By July 4, 2017 Read More →

Notley energy report card: Progressive Conservatives give D grade

report card

PC MLA and Energy Critic Rick Fraser gives NDP D report card Source:

Under a United Conservative Party banner, “the carbon tax will be done” – Rick Fraser

School’s out and the Alberta NDP government of Rachel Notley is just past its midway point. It’s time for opposition parties to hand out their mid-term report cards on how the NDP have done so far on energy policy.

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This week, we interviewed Progress Conservative Party energy critic and MLA Rick Fraser. Let’s look at the good, the bad and the downright ugly.

Jude: Can you comment on Sturgeon Refinery audit Alberta Party Leader Greg Clarke put forward and PC stance on that?

Rick: Couple of things. Refining is not cheap. People focus on that, doesn’t matter what jurisdiction it is. If it was easy, everyone would be doing it.

We are in a world where there’s a paradigm shift moving to cleaner fuels. From the perspective of the refinery, people are getting some of the numbers wrong. For the Alberta taxpayer to carry the biggest burden, it means the refinery has to fail where it cannot upgrade the bitumen to diesel which is a next-to-none scenario.

Other part is talking to people who did the science and engineering (some people are not). It’s frustrating. Albertans have been asking us why we picked projects like this one. The partnerships we’ve developed with these groups and the finance structure, it’s unique. Ultimately it’s a benefit to the toll payer. In the end, we’ll see benefit in revenue.

In a carbon-restrained world and different countries looking to different players for cleaner fuel, what if our bitumen was no longer accepted around the world? We have the ability to refine it into something desperately needed around the world, diesel. Look at the Conference Board of Canada study.

Jude: I did a story on the study recently, spoke with them.

Rick: It’s unfortunate people are using this as a political football without knowing entire facts, that’s why you need to rely heavily on the experts. My question to Greg Clark or Drew Barnes, what are their solutions when it comes to our industry? Because of our unique product, we already have to send it to certain places to be refined.

Jude: If  PC and Wildrose parties merge, how would energy policies play out? Mish-mash from both parties? Entirely from scratch?

Rick: Valid questions and ultimately it’s up to the membership. From a very high-level perspective, I’m for promoting energy policies that first benefit Albertans, and may come over the long haul.

Nothing is overnight, but allow the market to thrive versus constrain it. We can’t walk away from environmental issues and energy issues where they coexist. Jim Prentice used to say, “if you’re in the energy business, you’re in the environment business. “

Electra MeccanicaAlberta has a strong track record We were first jurisdiction to put a carbon price on heavy emitters, as we evolve as an energy producer and technology gets better, we can be a key player moving forward.

Jude: Oil Sands Advisory Group, what are your thoughts on the recommendations?

Rick: From our perspective, some of that was always written into legislation as thought gaps. The major players when it comes to 100 megatonne cap, they’ve been behind that. We hope they actually had consultation with those groups but the 100 megaton cap will ultimately hurt small to mid-sized producers when it comes to cost.

In many cases the minister does carry a lot of weight and whatever the minister does and this particular energy minister along with the environment minister and cabinet needs to be more concise and more clear with the decisions they’re making in cabinet on behalf of Albertans.

How are those policies and decisions going to create sustainability long after they’re gone, long after Rick Fraser’s gone as an MLA?  They’re going to be a few generations that will deal with the ramifications of policies made today.

The Minister needs to be clear on what specifically, if they were to approve or not approve any projects.

I think I speak on behalf of our caucus and industry that businesses are best at doing business. Government can play a role, partner, but in some of cases, this government has been too slow on how to be a partner in the energy business.

Jude: What’s your take on the carbon tax?

Rick: There was always a plan with heavy emitters to move to $20 (heavy emitter tax). They knew it was something discussed. Adding the carbon tax at the end of the day, it’s passed onto the consumer. From a carbon tax perspective economy-wise, and the carbon tax structure, our party never supported that.

Rick Fraser, PC energy critic and Calgary MLA.

Jude: Do you think it be done but just not the way the NDP did it?

Rick: I don’t think it’s politically sustainable. Under a united banner, the carbon tax will be done. The challenge will be what program would be next to support things like energy efficiencies and trying to incentivize new technologies to make electricity generation, oil sands, mining and general drilling, etc. to be more environmentally friendly and more economically sound.

