Alberta rejects international consensus on energy, climate at its peril

Alberta must never forget Obama’s rejection of Keystone XL that was mostly about climate politics

In Monday’s column I argued that if newly chosen Alberta PC leader Jason Kenney becomes premier, he cannot return to the good old days of 2006 when he was a member of Stephen Harper’s cabinet and climate policies were, at best, an afterthought. Predictably, some Alberta readers argued that Kenney can indeed simply say no to carbon taxes, etc. The international consensus on decarbonization puts the lie to that argument.

Oil and gas boosters love to mock the idea of the Energy Transition and the Paris Climate Accord. Most of them think global warming is a hoax and carbon dioxide is just more plant food. Good for the canola crops, eh?

They dismiss what they don’t understand or don’t care to accept.

Global energy companies beg to differ. Royal Dutch Shell, Chevron, Total, Statoil – all the super-majors have accepted the basis tenets of climate change and support mitigation policies, including a carbon tax. Even ExxonMobil, a long-time financial backer of climate denial groups, has reversed course.

The international consensus on energy and climate has two parts:

One, decarbonize as much as possible the existing energy system based on fossil fuels. In particular, replace coal power plants with some combination of natural gas, wind, and solar. But the strategy also includes energy efficiency measures for residential and commercial buildings, higher fuel economy standards for gasoline-powered vehicles, and electrifying industry (which consumes 40% of global energy production).

Two, develop clean energy technologies that will, by 2100, replace most of the current fossil fuel burning technologies. We’re talking electrification of transportation, alternate fuels like hydrogen, high density storage batteries, smart grids, as examples of emerging technologies. Despite what eco-activists claim, clean energy technologies are immature, not ready for primetime, and at the very bottom of the diffusion S-curve. But the important point here is that they are on the curve and slowly making their way up toward tiny market shares that will grow over many decades.

Like most things international and intensely political, the energy and climate consensus is patchy and understood differently by many of the players. And some, like Russia, are barely paying lip service.

Be that as it may, Alberta needs to heed the message of Saudi Energy Minister Khalid Al-Falih delivered during a keynote speech to global energy leaders recently in Houston:

As for the evolution of the global energy mix, the costs of alternatives like renewables and electric vehicles are declining as their technologies and performance improve. In the future they will claim a greater share of a growing global energy market—and we welcome their contributions. But we all know that energy transformations are complex phenomena that take considerable time to unfold.

Prime Minister Justin Trudeau also delivered a very important speech about “energy transformations” at CERAWeek 2017:

While developing our resources for the economic benefit of Canadians, we must also look to the future…there will come a day, far off, but inevitable at some point, when traditional energy sources will no longer be needed. In preparing for that day, we have two critical responsibilities. One is to sustain the planet between now and then so we can pass it on to our children better than we found it. And the second is to get ahead of the curve on innovation.”

I could fill a book with quotes in the same vein from other national leaders and energy players, including domestic ones like the Canadian Assoc. of Petroleum Producers. You get the picture.

So, here’s the point for hardheaded Albertans still pushing back against decarbonization policies: You’ve already lost this battle.

And if you hope that at some point in the future a different government undoes Alberta’s climate policies, you need to keep in mind there will likely be consequences.

For starters, the Canadian government under the Trudeau Liberals have imposed a national carbon tax. Repeal the Alberta carbon tax and the feds will just replace it with one of their own design.

And perhaps other climate policies, as well; the 40 per cent fugitive methane reduction, for example.

Another point to consider: the global market is currently awash with cheap oil. Analysts differ about how long that will continue given the lack of exploration investment in the past few years and the growing demand from Asia, but customers have alternatives to Alberta crude if the province is seen to be recalcitrant on climate policies.

Remember Keystone XL? A big factor in President Barack Obama’s decision to reject the pipeline project in 2015 was then Prime Minister Harper’s tepid attitude to climate policies, as well as his aggressive lobbying of Washington on TransCanada’s behalf.

Turns out saying publicly that Keystone XL was a “no brainer” actually carried consequences.

Let’s not have a repeat of Keystone XL in Asia or with the Americans in another four or eight years, shall we?

Alberta can bicker about how to meet climate policy expectations and there is nothing saying that a right of centre government led by Jason Kenney or Brian Jean couldn’t implement a different suite of policies.

But “no” is not an option.

Alberta simply cannot afford to be outside the international consensus on energy and climate. To do so courts future consequences from those nations, particularly future markets in Asia, that operate (more or less) within the consensus.

The many Albertans that reject the carbon tax, the very idea of anthropogenic global warming, the Energy Transition, and think the old status quo is just fine thank you very much, have to get with the times.

Now is not the time to be provincial, parochial, and backward. Get it together, Alberta.