The World Will Have to Pry Oil Production From Alberta’s Cold, Dead Hands

Danielle Smith, the premier of Alberta — home to Canada’s tar sands — is fiercely contesting the world’s shift to cleaner energy sources. The fossil fuel industry reigns supreme in the province, and Smith is doing her best to prevent a just transition.

Danielle Smith, premier of Alberta, speaks during a ministerial round table: "Is the World on Track to Reach Net-Zero Emissions on Time?" on September 19, 2023, in Calgary, Canada. (Artur Widak / Anadolu Agency via Getty Images)

In a race against reality, Alberta premier Danielle Smith is challenging an International Energy Agency (IEA) report that says the world will reach peak oil demand within a decade. She claims the organization is “no longer credible,” seemingly because it reached a conclusion that doesn’t cohere with her worldview.

The IEA report indicates that, based on current policies of international governments, renewable energy is poised to produce half the world’s electricity, with wind power investment tripling that of coal and natural gas. Smith, however, told the Edmonton Chamber of Commerce that she prefers to get her analysis on energy markets from the private sector — no doubt because they will tell her exactly what she wants to hear.

Canada, which has the world’s third-largest oil reserves after Venezuela and Saudi Arabia, is a laggard when it comes to the international energy transition, and Smith would like to keep it that way. The IEA analysis reveals that global spending on clean energy reached CAD$1.74 trillion in 2023, nearly doubling the $1.05 trillion spent on fossil fuels. But in Canada, only $2.04 billion was invested in solar energy, a stark contrast to the $27.93 billion allocated to oil and gas investments. Moreover, Canada is set to lead the world in oil production growth next year.

Justin Trudeau’s federal government is at least making half-hearted efforts to change this balance of power by attempting to mandate a clean electricity grid by 2035 and cap emissions from fossil fuels. The Alberta premier, meanwhile, is doing her darndest to ensure the continued dominance of fossil fuels for as long as possible.

Fighting the Feds

An Alberta premier fighting the federal government is as Albertan as the Calgary Stampede, which is to say, it plays to caricatured type. But Smith has elevated this tradition to an art form with her government’s authority to veto any federal legislation it deems unconstitutional, a power she obtained with her inaugural piece of legislation as premier.

At September’s Carbon Capture Canada conference in Edmonton, Premier Smith said the “Alberta’s entrepreneurial spirit” is being “hobbled” by the federal government’s net-zero target, which she falsely conflated with its clean electricity mandate.

She noted that Alberta’s net-zero target of 2050 is shared by the European Union, South Africa, and Australia, among others. But it’s also shared by the federal government. The clean electricity goal is simply a stepping stone on the federal government’s path to net zero.

Achieving a net-zero electricity grid in Canada within twelve years is eminently doable. The country is already 80 percent of the way to this goal, as most provinces generate electricity from hydroelectric, nuclear, wind, and solar sources. However, Alberta, Saskatchewan, New Brunswick, and Nova Scotia stand out as exceptions, with Alberta relying on fossil fuels, primarily natural gas, for 90 percent of its electricity.

Smith launched an $8 million “Tell the Feds” ad campaign, with ads in Alberta, Ontario, New Brunswick, and Nova Scotia. The campaign warns that people will “freeze in the dark” if a net-zero electricity grid is achieved by 2035.

Much Ado About Nothing

Alberta, meanwhile, is proposing to magically transform its entire economy and achieve net zero by 2050, likely relying on theoretical carbon capture, utilization, and storage (CCUS). Unfortunately for Smith, this technology does not currently exist at the scale needed to counteract fossil fuel emissions while at the same time leaving numerous questions about what will be done with all the sequestered carbon.

Federal environment minister Steven Guilbeault, a former environmental activist who once scaled Toronto’s CN Tower, then the world’s tallest building, to protest Canada’s reliance on fossil fuels, now aligns with Smith regarding the purported potential of CCUS.

He’s been clear that electricity grids will be able to rely on fossil fuels, provided that 95 percent of their emissions are siphoned away by CCUS technology. “What we’re talking about is not a fossil fuel–free grid by 2035; it’s a net-zero grid by 2035,” Guilbeault emphasized during the unveiling of Ottawa’s proposal for green energy earlier this summer.

The difference between the positions of Smith and Guilbeault lies in the fact that, for the environment minister, the goal is to use CCUS to buy time while outlier provinces integrate more renewable energy into their power supply. The critical question is whether there is any time to buy in the face of a worsening climate catastrophe.

For Smith, boosting CCUS is her best shot at maintaining business as usual while providing the appearance that the province is making progress toward decarbonization. “This is not about transitioning away from oil and gas,” Smith assured Carbon Capture Canada delegates. “It’s about transitioning away from emissions . . . while exporting more oil and delivering more energy.”

Renewable Energy Approvals Thrown Into Disarray

Smith’s surprise decision last summer to halt approvals for new renewable energy projects for seven months, at a time when Alberta was leading the country in new fossil fuel projects, is part of another strategy to ensure the continued predominance of fossil fuels in Alberta for the foreseeable future.

The ostensible purpose of the decision is to give the province’s utilities regulator time to determine where renewable infrastructure can be built, how increased renewable development impacts the province’s power grid and what happens once these installations stop producing energy. But the whole production is an unnecessary gesture because Alberta’s regulator never requested a moratorium on renewables.

A key concern among rural landowners, one which Smith has cited in defense of her erratic policy, is fear that renewable energy companies will simply walk away from any cleanup obligations after the life span of their windmill or solar panel is complete. But this is an issue that already exists on a much greater scale for oil and gas projects, with anywhere from $58 billion to $260 billion in cleanup costs required for thousands of pieces of abandoned fossil fuel infrastructure across the province and companies are unwilling to foot the bill, despite record profits.

It’s inconceivable that the government would introduce a seven-month moratorium on fossil fuel project approvals while it seeks to address this much more urgent problem. That’s because in Alberta, fossil fuel companies rule the roost.

In the wake of the pause’s announcement, University of Calgary political scientist Lisa Young observed that pausing renewable energy production “makes the statement that it’s impossible to achieve a net zero power grid by 2035 that much closer to being true.” In other words, Smith is setting the stage for a self-fulfilling prophecy, suggesting that the energy transition underway worldwide is unworkable in Alberta. And by the time it’s clear enough to Albertans that they’ve been left behind, it may already be too late.