Jude: Energy Efficiency Alberta, what do you make of their consumer, commercial incentives and job so far?

Rick: There are some things that make sense. The way they structured their climate change plan, it’s too piecemeal, and I think they’ve been coming up with the plan as they go. The light bulb is an excellent example, we’re creating government-funded jobs and whether they’re going out of jurisdiction is one issue but secondly, Albertans are generally responsible. If you just bought these light bulbs and kept your receipts and it’s something off your taxes.

But to have somebody come and install them, I think it’s just a ridiculous notion. When it comes to solar panels, we’ve had that in the past where companies get a rebate but it’s unclear how much comes from the carbon tax revenue. They continue to go back to that.

My worry is there’s not enough money in that well by the time you have rebated everybody, it’s just not sustainable. If you’re rebating money to people, how is that encouraging them to curb their carbon tax?

Make it revenue-neutral. You reduce your income tax, replace it with a carbon tax and folks will understand that by reducing your emissions and personal footprint, you’re going to save a couple hundred bucks on your taxes by engaging in better practices. As it stands now, it only taxes a certain group of people and quite frankly, it’s an attack on middle-class families.

Jude: What about the electricity file? The system with the PPAs, the coal plant phaseouts…

Rick: They’ve got themselves in quite a bit of trouble. It was purely politically motivated. Whether you believe phasing out coal is the right things to do, first of all, we all did. And all conservative governments, even federally, felt that at some point we needed to phase out coal, and there was a plan in place.

Lots of these plants would’ve been phased out anyways, but to accelerate it and to vilify it, politicize it was offensive. I’ve talked to many of those coal town mayors and they’re wondering “What’s next?”

There’s been very little dialogue directly. There’s issues with the balancing pool, there are issues and they’re backpedaling at a furious pace. And when you have industry saying, “We’re going to phase it out even sooner because it’s better for our bottom line”, who does that hurt?

That hurts people in those towns. The government sparked this off without understanding unintended consequences. Unfortunately for the folks in these towns and cities that are affected by the coal phaseout, they’re going to be hurting.  The taxpayer right might be on the hook for that.

The best policy is for them is to slow down.  Engage a little bit more and make sure that at the end of the day it’s absolutely the right decision at the right time. 

I’m sure in private those ministers and the new premier, they’re recognizing being the government is not easy and you only have so much money to work with.

You are directly responsible for the overall outcomes. Now there’s no perfect government but if they continue to go down this path, the ideological “we are going to do it no matter what the cost”, it’s problematic.

Even the head of their climate leadership plan said, “If you do that, investment will flee and you’ll be in a very difficult spot.” Hopefully, they’re paying attention and will start to curb this political football game they’ve been playing with energy and with other issues.

Jude: Would a good example (political football) be the electricity price rate cap?

Rick: They put the cap on it while we pay a very low price, but two things. They basically showed their hand to producers what they’re willing to pay. Secondly, when it goes above that, who’s paying? It’s still the taxpayer, it’s still the rate-payer. You’re not seeing it on your bill, you’re just paying for it somewhere else.

Jude: Their mid-term report card, overall?

Rick: A ‘D’. I think there are good initiatives and there could’ve been a healthier conversation about how to shift paradigms in a carbon-restrained world. But many policies they pushed through, there is no consultation, almost none.

They will pass the bill and then consultation. That says they’re either being dictated by politics which is likely the case and/or the department. That never plays well for the people. When it’s all about politics, it’s rarely about the people. That’s why I give them a ‘D’.

They followed a playbook that the progressive conservative government had and our failing was we didn’t follow through with some of these things when we should’ve. The success they’ve had was because we had it on the books(capacity market) and some other things. 

Jude: Any final thoughts or something we didn’t cover?

Rick: When governments put politics before people, that’s obviously detrimental to the people and secondly, the government needs to come up with more sustainable ideas in partnering with the energy companies and better creating policies that are sustainable politically, economically and socially.

I’ve had the good fortune of industry partners and people help educate me. You don’t always get it right but I think if we’re having a healthy, robust discussion around of these things eventually we’ll get to the right spot. I’ll keep trying to do the best job I can and hopefully I keep my job.  

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