“They pushed us to the limit,” Danielle Smith says in fighting oil and gas emissions cap

Two months ago, Saskatchewan started a similar move

EDMONTON – With a looming federal oil and gas greenhouse gas emission cap threatening to drastically curtail the largest industry in the province, Alberta is fighting back, two months after Saskatchewan started down a similar path.

On Sept. 24, then-Saskatchewan Minister of Justice and Attorney General Bronwyn Eyre announced Saskatchewan’s Economic Impact Assessment Tribunal’s report on the proposed emissions cap, noting it could lead to up to 52 per cent reduction in Saskatchewan oil and gas production by 2050. The Tribunal was a product of the Saskatchewan First Act. The Tribunal’s findings are meant to provide Saskatchewan with ammunition to fight the emissions cap. While no actions were mentioned during the Monday Saskatchewan Speech from the Throne, if Saskatchewan is to pursue similar legislative action, it will likely happen during the current, brief two-week legislative session.

On Nov. 26, it was Alberta’s turn. The Alberta government passed its own version of a bill meant to fight what it considers Ottawa’s overbearing climate change initiatives, including the emissions cap. So on that day, Alberta Premier Danielle Smith said her government would “introduce an Alberta Sovereignty Within a United Canada Act motion to stop a federal cap from infringing on the province’s distinct jurisdiction and killing good-paying jobs. The resolution asks the legislative assembly for approval to take a series of swift, effective actions designed to protect Alberta if the production cap ever becomes law,” according to the press release.

Smith said in response to a question at the press conference in Edmonton, “Well, look, they pushed us to the limit. We’ve been trying to negotiate with them now for ever since the moment I had my first conversation Justin Trudeau, where I told him that we wanted to align with their objectives to reach carbon neutrality by 2050. And we’ve had multiple letters, multiple meetings, we’ve had tables of Deputy Ministers together, and it’s all been for naught.

“And so we’re now at a point where we have to take action. So the structure of the Sovereignty Act is we put a motion towards the Legislature to get an agreement in principle to develop the legislative framework to do these things. So some of them can be done through policy. Some can be done through regulation. Some of them will have to bring legislation back into Legislature in the spring. But we want the Legislature to fully know our intentions, and all of the ways in which we’re going to defend our constitutional rights to develop our resources,” Smith said.

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Feds, stay out!

Those actions are extensive. They essentially would forbid the federal government from gathering any data on which to base their regulations.

Smith said, “The motion we’re putting forward in the legislature uses the Act to ask the Legislative Assembly for approval to shield Alberta if the production cap becomes law. These actions could include an immediate constitutional challenge in the courts, a ban on provincial bodies enforcing the cap, labeling oil and gas production facilities as ‘essential infrastructure,’ subject to the Alberta Critical Infrastructure Defense Act, prohibiting the entry of all individuals into these facilities, except those licensed to enter by the Alberta government, and declaring all information related to greenhouse gasses at these facilities to be owned by Alberta’s government, with data reported or disclosed at our discretion.

“This is not a complaint list of everything we plan to do, but it’s a sign of things to come. It shows how we will respond if the federal government forces us to do so. If the motion passes, we’ll act fast to get ready for Ottawa’s destructive cap. Alberta’s expect no less, will defend Alberta’s prosperity, Alberta’s livelihood and our energy industry.

“This motion marks an important step in our push back against federal overreach. We’re telling Ottawa your cap goes too far. This is not the way federal-provincial relations should be. It’s certainly not the way we want them to be. We would much rather cooperate with them for the sake of a cleaner environment and stronger, more prosperous nation. We could have both, if they would just listen to reason. And they’ve chosen their path, so we’ve chosen ours, and the fight will continue for as long as it has to. And it’s not only us who are standing against this cap. From the moment the federal government release their regulations, businesses and organizations have been standing in opposition, like Eric Nutall, who is senior portfolio manager at Ninepoints partners, who said, and I quote, ‘Look around the world, no other major oil and gas producer is doing what we’re doing. It behooves us to take a moment and ask, Well, why is that? It’s economic idiocy.’

“And François Poirer, the CEO of TC energy, who said, and I quote, “An emissions cap, which will act as a cap on domestic production of natural gas, will harm Canadian families and businesses by raising prices on energy.”

“And Colleen Collins, VP of Canada West Foundation, who said, the cap is, quote, “A significant intrusion on provincial management of resources.”

“Albertans are relying on us to stand firm on this, and we will not let them down,” Smith said.

