Ottawa and Alberta Continue Struggle With Oil and Gas Emissions

Natural Resources Minister Jonathan Wilkinson said on Monday that his government and Alberta have not drawn a line over energy and climate policies and that there is still plenty of room for negotiation.

Alberta Premier Danielle Smith met with Wilkinson and Minister of Intergovernmental Affairs Dominic LeBlanc in Calgary. This was the first meeting between Alberta and Ottawa since Smith’s United Conservative Party was re-elected a month ago.

Worries in Alberta over climate-change policies and ambitions for a shift to a net-zero emissions economy from the federal government in Ottawa have caused tensions between the two governments.

An emissions-free electricity grid by 2035 and a cap on oil and gas industry emissions that could be announced before the end of June aren’t acceptable for Alberta, Smith said before the meeting. She claimed she was drawing a line in the sand, telling Ottawa that it could either support Alberta’s ambition to achieve net-zero emissions by 2050 or move out of the way.

“I put forward our emissions reduction and energy development plan for a reason, because I’m sending the message to Ottawa that we are going to chart our own pathway to meet our national commitment of being carbon neutral by 2050 and they’ve got to come into alignment with us,” said Smith.

Wilkinson claimed after the discussion that they did not “fully get to a meeting of minds.” However, he was willing to listen to Alberta’s worries and consider them “to see the extent to which we may be able to address them.”

“I think it’s a mistake for anybody to be drawing a clear line in the sand saying, you know, we’re not willing to compromise on anything,” he added.

“I’ve never been somebody who takes those kinds of polar positions. You know, we clearly are interested in moving forward with electricity regulations to see a clean grid, because we think that underpins the economy in the future. We have committed to a cap on oil and gas emissions. But there are lots of different ways to do that. There are flexibilities and how you design it.”

Canada and Alberta have set a goal of reaching zero net emissions by the year 2050. However, Canada has a number of early goals, such as a 40 percent reduction in oil and gas sector emissions by 2030.

Smith described the discussion as “very constructive” in a statement released late Monday. However, she pointed out that Alberta voiced its concerns about the 2035 net-zero electricity grid and the oil and natural gas emissions cap.

Smith instead advocated the immediate establishment of a bilateral working group between Ottawa and the province to explore incentives for carbon capture and other emissions-reducing technology for the fossil fuels and energy sectors. In addition, she said, the group would establish “reasonable and achievable milestones” to cut emissions in specific regions by 2050.

“Our delegation also made clear the federal government must not unilaterally legislate any oil and natural gas emissions cap or electricity regulations impacting these areas of exclusive provincial jurisdiction without Alberta’s approval,” she said in a statement.

The federal sustainable job legislation that Wilkinson introduced last week appears to have been addressed. Before, Smith strongly opposed the promised legislation, calling it a “non-negotiable condition” for Alberta and claiming that its approval would be used by Ottawa to destroy her province’s energy sector.

As the country and the world shift to an economy without emissions, the legislation includes an essentially bureaucratic bundle of advisory bodies and reporting responsibilities to establish a plan for protecting and generating energy jobs every five years.

The bill’s original name, the “just transition” plan, has been changed to “sustainable jobs,” which the government claims more accurately describes the bill’s goals.

On Monday, Smith’s worries about the bill seemed to have faded away, maybe partially because of the new name. According to her, branding it a “just transition” would “set the expectation of phasing out oil and natural gas workers completely.”

“We told them that’s not on, we are going to be phasing out emissions, we are not going to be phasing out oil and natural gas jobs. And they seem to have acknowledged that with their legislation that came forward, that includes opportunities for us to invest in carbon capture, utilization and storage, hydrogen, LNG export, and those are the things that I think we can find in common.”