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

Click below to access the first article:

Alberta Premier Shares Thoughts On Energy Transition, Emissions Targets

Premier Danielle Smith, who has a positive outlook on oil and gas in Alberta, sees resource development in the province blending familiar sources with less charted territory.

“When I think about Alberta being an energy superpower, it is not just our traditional energy, it is also new energy,” the Alberta premier told members of the DOB editorial team during a sit-down interview last week.

“As for conventional oil … I think we know with the decline rates, there is always a need for new production to come onstream, and we have got to make sure that we support our little guys.

“That’s part of … trying to address these long-term liability issues is getting some financing stability so they can continue doing their work. That’s where the multiplier effect happens, as well, in all of our small towns, our small communities.

“I am very bullish, as you can see, on the future of oil and natural gas. But, also, [I’m] very realistic that we have to do it with a dramatic reduction in emissions and I am so pleased to see the industry is on board with that,” she continued.

Smith highlighted hydrogen, on which an entire carbon-neutral industry will be developed in the province. She thinks this can lead to attracting manufacturers of related vehicles, among other such opportunities.

“What if we talked to Hyundai and got them to bring hydrogen vehicle manufacturing to Alberta?” she suggested. “What other types of work can we do to develop out hydrogen vehicles?”

She also singled out the potential role the farming sector and municipal vehicles, such as sanders and buses, can play using hydrogen fuel.

“I think the provincial government can be a real catalyst in helping to do that fleet conversion and build out the infrastructure so we can support our municipalities on developing that out and just spawn a whole variety of new projects,” Smith explained.

Enticing international companies

The province’s geological strength may be a business investment asset that has gone untapped. Being a part of a natural gas basin, the UCP leader thinks Alberta has a potential opportunity to provide cost certainty on natural gas and electricity prices in the future.

Smith said, “… Go to Germany and Japan and say, ‘you know what, why don’t you move some of your manufacturing here? We will create a business park that allows us to have 20-year power purchase and natural gas purchase agreements.’

“Couple that with carbon capture so it is carbon neutral, and let’s see if we can get some more manufacturing attracted here. That’s where I see our real opportunities being.”

Geothermal, lithium extraction, and nuclear are also on her radar.

“Small modular nuclear is also going to be an area where we develop,” said Smith. “I think we’ll see that in our oilsands, first of all. I think the earliest we can deploy them here, I have been told, is somewhere in the mid-2030s, but that is very much part of the Pathways group proposal for decarbonization … to move to nuclear.”

Working with neighbours

Partnerships on economic corridors with British Columbia to the west, through to Manitoba to the east have potential, as well, according to the premier. This would involve building out critical infrastructure and having a power grid that includes hydro, supporting decarbonization of some of Alberta’s industries, among other benefits.

As “part of that conversation” with British Columbia regarding LNG export, Smith said Alberta could help B.C. with “their CO2 capture here, or we can get credit with the nations that are going to be recipients of that LNG for reducing your overall emissions profile. I understand that Japan is already interested in sharing credit for the emissions reductions.”

Overall, Smith sees a “broad menu” of work to be done on natural gas and bitumen development.

“The whole conversation around bitumen beyond combustion is how can we create asphalt with zero emissions,” she added. “So, if you can find a way to get the fines out of bitumen so that you are able to develop it, whether it is using nuclear, whether it is using hydroelectric — what’s the problem with bitumen? We are still going to need asphalt, regardless of whether everyone is driving electric vehicles or not.

“I think that’s something we have to have the world understand,” she added.

Smith thinks a better job is needed on the petrochemical front. She called reliance on plastics extraordinary and thinks the federal government is going in the wrong direction by identifying six single-use plastic categories and “demonizing” them.

“I think we need to have a healthier discussion around how we recycle plastics,” Smith said. “That is the important thing — people don’t want plastics to go into the landfill, they certainly don’t want it to get into the waterways, but demonizing stir sticks and straws and the rings on the top of beer cans, that doesn’t make any sense to most people. I think we are going to see more work done on petrochemicals, especially petrochemicals that are going to be zero emissions, as well.”

Need for a roadmap

Smith is now looking to get a comprehensive energy plan on paper. During our interview she shared — which was made public last week — that a new advisory panel will develop a long-term vision for the future of energy in Alberta.

It will be chaired by David Yager, who the premier said has been her energy policy advisor for more than 15 years. Hal Kvisle, Bob Curran, Carey Arnett and Phil Hodge are on the panel, as well.

“… Each week [the team meets] with new groups to really map out what our current challenges are, what our opportunities are — what the solutions might be,” she said. “We are in the process of developing that roadmap.

“Once he’s completed that process and [collated] all that information, we will be able to deliver that report and be able to act on it.”

A final report will be produced by June 30.

“That’s post-election work,” she noted. “We are just doing the pre-work now on it.”

While some may suggest the province’s approach to energy is somewhat piecemeal at the moment, Smith says that shouldn't be the case.

“We have to connect it,” she said.

“I always found it weird that you look at your natural gas home heating bill and you’re paying $4, $5, or $6 a gigajoule, and then sometimes you read, ‘well, we’re selling our natural gas for minus $0.71.’ Why can’t those things get connected?

“I feel like there is a big disconnect between the users of natural gas in our province and the producers of it.”

Connecting those areas can lead to long-term price stability on electricity and heating, methanol, and petrochemicals, said the premier. Mixing this with working aggressively on exports, she added, can deliver the best of both worlds.

“Those are a couple of things I have tasked them with working on,” Smith shared. “Plus, also, how do we meet these emissions targets and bring in all the different innovators, so that we can continue to keep the industry strong?

“How do we keep a strong and robust small- and mid-sized sector? I think that is important and part of the reason we are talking about addressing the liabilities issue. And how do we introduce some of these new technologies?

“Then I guess the other part of it is, how do we bring manufacturing here that is going to aid all of that transition? I think there is nothing but upside and diversification that will happen as a result of that.”