, Kenney turned a potential $2.2 billion profit for the Alberta government into a $2.1 billion loss, while depriving small producers (a sector hit especially hard by the price collapse that started in late 2014) of critical shipping capacity. 

Watch my interview, “Forget pipelines, ship Alberta oil by rail,” with Richard Masson, executive fellow, School of Public Policy, University of Calgary.

Cancellation of partial upgrading program

I have described the NDP government’s program to support partial upgrading of bitumen to medium or heavy crude oil to enable it to flow in a pipeline without being diluted in a previous column. Given the difficulties faced by Canadian pipeline projects, this was an excellent option to increase crude oil shipping capacity while lowering costs and boosting returns for Alberta producers.

Nevertheless, Kenney cancelled it in October 2019. 

“These programs rely on grants and loan guarantees, and carry a higher financial risk to government – and ultimately, to Albertans,” Energy Minister Sonya Savage said. Economist Kent Fellowes, who had written a paper about the $10 to $15 per barrel higher return for producers created by partial upgrading, noted that “if you take the time to understand these risks (which the Province did) then these can be responsible risks.”

Two consequences of Kenney’s poor judgment

One, investing in Keystone XL and cancelling the oil-by-rail contracts cost the Alberta treasury at least $3.6 billion. Cancelling the partial upgrading program certainly cost oil producers lost revenue because of foregone higher revenue. For a government invoking financial risk as a concern, Kenney and the UCP displayed a remarkably cavalier attitude to the impact of their decisions on the public purse.

Two, These decisions were made during a severe shipping capacity shortage for Alberta oil producers. Kenney and his ministers kept up a steady drumbeat of criticism for the federal government about its “no pipelines” legislation and cancellation of the Northern Gateway pipeline proposal, while they squandered two solid opportunities to increase shipping capacity by not investing in oil-by-rail and partial upgrading. 

Given the financial losses and foregone opportunities to improve market access for oil producers, it appears that decisions by Kenney and his government were made for ideological reasons rather than prudent management.

More irresponsible decisions

Starting in 2018, Jason Kenney advocated what he called a “fight back strategy.” What he meant was battling publicly with the oil and gas industry’s perceived enemies, specifically environmentalists and the Trudeau Liberals. Fighting with the federal government is a time-honoured stance for Alberta politicians, so Kenney’s pugnaciousness was not unprecedented. But two of his “fight back” initiatives turned into political farces.

The “rapid response energy war room,” as Kenney called it before the 2019 election, was intended to “quickly and effectively rebut every lie” told about the provincial energy sector. The proposal was ridiculous from the start. After being launched with a $30 million per budget as a corporation outside of government, and therefore immune from scrutiny, the war room quickly got itself in trouble with several purloined logo scandals, of all things. As I pointed out in a number of columns (here, here, and here), the war room quickly became a propaganda mill for the industry and the butt of jokes in coffee shops around the province. 

Watch my interview, Truth and the Alberta “energy war room” with veteran energy journalist Shawn McCarthy.

Compounding the war room debacle, Kenney followed through on another election promise by appointing Calgary forensic auditor Steve Allan to head up the “public inquiry into the foreign funding of anti-Alberta energy campaigns.” The inquiry was premised on the discredited “research” of Vancouver blogger Vivian Krause (read Energi Media’s investigative report and related columns about Krause here, here, and here). After numerous extensions and a budget bump to $3.5 million, the anti-climactic 2021 report found that environmental groups received just $54 million over 17 years or under $4 million per year (as Energi Media reported in 2018). Kenney and his caucus tried to sell other, less credible, information in the report as confirmation of their claims that US foundation-funded environmental groups materially damaged the Alberta oil and gas industry, but no one bought the narrative.

Watch my interview, “Steve Allan kangaroo court the worst public inquiry in Canadian history?” with Prof. Martin Olszynski, faculty of law, University of Calgary.

The energy war room and the Allan inquiry were farces from the outset and both were a waste of public time and money. But they did shine a spotlight on the conspiracy theory-riven worldview of the Premier and his caucus. Premier Smith has continued in that tradition during the brief six months she has occupied the office.

Other important oil and gas issues

As I was reviewing Energi Media news stories, columns, and podcast and video interviews for this column, I was struck by how much the UCP talks about supporting the Alberta oil and gas industry and how little the government has actually done since 2019.This is not to say it has done nothing. Its accomplishments, however, are rather modest. 

For example, a hydrogen roadmap and a request for proposals to fund hydrogen refueling infrastructure, though little direct support for the emerging hydrogen economy. The Edmonton Regional Hydrogen Hub, for example, was organized and is led by municipalities, business, and non-profit communities, while the Alberta government plays a supporting role. 

