Re-elected Alberta Premier Danielle Smith sets out energy battle lines

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Seize a seat and prepare, the subsequent spherical of the Alberta-Ottawa vitality struggle is about to start.

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On the finish of her victory speech Monday, UCP chief Danielle Smith threw some verbal grenades in Ottawa’s route over its controversial vitality coverage.

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The incoming federal emissions cap on the oil and gasoline sector and Justin Trudeau’s authorities’s plan for a net-zero electrical energy grid by 2035 are actually squarely within the sights of Smith’s newly re-elected authorities.

“As Premier, I can not underneath any circumstances enable this meant federal coverage to be inflicted on Albertans. I merely cannot and I will not,” she declared.

“I invite the premier to as a substitute cease the introduction of this dangerous coverage and are available to the desk in good religion to work with Alberta on an vitality liberation technique.”

These phrases, coming simply moments after defeating the NDP within the 2023 basic election, will draw the subsequent battle strains with the Trudeau authorities over vitality: how greatest to decarbonize oil and gasoline manufacturing in Alberta this decade, and methods to swap to a net-zero electrical energy system inside a dozen years.

These are essential financial and environmental points for a province that comprises the world’s fourth largest oil reserves and an electrical energy system that depends on pure gas-fired technology to maintain the lights on.

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“It was actually combative and he or she did not point out the sovereignty act, however I anticipate it for use in a short time,” stated Mount Royal College political scientist Duane Bratt.

“Particularly.”

The stakes are excessive for each side.

The federal authorities has set a goal of reaching internet zero by 2050, however would not have a lot time to satisfy its aggressive 2030 objectives.

Its emissions discount plan predicts a 42 p.c discount in greenhouse gasoline emissions from the oil and gasoline sector (from 2019 ranges) by the top of this decade.

Smith argues this can successfully change into a manufacturing minimize.

The sector is the biggest emitting business within the nation, though many firms have adopted net-zero targets, together with the biggest oil sands producers.

Alberta wants to draw billions of {dollars} of funding to rising areas of decarbonization, and federal and provincial cooperation will likely be wanted to make that occur.

Smith started her victory speech Monday evening by referencing former Progressive Conservative premier Ralph Klein in 1993, declaring, “Welcome to a different miracle on the prairies.”

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If we will flip to the historical past books, it is value noting the various scraps Klein had with the liberal authorities of Jean Chretien over the Kyoto settlement.

But Klein’s authorities additionally struck a take care of the federal authorities within the Nineteen Nineties to create a brand new tax and royalty regime for the oil sands.

This triggered a wave of funding within the oil sands – an astronomical $262 billion in capital spending between 1996 and 2015 – and ignited a growth part that generated billions of {dollars} in royalties and created 1000’s of jobs.

Adam Legge, president of the Enterprise Council of Alberta, stated the group is anxious about each the emissions cap and the net-zero electrical energy commonplace, calling them “flawed public insurance policies.”

“What we have been encouraging the federal authorities to do is be versatile,” Legge stated. “If they’ll dig of their heels, I feel we’re (in) for a big battle.”

The following few months will present how large the gulf between the 2 sides actually is as Ottawa strikes ahead with its oil spill emissions cap and the incoming Clear Electrical energy rules.

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In Alberta, pure gas-fired technology accounted for about 60 p.c of the province’s complete put in technology capability final yr. Decreasing emissions from such services will likely be crucial – however probably costly.

Take city-owned Enmax Corp., which has about 1,500 megawatts of producing capability, with 1,300 MW coming from its gas-fired services.

The native utility is investigating the feasibility of a carbon seize unit at its Shepard Power Heart. It’s also taking a look at monetary assist accessible from the federal authorities to scale back the danger.

“If the federal authorities needs to satisfy a coverage purpose of 2035, it should not be on the expense of taxpayers and Calgarians,” Enmax CEO Mark Poweska stated Tuesday after the corporate’s annual assembly.

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“We will likely be taking a look at how can we make it economical for our prospects, whereas on the similar time attaining coverage objectives?”

Likewise, the oil patch is not in search of a rumble over federal coverage, however it needs an open dialog between the business and each ranges of presidency within the coming months.

“The underside line is that there is no such thing as a technical option to meet that restrict, the emissions restrict, with out decreasing manufacturing,” Brian Schmidt, CEO of Tamarack Valley Power, stated in an interview.

“I simply assume the cap was introduced with out actually understanding its implications. . . The reply is cooperation.”

There are additionally massive vitality initiatives on the drafting board, however will doubtless want a joint federal-provincial incentive program to make them economical and aggressive with current US subsidies.

In Ottawa, federal Pure Assets Minister Jonathan Wilkinson advised reporters he would work with Alberta to scale back emissions and construct a powerful economic system.

“I am not in search of a battle with Alberta or with Nova Scotia or British Columbia, I am interested by working collectively,” he stated.

The proof will come when the ultimate guidelines and rules on these vital insurance policies are launched and put into place.

The day after the election, Smith did not give an inch.

Talking to QR radio host Shaye Ganam, Smith stated she would communicate with the premier later within the day, however indicated that Alberta is bracing for a conflict over the net-zero grid requirement and the emissions cap.

“There is a large battle forward,” she stated.

In different phrases, seize a seat.

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com