This week in AB
Moving the goal posts
One benefit of fixed election dates is that if an election outcome isn’t quite to your liking, you can set your sights on the next one, knowing that it will be held approximately four years from the last, give or take 30 days.
If said outcome was to your liking, it might not bother you in the least that the winner exercised their privilege to hold an election within one year of the ambiguously termed “fixed election date” and decided to hand themselves an additional five or six months in power.
Wrapped up in Bill 21, The Emergency Statutes Amendment Act — where the province will immediately pull rank if a municipality declares a state of emergency — is the UCP’s first legislative move toward dealing with the effects of climate change: moving the fixed election date to the fall when the threat of hail damage, flooding, or wildfires (and the likelihood the UCP will be asked about their climate plan) is much lower.
It’s not out of left field.
Who can forget, in 2019, the tiny violins playing in the background when the newly-elected UCP had to cancel their carbon tax removal celebrations due to the fact that wildfire smoke was blocking out the sun in Edmonton? Certainly not I.
The question some people were asking is why the government should they be able to give themselves six more months of government.
Granted, voters don’t tend to like snap elections — when it appears that the governing party is taking advantage of its opposition by calling one on the heels of an opportunistic leader abandoning her party to cross the floor and join them; that makes it looks like a governing party and an opportunistic leader are trying to take advantage of the public.
Announcing in 2022, however, that you planned to hold the next election in the fall of 2026 instead of the spring of 2027 could hardly be considered a “snap” election; and it would look far less opportunistic… but I suppose certain leaders are limited to the tools available to them.
While I can see why the UCP would rather avoid holding elections during high risk periods to their re-election, there is a general rule in politics: if you don’t relish the idea that your political opponent would follow your lead, take another path.
Canada and Beyond (sort of)
We have a world commodity that we need to sell to, ahem, the world
At some point in the mid-to-late 2010’s, I became rather discouraged with our governments for not being honest about what was happening in the oil and gas sector.
For decades, Alberta’s oil and gas industry was a beacon of social mobility. New money, and lots of it, flowed into the hands of employees, their families, and the entire economy — much of the time.
Those times when it didn’t, when mass layoffs led to “V-shaped” recessions and governments grappled wildly to reign in those purse strings, everyone promised to do better next time.
Some probably did, and others are still pissed off about not getting the opportunity to have one more go at doing it “right”.
Our governments have not done a very good job of preparing the province for what was coming in 2014.
Climate change has been talked about for more decades than I’ve been alive but we saw a real push in the 90’s with the Earth Summit, Kyoto Protocol (which we had to back out on), 2015 G7 Summit (which was an agreement to make it our grandkids’ problem), followed by the Paris Agreement in 2016, and the Leader’s Summit in 2021.
Canada wasn’t the only country in the room at these talks. Leaders from many other countries, even countries we do business with, were there as well. They made the same commitments. For some reason, they expected Canada to stick to its commitments as well — weird, I know.
2014 was a perfect storm for the oil and gas industry in Alberta. Not only was there a major downturn — that was “U-shaped” and no one could predict its end — coming, but there were all of these other pressures that showed up around that time including funds making plans to divest from the “volatile” industry, and some insurers started adding restrictions for insuring oil and gas projects.
In Calgary boardrooms, CEOs made decisions to cancel new projects that were not scheduled to start until late 2015, which had a lag effect on Alberta feeling the recession as many continued working up north, and in downtown Calgary, through until the fall/winter of that year. The full force of unemployment was not felt until that time when many of those who had been on sites had no next job to go to.
All of this was then further compounded by Redwater.
The Redwater decision, which was contested in 2015 and finalized in 2019, held that while trustees (lenders) were not personally responsible for an insolvent company’s environmental obligations, the estate was, and therefore a lender would have to include those as claims on the estate. That meant less money for them if a company became insolvent and they reigned in their lending practices as a result.
The decision put a chill on lenders for oil and gas, and in my opinion, is why the Alberta government started the Indigenous Opportunities Fund — to support continued investment in oil and gas and potentially tie some federal responsibility to the end of life cycle. That is pure, highly uncharitable, opinion, but I don’t think there’s a single person our government wouldn’t sacrifice to give a dollar more to oil and gas.
Meanwhile, the U.S. experienced a shale oil boom, became a net exporter of natural gas, and a crude oil export “power”… and other countries were getting more serious about climate change.
Enter the “just transition” to a clean energy economy.
The sustainable jobs plan, released in February 2023, outlined “in broad terms the ways the federal government will help maintain and create energy jobs, as well as transfer workers to net-zero jobs as needed. It includes a new government office to oversee the process, training programs, Indigenous consultation and inclusion and better data to fully understand the jobs that exist now and that could exist in the future”.
Oil and gas jobs are mainly in construction of new projects — far fewer employees are required once the project enters production. Spending is forecast to increase from its lowest point in 2020, but nowhere near the peak spending of 2014.
While I think most people have realized oil and gas will no longer be the major employer it once was, having a transition plan in place for those who need something else is more proactive than hoping for another boom.
The winds of change have been blowing for a decade, but the icing on the cake is probably Danielle Smith’s big idea to attend COP28 in December of 2023, where she pitched oil and gas investment and complained about the federal government’s plan to cap methane emissions.
Politically-motivated nonsense that works really, really well in Alberta doesn’t necessarily have the same currency elsewhere.
In January, the E.U. Energy Commissioner released an information document on their methane reduction for imported fuel plan, which included the following.
“The EU only accounts for 6% of global energy-related methane emissions, while as the largest oil and gas importer our imports account for around 30%.
As such, the regulation on methane emissions will require fossil fuel importers to provide methane emissions data from the end of 2024, which will be published in an EU database with country performance profiles from 2026.
There will also be a requirement for importers to show that EU-equivalent measurement, reporting, and verification standards for methane emissions were used from 2027, and following a review, a methane intensity import standard from 2030.” (The latter part of this quote was initially in the Globe and Mail article, but has been removed; the link is now from the Energy Commission’s document).
Adding insult to injury (for Alberta), orphaned wells have been found to be the uncounted methane leakers — and we aren’t even sure of how much they’re leaking.
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By the end of 2021, industry spent over $500 million (including $300 million in federal dollars) to remediate wells in the province, reducing the number of inactive wells by 9 per cent. In 2022, more than $700 million was spent, taking an additional 8,000 wells from around 300,000 still in the queue.
The U.S. made $506 million available for grant applicants in 2022, and $630 million in 2023 to try and tackle their orphaned and abandoned well problem, which is slightly different than ours. They aren’t even sure where some of their wells are because reporting is “incomplete”, and since metal was ripped out of some during World War II it’s not obvious where they used to be.
Even if the E.U. removed the monitoring requirement from the new law for now, they’ve sent a strong enough signal that they have every intention of forcing oil-producing regions to compete for their business by reducing emissions.
Finally, a business case that oil and gas is apparently willing to listen to.
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For clarity, “abandoned” is not the same as “orphaned”. Abandoned wells have a thorough engineered multilayer subsurface plug with no remaining surface installation. They have negligible risk with no reasonable or necessary further mitigation required. Whereas orphaned are left in operable condition but with no current owner, maintenance, or monitoring. Orphaned wells are a very real risk.
According to the Constitution, provincial (and federal) elections happen when one of three things happen:
1) Government loses a confidence motion
2) Premier asks the Lt. Governor to call an election
3) Its been five years since the previous election.
Fixed election laws that don't amend the Constitution are a polite little fiction.