Calls for the federal government to fund carbon capture and storage for the oil sands (which it did to the tune of $7.1 billion) while putting up only $387 million of industrial emitter carbon tax revenue over five years for CCUS projects, with an additional $246 million over three years for capital spending on CCUS facilities. Granted the provincial government is also doing the legwork to identify and permit sequestration sites. Still, it appears Ottawa is shouldering the bulk of the burden in an area the UCP considers a priority for the future of the industry. 

There is one issue, however, where the UCP government has made such a serious error that it could cripple the Alberta treasury for a generation.

The moral hazard of Smith’s $20 billion RStar program

After Danielle Smith quit her talk radio gig in Calgary in 2021, she became a lobbyist for the Alberta Enterprise Group. Her primary job, it seems, was to sell the $20 billion RStar program to the Alberta government. She explained RStar in a July 9 2021 Calgary Herald op-ed:

“…a royalty credit to give an incentive to accelerate clean up. So if a producer spends $1 million to clean up well sites, it would pay a lower royalty until that money is paid off…If they are going to have to pay 100 per cent of the cost to clean it up, it just makes sense to allow them to write off the cost by paying a lower royalty when they drill new wells. 

There are all sorts of problems with RStar.

The first is that it violates the Polluter Pay Principle, which is pretty self-explanatory: the Alberta government would pay the polluter to clean up wells it is already legally obligated to reclaim. Smith says that small financially-troubled producers would mostly benefit from RStar. But a critical Scotiabank report says that majors Cenovus and CNRL, Canada’s largest oil producer in the country, and intermediate Paramount Resources would also be big winners. 

Economist Andrew Leach estimates that more “than 85 per cent of cleanup liabilities are held by companies in strong financial positions.” He concludes that RStar is “a free lunch. Or, more properly, a lunch paid for by Albertans. It’s a wealth transfer to the oil and gas industry.”

Then Energy Minister Sonya Savage rejected RStar. “The proposal does not align with the province’s royalty regime,” she wrote in a June 30 2021 letter, “or our approach to liability management and upholding the polluter-pays principle.” Public opposition forced Premier Smith to repackage RStar as a $100 million “pilot project” called the Liability Management Incentive Program that requires consultations to determine exactly how it will work.

In the interview below, Mount Royal University political scientist Duane Bratt argues that proposing RStar as an oil industry-friendly lobbyist, then implementing it as premier, means Smith is blatantly corrupt.

But that still isn’t the worst thing about RStar.

University of Calgary law professor Martin Olszynski says the program is a “moral hazard.” In other words, if the government demonstrates that it’s willing to pay once for industry’s environmental liabilities, why would industry not believe that it will pay again and again and again in the future?

“Why would any operator spend any kind of money on cleanup right now to deal with any of the reclamation liabilities if they can just hope that they might be incentivized to eventually clean these up?” he said. “The moral hazard here is just astounding.”

From this point of view, a $20 billion bail out is just as pernicious as one that costs $100 million. Both create a moral hazard.

This is hardly an isolated example of unethical behavior on the part of the oil and gas industry, which proposed the program, and the UCP, which may have initially rejected RStar but happily embraced it after a change in leadership. As I argue in a multi-part investigative report on the Alberta Energy Regulator, Alberta oil has always been unethical oil.

Unethical Oil and the Alberta energy regulator

You can read Part 1 of the series, Unethical Oil: Alberta’s secret shame, for a more detailed overview of the argument. Basically, I asked the question, how can Alberta oil and gas be “ethical” when the industry has $300 billion of unfunded environmental liabilities between conventional wells and infrastructure, as well as 1.6 trillion litres of toxic oil sands mines waste in 37 tailings ponds in northern eastern Alberta? The short answer is that it cannot.

Since publishing the first installment three weeks ago and doing more interviews and research, I’ve concluded that the industry has no intention of paying for those liabilities. Or, at least, the vast majority of them. Industry, of course, would vehemently disagree. It would point out that Alberta’s Responsible Energy Development Act requires it to reclaim all environmental liabilities. It would even agree with the Polluter Pay Principle.

But I have learned after many years of reporting on oil and gas that what companies and their trade associations say and what they eventually do are often very different. 

In this case, oil companies are confronted with a problem that won’t go away: investors are nervous about the industry’s future and are demanding maximum returns in the form of higher dividends and share buybacks. Companies are already having trouble accessing capital; either they can’t get it or the cost is higher to reflect investors’ view of the risk. Big oil companies promise in their investor presentations that they will give back 75 per cent of all free cash flow. Some, like Suncor, are promising to return half of the remaining 25 per cent if prices and revenue hold up. 

