Danielle Smith says Alberta is examining provincial carbon capture aid

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Premier Danielle Smith says the province is bored with being “the punching bag of the federal authorities,” blasting Prime Minister Justin Trudeau for suggesting Alberta ought to step up its monetary help to get carbon seize tasks constructed.

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Nonetheless, the premier additionally factors out that her authorities is contemplating measures that would assist such developments, together with an funding tax credit score or permitting petrochemical developments that embody carbon seize for use in Alberta Petrochemicals Incentive Program grants.

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Smith’s feedback come after Trudeau pushed the province to make use of its rising finances surplus to extend state help for brand new carbon seize, use and storage (CCUS) tasks.

“It is offensive for them to behave like in some way we have not invested on this space,” Smith mentioned in an interview, noting the province has put about $2 billion into carbon seize initiatives relationship again to the Stelmach -government 15 years in the past.

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“We completely have — and we are going to proceed to do extra.”

Chatting with Reuters final week, Trudeau mentioned Alberta was reluctant to “spend money on something associated to local weather change. However CCUS is a kind of tangible issues…

“I believe there’s a position for provinces with surpluses, with the power to spend money on their future and their staff’ future,” mentioned the prime minister.

Such phrases have sparked anger inside the provincial authorities, which is already gearing up for a battle with Ottawa over the oil spill emissions cap.

Billions of {dollars} in CCUS developments have been proposed within the province over the previous two years that may assist industries make carbonation.

Nonetheless, corporations haven’t moved ahead as Ottawa and the province wrangle over the extent of economic assist supplied by every authorities wanted to set off such massive capital investments.

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Alberta posted a $3.9 billion surplus final yr and expects to see the determine high $12 billion for the present fiscal yr. A examine by RBC Economics identified that the majority provinces reported vital finances surpluses final yr, together with Ontario, Quebec and British Columbia.

“We have now a first-rate minister who performs favorites and treats totally different elements of the nation otherwise,” Smith mentioned.

“That is the factor that I believe Albertans are bored with — is that we’re nonetheless the punching bag of the federal authorities and this Liberal premier for political causes.”

A press release Tuesday from officers within the workplace of federal Pure Assets Minister Jonathan Wilkinson took a conciliatory tone on carbon seize, saying it will work with Alberta and “welcome any additional funding on this know-how from the provincial authorities.”

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The rumblings about CCUS funding have been constructing for months.

In April’s federal finances, Ottawa created a brand new funding tax credit score that may cowl as much as 50 % of CCUS undertaking spending, although it was decrease than what the Canadian Affiliation of Petroleum Producers had requested.

The finances doc mentioned Ottawa will interact with provinces and expects them to additional strengthen monetary incentives to speed up the adoption of CCUS; the Kenney administration rejected the decision.

Because the federal funding tax credit score was unveiled, the US has elevated its personal incentives for CCUS initiatives, eclipsing Canada’s choices.

Michael Belenkie, CEO of Benefit Vitality Ltd. and subsidiary Entropy Inc., which continues carbon seize and storage developments, mentioned it was ironic to listen to the prime minister’s criticism. He famous that the corporate remains to be ready for particulars on the right way to declare the federal tax credit score and for Ottawa to offer extra certainty in regards to the future worth of carbon.

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“I do not assume the prime minister’s feedback have been essentially anchored in any information, a lot as a negotiating tactic to attempt to strain Alberta,” mentioned Belenkie.

The 2 sides might not be thus far aside.

Smith indicated the province is contemplating steps to encourage such decarbonisation investments. She requested Atmosphere Minister Sonya Savage to research the problem and report again “to see if there’s a want … for us to contemplate how we are able to shut the hole within the funding local weather between us and America bridge.”

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The province at the moment supplies grants to new petrochemical tasks by means of its APIP program and this may very well be expanded. Requested if the county would take a look at its personal funding tax credit score, Smith mentioned, “We’ll combine them, if attainable.”

Bob Masterson, CEO of the Chemistry Trade Affiliation of Canada, mentioned there are greater than $20 billion value of petrochemical tasks introduced for Alberta that require CCUS. Solely new developments are at the moment eligible for APIP grants.

Because the federal funding tax credit score was introduced, the brand new U.S. incentives have been strengthened and are actually value no less than 4 instances greater than Ottawa’s help, he added.

“The prime minister and the primary minister (have) been at barbs about who’s accountable for making this occur – and the reply is each,” Masterson mentioned.

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The Pathways Alliance, a bunch of oil sands producers that has arrange a $16.5 billion carbon seize and storage community in Alberta, has pushed for added incentives from the province.

“What we have not seen is a giant provincial program alongside the traces of the federal funding tax credit score, however frankly there’s been a scarcity of dialogue between the federal and provincial governments — that is been a part of the issue,” mentioned Pathways Alliance’s vice chairman Mark Cameron.

It’s crucial that Alberta and Canada compete to draw carbon know-how investments to satisfy incoming federal emissions targets. Nonetheless, the timing of any motion stays unclear.

“I requested Minister Savage to make a presentation to our cupboard and caucus earlier than we return into session. So, I do not know if that work will likely be accomplished in time for the finances,” Smith mentioned.

“But it surely’s a precedence for me.”

Smith wasn’t certain what the fee could be for both help program, although she mentioned the county’s Know-how Innovation and Emissions Discount Program generates vital funds that may very well be put to make use of.

Scott Norlin, an analyst at power consulting agency Wooden Mackenzie, mentioned the province not too long ago made adjustments to TIER that assist CCUS tasks and tapping into the fund for any future provincial help would make sense.

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com