Oil has been as emblematic of Alberta as the cowboy hat for generations; not just as the driver of the province’s economy, but as an integral part of its culture. Which makes the necessary transition to net zero by Canada’s oil patch not just an economic issue and a political issue, but an emotional one. Former Calgary MP Lee Richardson takes a dispassionate, optimistic look at how the province is evolving toward a new reality.

Lee Richardson

When international delegates at COP26 demanded an end of fossil fuel production, Albertans may have asked what the world would look like tomorrow if we suddenly ceased our oil and gas activities. That same question might have crossed the minds of British Columbia climate activists when just two weeks later, climate events caused the closure of the Trans Mountain pipeline carrying oil and gas to refineries in the Lower Mainland, disrupting daily lives.

Somewhere between the howls of “End oil production now!” and “Let them freeze in the dark”, moderates from each side are listening, finding middle ground. Alberta may be Canada’s largest generator of carbon emissions, but it may also be a key to Canada’s net zero solution. 

Canada’s low population, harsh climate, and huge geography contribute to per capita carbon emissions six times those of India, and 10 times per capita those of China as we argue the benefits of production and the growing demand for energy. Oil and gas still supply 80 percent of the world’s energy requirements for everything from transportation to food production, heating and cooling. 

While we have the luxury of considering how we could and should supply our energy needs, the developing world is captive to the existing energy sources, and justifiably feels that their economies should be able to grow, and their populations flourish, even as the goal posts of sustainable energy are moving. Demand for energy will persist, and it has to come from somewhere. 

In October 2021, crude oil production in Alberta reached its highest level on record – 3.84 million barrels per day. Production is up 200 percent in the past 20 years, while in that same period, emissions have increased by 50 percent. The trend is going the right way on an emissions-per-barrel basis, despite the absolute increase in our emissions. The issue is not production, but emissions. The goal of getting to net zero emissions has become an imperative, and must be pursued with the same entrepreneurial drive that created the industry in the late 1950s.

While industry has generally embraced this challenge, the current populist government in Alberta has erected barriers to positive action. Old paradigms die hard. Having long touted the “Alberta advantage”, predicated on cheap energy, the present government went all-in on a traditional economy denominated by oil and gas (and even coal, briefly), and promoted a narrative at odds with the undeniable move toward the low-carbon solution the world is seeking. 

A recurrent theme is the futility of Alberta reducing our emissions while other global producers do not take action. Suspicion and cynicism of our national government endure and provide an easy target. The outsized contribution of the fossil fuel industry to the Canadian economy is undeniable, and often used as the de facto reason to preserve the status quo. But strident views are being questioned and reconsidered. Provincial challenges to federal legislation have been muted by the Supreme Court ruling last March 25 that Justin Trudeau’s carbon tax is constitutional. 

Even as there are ideological undercurrents that shape a part of the provincial story, and in spite of sometimes petty political squabbles, successive Alberta administrations have taken practical and concrete steps to incentivize clean-energy initiatives.

From the vision of the Lougheed government with the creation of AOSTRA (Alberta Oilsands Technology and Research Authority) and the Alberta Heritage Fund to current Carbon Capture Utilization and Storage policies, the IEE (Industrial Energy Efficiency) grant program, TEIR (Technology Innovation and Emissions Reduction) fund and others, government programs have stimulated industry in reducing carbon emissions.

Industry too, has forged ahead with innovation to reduce emissions

and transformative technology in oil and gas exploration and production, low emitting electricity systems, low carbon industrial processes and products to reduce greenhouse gas (GHG) emissions in food, farming and forestry. Because of the new prominence of ESG targets on corporate scorecards, the finance industry has embraced investment in the green economy and provided the capital to spur more creative solutions. 

The focus on ESG has also resulted in more inclusive resource development, particularly with First Nations. True partnerships among industry, governments and First Nations from the outset of projects have provided opportunities for consultation, employment, and equity. Meaningful negotiations on the Trans Mountain pipeline led to the signing of comprehensive mutual benefit agreements with 10 Alberta First Nation communities and 41 in B.C. – including every First Nation on land the pipeline crosses. 

The approved route of the Coastal Gaslink pipeline in northern B.C. was determined after similar engagement and consultation with Indigenous, landowner and stakeholder input. Coastalgaslink.com noted, “After extensive consultation with First Nations people from various groups through that program, Coastal Gaslink initiated additional studies and engineering work to create the South of Houston alternate option to help further reduce of effects on traditional and cultural land.” That pipeline, connected to the TC Energy network, will transport natural gas from Alberta and northern B.C. to LNG Canada at Kitimat on the west coast, where it will be converted to liquified natural gas for export to Asian markets. This Canadian natural gas will contribute to reduced GHG emissions there by replacing higher carbon-emitting fuels such as coal.

In June 2021, Suncor, with other partners, announced the Oil Sands Pathways to Net Zero Initiative, a commitment to produce no net GHG emissions in their oilsands operations. They stated: “ ‘Net Zero’ is another way of saying we will either produce no GHG emissions or reduce or offset the emissions we put in the atmosphere.” For a sector that has been vilified for its environmental footprint and performance for years, this represents a stunning trajectory towards the new green economy in a very short period of time.  

In October, Dow Chemicals announced plans to triple the size of its Alberta petrochemical plant and transition the facility to net zero emissions. The significance of this cannot be overstated: Dow can choose to invest anywhere in the world, and the fact that they have decided to make the biggest investment in Alberta in the last 15 years is a signal that there is reason for optimism. This $10 billion investment will have been considered in the context of Alberta’s ample and relatively cheap feedstock, and highly trained workforce but as importantly, it is a vote of confidence in our ability to deliver the technology to get to net zero in a sector that will break new ground.

Government and industry cooperation, policies and programs have reduced emissions, increased competitiveness, lowered compliance costs and improved energy efficiency. There is reason for hope. Old arguments are failing, differences are fewer, new voices are being heard and views are changing. Perhaps a new consensus is forming. The problem is not carbon production but carbon emissions and how to reduce them.

Industry has grasped the concept. Are the public and the politicians moving to a consensus on carbon reduction strategies?

In the last election campaign, Conservative leader Erin O’Toole surprised anti-carbon tax hardliners with his shift to a “pricing mechanism for consumers” – a “low carbon savings account”.  In December, his caucus shadow minister for Natural Resources, Calgary MP Michelle Rempel Garner suggested: “Young Canadians – particularly those that want to see climate action and also want to see jobs and have some security – prefer an approach with a robust plan for net zero. I think you’re going to see opposition parties work together on a plan for net zero in the Parliament…” (she did add, on a less conciliatory note) “to show the government’s lack of competency at a time when we need leadership.”

As I write in early December, newly appointed Environment and Climate Change Minister Steven Guilbeault is in Calgary sitting down with the heads of the major oilsands producers. He also met with senior executives from petroleum producers, pipeline companies and power utilities, as well as Alberta business groups. Will reports of understanding, conciliation and consensus on reaching carbon emission targets while supplying Canada’s energy needs emerge from those meetings?

We can only hope so, with Alberta as part of the solution in building the Green Economy.   

Contributing Writer Lee Richardson, a former Conservative MP from Calgary under the Mulroney and Harper governments, was previously chief of staff to Alberta Premier Peter Lougheed and, later, Premier Allison Redford.