That’s how oil companies keep capital flowing to a capital-intensive industry, stock prices respectable, and CEOs employed.

Another big expense for Alberta oil companies – especially oil sands producers, whose heavy crude has close to the highest emissions-intensity in the world – is decarbonization, driven in part by markets and in part by federal regulations (e.g. impending federal oil and gas emissions cap). The Pathways Alliance, representing 95 per cent of oil sands production, estimated the cost to reach net-zero by 2050 to be $75 billion. The companies want governments to pay $50 billion. They were disappointed when the federal government in its spring budget provided only $7.1 billion for carbon capture and storage, which Pathways thinks will account for two-thirds of the needed emissions reduction.

So, where will the money come from to reclaim all those nasty wells and pipelines and tailings ponds? 

You can read my long answer in subsequent parts of the investigative report, but the short answer is that industry now has a powerful incentive to continue its decades-long strategy of kicking environmental liabilities down the road. Frankly, it has higher priorities – investors and emissions – than those liabilities.

What happens when peak oil demand arrives later this decade, according to the International Energy Agency, and companies find their revenues squeezed harder and harder by global demand destruction?

This is why RStar – or the Liability Management Incentive Program, if you wish – is so insidious. The most obvious funder for companies’ environmental liabilities is the Alberta government, which will already have accepted the moral hazard and set the precedent with RStar.

Climate strategy? What climate strategy?

“Alberta’s aspiration of achieving a carbon neutral economy – net zero – by 2050 will take a dedicated and focused effort to achieve,” Environment Minister Sonya Savage wrote in the ERED. “This will require technologies that are not viable today to come to scale.”

“Aspiration” is not a commitment. And it doesn’t come with targets, which makes it pretty wishy washy. Alberta oil companies like Cenovus have been criticized for doing the same thing. If the UCP and the corporations know they’ll face criticism, why do they do it? Two reasons.

The first is that the oil and gas industry’s approach to climate change has long been to rely on what economist Jason Dion calls “wild card” technologies. Think small modular nuclear reactors – not commercially viable now but might be in the 2030s or 2040s. The industry believes future technologies will be more efficient and cost-effective than those available today. The longer they can push off those expenditures, the better. 

Secondly, remember our three views of the energy transition: slow change, moderately fast change, and very fast change.

Alberta, both industry and government, is in the slow change camp. It thinks it has plenty of time to adapt, which is why the focus is on reducing emissions from oil and gas production to meet federal regulations, not building new markets for oil and gas or building new clean energy industries. Neither the UCP nor the NDP feel there is any particular urgency or threat from the energy transition. This view is shared by the oil and gas industry and most Albertans.

That lack of urgency is expressed in an “aspiration” for carbon neutrality instead of a commitment. 

Watch my interview, “Alberta’s new climate plan lags behind rest of the world,” with Simon Dyer, deputy executive director of the Pembina Institute.

Worst energy government in Alberta history?

Professor Bratt told me during an interview about COVID-19 pandemic management that the UCP was the most incompetent government in Alberta history. The observation holds true for the UCP’s energy and climate management, too. Not even a 5,000 word column is sufficient to do justice to just how bad premiers Kenney and Smith have been on this file.

Below are video and podcast interviews, and threads about Alberta energy and climate issues readers can investigate:

Albertans paying double what they should for electricity?

AER approves coal development in one day. More tales of regulatory capture

Alberta has great oil/gas laws, regulations but fails on enforcement

Imperial Oil’s Kearl tailings pond leak, spill – what we know

How I would spend $20 billion on the Alberta energy economy

In this Energi Talks podcast, Alberta Energy Regulator is captured by oil and gas. Now what? Professor Jason McLean explains that the oil gas industry has captured not just the regulator, but the provincial political parties (including the NDP under Rachel Notley) and the government, as well. That’s the price Alberta paid to develop its hydrocarbon resources and generate decades of prosperity.

But there’s a big difference between “cultural capture,” as McLean describes it, and servitude. A premier like Peter Lougheed may have been captured in McLean’s sense, but he still retained enough independence to take unpopular measures that the oil and gas industry hated at the time, like setting up the Alberta Energy Company or developing the oil sands. 

The UCP is the anti-Lougheed. It is the servant of the oil and gas industry. Kenney and Smith have willingly given the industry everything it wants, but this is an industry that always wants more and there is no doubt that another UCP government will acquiesce.  

Would that be in the best interests of the owners of Alberta’s hydrocarbon resources, the Alberta people? Voters will decide that on Monday. Hopefully, this column helps them make an informed decision. 

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