Tertzakian, Gattinger Say UCP-Federal Government Relationship Must Evolve If Oil And Gas Emissions Targets Are To Be Met

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Peter Tertzakian.

Premier Danielle Smith and the re-elected United Conservative Party (UCP) have many energy and climate issues on their plate, not the least of which will be helping navigate the province’s oil and sector forward in its quest to meet the federal government’s ambitious emissions cap, says a leading energy researcher.

Peter Tertzakian, deputy director, ARC Energy Research Institute, said time will be of the essence if the province, federal government and industry have any hope in meeting the Liberal government’s greenhouse gas emission target of a reduction of 42 per cent by 2030.

“Leading up to the provincial election there was already a lot of work going on behind the scenes. So I see, in terms of the provincial government as the resource owner, starting to negotiate more broadly with the federal government. I think they will be continuing in those discussions,” he told the DOB.

“The perception is that on the surface that there is a lot of headbutting [between the two governments]. But underneath it there’s constructive discussions going on. That’s the way I would portray it.”

Tertzakian said the UCP’s “overwhelming rural representation” garnered in Monday’s election will help dictate the Smith government’s positioning on the energy file, particularly on the conventional side of the oil and gas sector.

“Eighteen months ago the provincial government under Jason Kenney was preoccupied with Jason Kenney and party leadership issues. So while all that was going on the oilsands sector of the industry was negotiating with the federal government, which in and of itself is a bit peculiar because it’s a little bit like the tenant negotiating with the federal government whereas the resource owner was somewhat absent,” Tertzakian said.

“That started to change post-Danielle Smith’s election as party leader. All of a sudden the resource owner is involved. The oilsands, through the Pathways Alliance, and the federal government were already deeply involved in negotiating emissions pathways,” he added.

“Now we also have, over the past 12 to 18 months, the rise of the conventional industry which cuts a huge swath through rural Alberta, sort of wake-up and say, ‘Wait a minute, oilsands is completely different from conventional so we need to be listened to, as well, and what’s applicable to oilsands-related emissions policy is not necessarily applicable to conventional because the extraction modality would be different.”

And that will add another layer of challenges for the UCP as it continues negotiating with the federal government.

“So the Smith government as the resource owner on behalf of the people of Alberta has to basically not only negotiate with the federal government, but they have to be mindful of the complexity of the various subsectors of the oil and gas industry,” Tertzakian said.

“And then there is the complication on top of all this that the pathway to reducing emissions in the conventional is largely dependent upon electrification. And electrification depends upon a lot of the electrical utilities which are under the clean electricity standards, which the Smith government is also dealing with with the federal government.

“So it’s going to be a lot of complex discussions going on behind the scenes to try to figure out how to manage what policy set is introduced from the federal government.”

And with time ticking as 2030 beckons, Tertzakian said it’s imperative the federal and provincial governments pick up the pace of negotiations.

“This is the challenge. There’s a very aggressive target of 42 per cent by 2030. Well, 2030 is only seven years away. The average time to get a permit to put up power lines [that will be required for electrification] is like seven to 10 years,” he said.

“So you can’t even get permitting done, let alone construction of facilities and emissions reduction. So the realities of all this are really starting to come to fore from an energy perspective.”

Meanwhile, Monica Gattinger, director of the institute for science, society and policy, full professor at the School of Political Studies at the University of Ottawa, said the election of a UCP government will bring “heightened conflict” to Alberta’s relationship with the federal government.

“Premier Smith didn’t waste any time last night, saying she’ll oppose Ottawa on its climate plans. Conflict isn’t new, but the number of areas for disagreement is growing — and the next year will be action-packed,” she said.

“Ottawa is finalizing its plans on everything from the oil and gas emissions cap, to the Clean Electricity Regulations, to just transition legislation and investment tax credits. For industry, conflict can be helpful if it shines light on parts of Ottawa’s plans that need changing,” Gattinger added.

“But conflict could be problematic if it hamstrings company efforts to work with Ottawa on regulatory and program design.”

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