By Ucilia Wang
Alberta’s vast oil sands deposits have long defined its economy and culture. Now they could help derail Canada’s national climate plan.
It’s a conflict borne of Canada’s dependence on the oil sand deposits for economic growth and the country’s attempts to tackle climate change, two incompatible priorities. And now the relationship is unfolding like a bad romance as Alberta’s premier announced the province will ditch the national plan to fight climate change.
Alberta can’t live without the oil, gas and mining industry—at 17 percent, it accounts for the biggest slice of its economy—said Premier Rachel Notley in announcing the breakup with the national government last week. She was protesting an appeals court ruling against the Trans Mountain Pipeline project, which landlocked Alberta sees as a necessary economic lifeline to export its oil to markets other than the U.S.
Notley demanded Prime Minister Justin Trudeau recall Parliament for an emergency session to appeal the court ruling. She said Alberta would withdraw from the climate plan “until the federal government gets its act together.”
The struggle to significantly cut emissions while bringing more fossil fuels into the world isn’t unique in Canada. Countries such as Australia and Norway share similar dilemmas as climate change becomes a political liability when fossil fuel production and export drive economic growth, noted Kathryn Harrison, political science professor at the University of British Columbia.
“Those countries are producing way more fossil fuels than they use themselves, so their economy is disproportionally relying on fossil fuels that are burned somewhere else,” Harrison said.
“It’s a special challenge when not only is the oil industry so influential, but so are all the banks that invested in the oil industry and the various supporting sectors,” she said.
The ruling party in Australia just picked a new prime minister, Scott Morrison, after his predecessor Malcolm Turnbull lost the support of his party for a plan to cut greenhouse gas emissions. Coal and liquefied natural gas production is an economic giant in Australia and props up a big part of its export economy.
Norway ships 10 times as much carbon emissions abroad through its oil exports as it releases domestically. Greenpeace has sued the government for expanding oil drilling in the Arctic Ocean. The activist group says that drilling fails to address climate change and violates the Norwegian constitution, which requires the government to protect the environment
“How do you make a transition in an economy to deal with the disruption from taking away fossil fuels is the Holy Grail politically,” said Matthew Hoffmann, political science professor at the University of Toronto.
Alberta hasn’t shied away from addressing climate change despite its dependence on the oil sands. The province created its own climate change plan with a carbon tax based on emissions in 2015, before the Trudeau government crafted the national carbon pricing plan in 2016. Back in 2007, Alberta established a tax based on carbon intensity that targeted large industrial users.
Because Alberta’s own plan puts a higher price on carbon emissions than the national plan in the next few years, the province will still meet the federal target in the near term. Notley, whose party will face a tough election against a more conservative party next year, said Alberta’s participation in the national plan depends on the federal government’s efforts to get the Trans Mountain pipeline built.
Those efforts so far have included a controversial move by the Trudeau government to offer to buy the pipeline project from Kinder Morgan for $3.5 billion. Texas-based Kinder Morgan threatened to end the project after being hit with more than a dozen lawsuits, prompting the government offer in June. The project will add a pipeline that runs parallel to an existing one that runs to the coast of British Columbia. It would increase the volume of crude shipped from 300,000 barrels to 890,000 barrels per day.
The Trudeau administration wants to find a buyer for the project instead of owning it indefinitely, but it has had no luck so far. Then it hit a major roadblock last week when the court ruled that the National Energy Board, which issued a permit for building the pipeline, didn’t adequately assess the environmental impact of the project or properly consult the First Nations whose land the project will cross.
The government hasn’t said whether it will appeal the ruling or re-do the environmental report.
Trudeau’s approach to Trans Mountain tries to tap dance along the line between promoting fossil fuel development and meeting climate goals. The country promised to reduce its emissions by 30 percent from the 2005 levels by 2030 as part of the Paris Climate Agreement. Yet a report his administration submitted to the United Nations last December showed the country is falling behind in reaching that goal.
“It’s hard to be a climate leader when you own a pipeline,” said Dyna Tuytel, an attorney for Ecojustice, which represented the Living Oceans Society and Raincoast Conservation Foundation in a lawsuit challenging the environmental review of the Trans Mountain project.
While Alberta’s plan to leave the national plan is more symbolic in the short term, the move could “unravel the support of the national plan” by other provinces, Harrison said.
Saskatchewan never signed on to the national plan, and it’s challenging the national government’s claim in court that it can impose a carbon price on all provinces. The province is second behind Alberta in producing crude oil and relies on coal and natural gas to produce most of its electricity.
Ontario’s election in June ushered in a new government that opposes carbon taxes and plans to end its cap-and-trade program. The new provincial government has indicated it would also challenge the national government’s authority to impose carbon pricing.
Harrison noted that Alberta, Saskatchewan and Ontario collectively account for more than 70 percent of the country’s greenhouse gas emissions.
“We need to have an honest conversation about the vulnerability of Canada’s oil exports in a carbon-constrained world,” Harrison said. “How do we manage the decline of this industry and look out for people who will lose their jobs? We are not even talking about that in a serious way. We are doing the opposite by expanding the heavy oil production and export.”
For now, it’s playing out like a soap opera among Canada’s provinces and politicians.