This is the first part in a series of stories stemming from our recent interview with Premier Danielle Smith. 

For Part 2, click here: Premier Says Alberta’s Energy Future To Be Supported By Mix Of Conventional And New Energy

Danielle Smith sees a change happening in Alberta’s energy industry, but it’s not the kind she thinks is loaded in federal legislation that will roll out this year.

The Just Transition bill is described by the federal government as, in part, preparing the workforce for the low-carbon economy. Some think it will spur an energy sector overhaul.

“They never should have used the term ‘Just Transition,’” said Smith, Alberta’s premier, during an in-person interview with members of the DOB’s editorial team last week.

“Everyone knows that as a signal to the extreme environmentalists that an industry is being phased out completely,” she added. “That is how the extreme environmentalists use it, that’s the language they put on their websites.

“That’s the expectation they have, and he never should have used that language and given the indication that was the direction he was going.”

Smith met with Prime Minister Justin Trudeau in early February 2023, and covered topics such as Just Transition. Two days following our interview, the premier issued a letter to Trudeau looking to set next steps, including an area on which she won’t budge.

Her letter states the Alberta government is prepared to work with the federal government on a co-ordinated approach to a carbon capture, utilization and storage program for the purpose of reducing net emissions in the province while attracting major investment toward its energy industry and other sectors.

Smith proposed co-ordinating a federal CCUS income tax credit with an expansion to the current Alberta Petrochemicals Incentive Program to incorporate CCUS projects. She requested that they immediately create a federal/provincial minister-led working group with the objective of reaching an agreement on a co-ordinated provincial-federal CCUS incentive program “in the coming weeks.”

“ … I must make it clear that the above invitation for co-operation and collaboration on this CCUS proposal and other energy and climate initiatives comes with one non-negotiable condition,” she wrote.

It is that the federal government refrain from introducing any new federal legislation or policies that materially impact Alberta’s oil and gas resource development, management or workforce participation without the full involvement, consultation and consent of Alberta.

This includes the contemplated Just Transition legislation and implementation of unachievable targets and measures under the federal Emissions Reduction Plan (ERP) such as the Clean Electricity Regulations (CER) and oil and gas sector emissions cap.

During our interview Smith said a transition in the energy sector is happening, but it’s a move away from emissions, not use of oil and natural gas.

“It is using carbon capture and storage technology, it’s talking about hydrogen, it’s looking at bitumen beyond combustion,” she continued. “It is looking at ways we can develop geothermal. We already have expertise in drilling wells, we’ll drill them for geothermal.

“We already know, in the brine in some of these sites, there’s lithium. So, lithium becomes another aspect — helium is another potential, especially down in my area, in Brooks-Medicine Hat (the electoral district Smith represents as MLA).

“So, if I see some indication that he wants to invest in those kinds of transformations,” Smith said of Trudeau, “I think we’ll be perfectly in sync.”

When asked for her read on emissions reduction policies, she pointed to the “aggressive” target set by the federal government to be “carbon neutral” by 2050.

“My understanding of how our country works is that they can set the overall framework and we have to have our policies align towards that goal,” she added.

From what Smith has seen, she believes industry is aligned on that objective.

“My dispute with the federal government is when they keep moving the goalposts back to be too fast, when the technology isn’t available,” added the United Conservative Party leader.

“We cannot reduce greenhouse gas emissions from oil and natural gas 42 per cent by 2030. I have told the prime minister as much. I have told him it is impossible.”

With a longer outlook, however, a lot more is possible, she noted.

“You can build transmission lines to B.C. and Manitoba in that period of time, you can bring on small modular nuclear in that time, you can build the carbon trunkline and start building out your CO2 capture and storage,” Smith said, not stating specifically the timeframe referenced here. “So, I am really optimistic about the ability of our industry to innovate over that longer-term time horizon.

“But my fear is that the federal government is going to try to impose an unrealistic target, phasing in too early, which is really meant to shut-in production.”

Making sense for Alberta

Getting on the same page is valuable, but Smith won’t accept the messaging out of Ottawa she has heard recently.

“At the moment, we are working on trying to find some kind of common goal to reach that 2050 target, [trying] to figure out what the target should be in the middle — but if he brings through policies like the ones he has talked about in the … last 18 months or so, we are going to have to fight him on that,” she added.

“We have the right, as a province under Section 92A (of the Constitution), to develop and determine the pace of production of our resources and if we are not offside with the overall emissions target, I think the Supreme Court will side with us.

“So, generally speaking, I have told the prime minister — I mentioned this the first time I met him, too — we are not offside with your target for 2050, but you have got to work with us to do it the way it makes sense for this province.”