Kenney Government Takes New Approach On Energy: Will It Work?

The Kenney government has come to power with a new approach to energy. It can be summed up in four words: fight back, dial back.

The government is fighting back against the federal government on the carbon tax and legislation that hampers market access. It’s fighting back against the B.C. government’s opposition to the Trans Mountain pipeline expansion project. It’s fighting back against environmental groups and misinformation about Alberta energy. And it’s dialing back the Notley government’s commitments on climate.

Will it work? Maybe.

Much will depend on how it’s executed and where the government ultimately lands on energy and climate policy.

Fighting back might feel satisfying, but if not done carefully, it risks rubbing people in the rest of Canada the wrong way and will compromise the government’s ability to achieve its objectives. Dialing back climate commitments might sound attractive, but as a major oil and gas producer, Alberta needs to show it takes climate change seriously. What’s more, fighting back and dialing back won’t address all of the challenges of securing market access, notably Indigenous consultation and engagement, and local environmental concerns over pipeline safety and tanker traffic.

So how can the government thread this needle?

A sober look at recent history is a good place to start.

The Kenney government’s overarching objective is securing market access for Alberta energy. This is not a new aim — Alberta governments have sought to get resources to market since at least the 1950s.

What’s different is the last decade. Burgeoning oil and gas production in the U.S. has changed the nature of market access: this is the first time access means getting energy to international markets beyond North America. In a world of lower oil and gas prices, price differentials and steep competition with the U.S., securing new customers — whether to the east, the west or internationally — has been the primary objective of Alberta governments over the last decade.

Successive governments — from Redford to Notley to Kenney — have tried a different approach. Redford focused on intergovernmental collaboration and spearheaded the National Energy Strategy. Notley focused on government-industry-NGO collaboration with the Alberta Climate Leadership Plan.

While both approaches made good sense in their time, neither succeeded in getting shovels in the ground.

There was lots of enthusiasm among the provinces for a National Energy Strategy, but in the end it lacked teeth. It was difficult for governments to get much beyond a lowest common denominator vision because the Council of the Federation operates on consensus. Add that Stephen Harper’s federal government refused to come to the table. It’s tough to have a national anything without the feds in the room.

The limitations of a vague vision became apparent quickly — it did nothing to avert the 2012 conflict between B.C. and Alberta over the Northern Gateway pipeline proposal. Since then, the strategy has died a quiet death — all but replaced by the federal Liberal government’s Pan-Canadian Framework on Clean Growth and Climate Change (which itself might die a public death — more on this below).

Premier Notley’s Climate Leadership Plan aimed to show that the province takes climate change seriously with an emissions cap on the oilsands, an economy-wide carbon levy and coal phase-out in the power sector. The plan was developed in collaboration with industry and ENGOs and was meant to secure federal support for pipelines. Many viewed it as a compromise ‘deal’ between warring parties: climate action by the government and industry in exchange for ENGO peace on pipelines and the oil sands. The famous ‘photo on the stage’ with the premier announcing the plan alongside corporate CEOs, climate activists and Indigenous leaders captures the buoyant mood of the time.

But the good times didn’t last long. While the plan may have paved the way to Ottawa’s support for pipelines, it didn’t succeed in getting shovels in the ground. Pipelines began to be opposed on much broader environmental grounds than climate — leaks, tanker spills, impacts on marine life. The plan also didn’t halt opposition to the oilsands. 

Which brings us to the Kenney government. After almost a decade of efforts to collaborate, Albertans are frustrated. Rightly or wrongly, many have taken the lesson from all this that compromise doesn’t work and that climate action doesn’t build pipelines. What’s more, there’s a growing view in the province that federal legislative proposals like bill C-48’s oil tanker ban and bill C-69’s overhaul of environmental assessment are a concerted strategy by the Liberal government to crush resource development.

Little wonder then that Premier Kenney is going with a fight back, dial back strategy.

Some elements of the strategy have merit.

There is a growing chorus of critiques against federal bills on environmental protection. Alberta may be leading the charge, but other jurisdictions, industry sectors and Indigenous leaders are sounding alarm bells that Ottawa hasn’t struck a workable balance between environment and economy. The Kenney government’s staunch push back — including threats of a constitutional challenge and national unity crisis — may ensure the legislation gets a closer read and amendments where warranted. 

Likewise, the government’s commitment to establish an inquiry to investigate foreign funding of ENGOs merits a closer look. The issue of foreign funding is part of a broader set of policy questions about ENGOs’ roles in politics and decision-making. An inquiry may find there is nothing to see here, but shining a light on the subject could address concerns, uncover uncomfortable truths and dispel myths. It will be essential, though, that the process be credible, rigorous and balanced.

Fighting back on the carbon tax, however, is a double-edged sword. The federal-provincial table has changed dramatically since creation of the Pan-Canadian Framework in 2015. Then, many provinces — including Alberta — were singing from the same song sheet as Ottawa. Saskatchewan was the lone hold-out. Now, Saskatchewan has a growing list of friends opposing the tax — Ontario, Alberta, New Brunswick and Manitoba. The federal Conservatives have said they will scrap the tax if elected this fall. 

But fighting back risks making Alberta look like it doesn’t take climate change seriously. If Premier Kenney also dials back the Notley government’s climate policies — notably the emissions cap — it risks sending a ‘drill baby drill’ message to Canadians. Public opinion polls show Canadians support oil and gas development, but they want to see it done responsibly. Alberta needs to be able to credibly say it’s doing just that.

Climate action alone won’t get shovels in the ground, but it is a necessary ingredient for those wanting to do so.

Fighting back is also risky when it appears patronizing or arrogant. Albertans sometimes hold the view that Canadians should be grateful for the energy the province supplies the rest of the country and for the fiscal contributions it makes to the federation. Rightly or wrongly, this view is rarely shared outside Alberta. Fighting back along these lines risks coming across as moralizing and entitled, and could turn off ordinary Canadians who might otherwise be supportive of Kenney’s broader strategy.

The government might be further ahead to build bridges with other provinces instead. 

Finally, Kenney’s strategy doesn’t attend to the local environmental reasons people oppose pipelines. Trans Mountain fell down on consultation with Indigenous communities and marine shipping. How will the Kenney government address these matters? Here, a fight back dial back strategy is unlikely to be successful. Sooner or later — probably sooner — the government will need to articulate a substantive policy position on these issues. In the short term, it might do well to begin building bridges with Indigenous leaders.

Threading the needle of market access won’t be easy for the Kenney government — just as it hasn’t been for its predecessors. The new government’s approach has a number of merits, but much of its success will hinge on how it’s executed. Success will also hinge on going beyond fighting back and dialing back to developing policy on the full range of energy development challenges. The premier will need to keep his eyes on that needle.