Alberta’s fraught politics around the upcoming federal just transition bill are intensifying, with provincial opposition leader Rachel Notley urging Ottawa to scrap the legislation and a fossil CEO claiming a just transition really means a boom in oilsands extraction.
In early January, Natural Resources Minister Jonathan Wilkinson promised to table the long-awaited just transition act early this year, casting it as a gateway for oil and gas workers to move into green energy jobs. “I do not believe the challenge we are going to face is that there are workers who are displaced that will not find other good-paying jobs,” he said at the time. “I am actually quite worried that there are so many opportunities… we will not have enough workers to fill the jobs.”
But Alberta Environment Minister Sonya Savage was quick to declare her opposition to anything called a “just transition”, and Notley followed up last week by blaming both Premier Danielle Smith and Prime Minister Justin Trudeau for the province’s continuing job crisis. She urged Ottawa to cancel the just transition bill and abandon its call for the fossil industry to reduce its greenhouse gas emissions 42% by 2030.
A final version of the federal oil and gas emissions cap isn’t expected until later in 2023. But the Pathways Alliance, whose six members account for 95% of Alberta’s oilsands production, is already declaring that it won’t be able to meet the 2030 target until 2035 at the earliest. Even that delayed result would hinge on lavishly-subsidized carbon capture and storage (CCS) technology that is still costly and unproven at scale.
With a provincial election call “literally three months away,” Notley told Calgary Herald columnist Don Braid her “fiercest” criticism was for Smith’s “chaotic, incompetent, and conflict-focused” government. But she also called on Ottawa to “put the brakes completely on its legislative plans for this spring with respect to the sustainable jobs legislation, as well as plans for the emissions cap.”
Albertans “are in what I would describe as a crisis right now, in that we have a federal government about to move forward on legislation that has wide-ranging consequences, particularly to the people of Alberta,” she said. “The federal government by no means gets away with no blame, but neither does the provincial government.”
Earlier last week, Smith said she had a “pit in her stomach” after news reports on a federal briefing note suggested the just transition would cost hundreds of thousands of jobs. “But the federal government said those numbers had been misinterpreted, and that the figures referred to the overall size of the work force of various industries, not anticipated job losses,” CBC wrote.
“The federal government’s approach to sustainable jobs is about creating jobs, not eliminating them,” Wilkinson’s press secretary, Keean Nembhard, told the national broadcaster in an email.
Later in the week, Cenovus Energy CEO Alex Pourbaix weighed in with the notion that a just transition would actually translate into a boom in oilsands extraction, leading to 35,000 new jobs if companies hit their 2050 net-zero target.
“We estimated that we will spend somewhere in the range of C$70 billion over the next 30 years to decarbonize the production of the oilsands,” he told The Canadian Press. “If we’re successful in doing that, that is going to create a boom in the oil-producing provinces that is equivalent to what happened in the ’80s and the ’90s.”
But the Pathways Alliance has already made it clear that the $24.1 billion it’s proposing to spend on a new carbon capture hub and other emission reduction projects will depend on further taxpayer funding. On Friday, Bloomberg News reported that Canadian fossils “see a chance to secure a steady stream of government aid as Prime Minister Justin Trudeau pledges to keep Canada competitive with the massive clean energy subsidies on offer in the U.S.”
Their immediate target, Bloomberg said, is a share of a $15-billion Clean Growth Fund unveiled in the 2022 federal budget.
But while MEG Energy CEO Derek Evans and other industry executives talked to Bloomberg about making Canadian oilsands bitumen “the globally preferred barrel of sustainable oil,” independent analysis shows they have a long way to go. As recently as October, 2021, a Canadian oilsands operation showed up as the most carbon-intensive entry in an index of major oilfields around the world, compiled by S&P Global Platts.
The Pathways Alliance pitch also comes at a time when global oil demand is set to peak by 2030, then go into a steady decline. Late last year, the Pembina Institute reported on future demand scenarios from five different institutions and fossil companies, all of which “appear to demonstrate the inherent risks involved in investing public or private capital in an industry facing demand challenges.”
All of which leads back to the tempest over just transition legislation and how to drive down emissions without putting fossil fuel workers and communities at a disadvantage.
“Bad transition policies flow from denying that the shift away from fossil fuels is happening,” wrote Greenpeace Canada Senior Energy Strategist Keith Stewart, in an opinion piece last week for the Edmonton Journal. “What we’ve learned is that good transition policies are about making decisions with people, not for them. It’s about looking at who—workers, communities, and Indigenous nations—might be affected by the energy transition and how. It’s about listening to their fears, but also their visions of possible futures. In spite of the premier’s rhetoric, most Albertans believe that the transition away from oil and gas will be good for their economy in the long run.”
He added that the chances of the federal legislation working out well for Alberta “would rise dramatically if the provincial government would at least talk about how to deal with the transition to a low-carbon economy, rather than sticking their fingers in their ears and denying it could ever happen.”