The entire press conference can be seen in this X post. Advance to time 3:30 for the opening remarks

https://twitter.com/ABDanielleSmith/status/1861534144645206349

 

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Actions

The accompanying press release listed these actions:

 

The motion proposes that the government launch an immediate constitutional challenge when, or if, the federal production cap becomes law. It also instructs the government to consider passing legislation, amending provincial regulations or taking whatever other steps are needed to:

• Ensure that no provincial entity participates in the enforcement or implementation of the federal cap.
• Ensure that all interest holder oil and gas production facilities and related infrastructure in Alberta (Interest Holder Facilities) are ‘essential infrastructure’ subject to the protections granted under Alberta’s Critical Infrastructure Defence Act.
• Prohibit entry by any individual, including any federal official or contractor, onto any Interest Holder Facilities, excepting any interest holders, employees and contractors, and those specifically licensed to enter by the Government of Alberta.
• Declare all information that is directly or indirectly related to greenhouse gas, collected at Interest Holder Facilities, as proprietary information exclusively owned by the Government of Alberta, and mandate that all emissions data be reported and disclosed at the province’s discretion.
• Effectively sell conventional oil through the Conventional Oil Royalty-in-Kind program, and work collaboratively with industry to implement a Bitumen Royalty-in-Kind program for bitumen, and develop a similar program for natural gas, if necessary.
• Work collaboratively and proactively with other provinces and territories, the United States and First Nations to double oil and gas pipeline capacity to tidewater and the United States of America.

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Alberta’s oil is its own to control

Smith explained that as the Province of Alberta owns the resources, effectively it is theirs to control. And asserting that control is one method of preventing federal control, including via an emissions cap.

She noted, “One other aspect of it is taking our bitumen royalty in kind, our conventional oil  oil royalty in kind, our natural gas royalty in kind, and then using our Alberta Petroleum Marketing Agency to market our products directly as a way, not only of being able to meet the needs of some of the supply some of the consumers from around the world who have come here asking us to do this, but we think it also might be a way for us to be able to work with our American friends and counterparts, to be able to provide them the security that they need for the North American energy security policy. So that’s another aspect. Is a plan that  has been in in place for some time. APMC was established in 1973 under Peter Lockheed, under similar circumstances, to take ownership of the resource in order to put up that constitutional shield.”

She added, “The federal government forced us into this. They’ve made it impossible for private sector companies to be in compliance with the law without running afoul of C 59 if they even tout what their emissions reduction successes are, they could be found criminally responsible. And so they actually created the situation where we have to find a way to be able to do reporting on our emissions reduction because they have given a car vote to the province. So that would be number one, we’re responding to Bill C-59 which prevents the companies from talking about their environmental records. But number two, most Albertans know that they own the resource. It is owned by the Government of Alberta, and it is stewarded on their behalf by us. We hire companies to partner with us to develop our resource for the benefit of Albertans, and in return, they pay royalties and other fees for the mutual benefit of doing so. So as our contractor, we will make it a condition of their license that they report their emissions data to us as the owner, and then we will share it in a way that’s compliant with the law.”

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Smith spoke of selling America oil to refill its depleted Strategic Petroleum Reserve. That reserve’s purpose is to provide the United States a backup supply in time of war, but it has has been substantially reduced in volume under the Biden administration as a way to lower gasoline prices.

Smith said, “They need some of our heavy oil for that. So for us to be able to potentially negotiate a contract with the Department of Defense to ensure that they have the long term energy security they need, that might be one of the things that we they would like us to do. Governments like to deal with other governments.

“We also have a couple of other international jurisdictions that have come to us to seek long term supply agreements of our bitumen, especially now that we’re able to get it off the coast with TMX, they have approached private sector companies, and the other private sector companies have chosen not to do that. So that would be another one.

“A third one might be especially with natural gas, being able to provide a secure supply of natural gas to data centers. They need the power generated from natural gas to be able to establish data centers. That might be another thing that we would do. So there are multiple ways in which I could imagine that we might be able to exercise that authority.”

Shades of the National Energy Program

Asked what the connection was between marketing and the oil and gas cap was, Smith said, “Part of what are the way our governments work is that one level of government can’t tax another.

“We are asserting our ownership over our oil and gas resources. And if you go back to how Peter Lougheed won his battle in the first go round with Justin Trudeau’s father, it was by creating, by drilling oil wells or gas wells so that and establishing a company, so that they could establish that they had the ownership right to prevent the federal government from imposing the NEP. So, Peter Lougheed already created all of these mechanisms in the first fight. NEP was, of course, repealed in ’84.

“We’ve had a relatively constructive relationship with our federal counterparts until now, and because we’re seeing the same kind of behavior towards our sector this time, I think, in which would be incredibly damaging and reduce production, we’re going to use those same constitutional tools and legislative tools in order to be able to protect our constitutional rights.”

 

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