Alberta’s era of massive investments in industry-led carbon capture and storage projects – the cornerstone of the province’s climate-change policy that has come under fire for increasing oil sands greenhouse gas emissions – would come to end under the leadership of Jim Prentice.
In an interview, the former federal cabinet minister in the race to become Alberta’s next premier also addressed the province’s carbon levy. He said he would keep the $15-per-tonne fee on emissions intensities for the largest industrial facilities, but not increase it – unless it was done in tandem with other North American jurisdictions so as to not disadvantage Alberta competitiveness.
Alberta’s greenhouse-gas reduction strategy would instead shift to phasing out coal-fired power plants that produce much of the province’s GHG emissions, improving the performance of the transportation sector, and encouraging the use of more efficient appliances, Mr. Prentice added.
“I don’t believe carbon capture and storage is the panacea,” he said. “It’s not capable of achieving the reductions in emissions that are required, and it is expensive, and in certain contexts, it’s quite unproven.”
Both the carbon-capture program and the province’s carbon levy have been key to Alberta’s attempts to market itself in Canada and internationally as a “responsible energy producer.” The province’s single biggest public policy and business issue is market access to U.S. and global markets. Proposed pipeline projects such as Keystone XL and Northern Gateway face delays and uncertainty, in part due to concerns about expanding oil sands production and the sector’s lot as the country’s fastest growing source of GHGs.
Critics say Mr. Prentice’s plans are not specific enough and do not show enough leadership to assuage environmentalists, who have found increasing success at blocking the province’s oil exports, and others worried about the carbon emissions of the oil sands.
“I don’t think you can comfort critics of the oil sands by putting high efficiency refrigerators in peoples’ houses,” said University of Alberta energy economics professor Andrew Leach, who argues any good work the province has done on emissions reduction in the past has been lost because it has made aggressive commitments without real follow through.
In his campaign platform, Mr. Prentice does not lay out any specific greenhouse gas reductions strategies for the oil sands sector – although he said Alberta can become an environmental leader by relying on free markets, technology, better monitoring and harmonizing standards with the United States. He also does not say whether under his plan emissions from coal-fired plants would be reduced even further than federal regulations require. But the Progressive Conservative party leadership candidate said it’s still possible that Alberta will meet its climate change goal, and overall emissions will start going down starting in 2020.
As criticism of Alberta’s growing oil sands emissions ramped up in 2008, former premier Ed Stelmach announced a bold plan of putting $2-billion toward carbon capture and storage projects with private-sector partners. The technology involves collecting GHGs from a large stationary source, such as a power plant, for eventual injection into a deep underground geological formation. That year, the International Energy Agency praised the pledge as one of the few strong examples of a “real” government commitment to making carbon capture work.
However, Alberta’s long-stated climate change goal of emission reductions by 2020 was hammered earlier this month by the province’s Auditor-General, who said the government hasn’t regularly monitored results in the past six years and will miss its targets. Carbon capture, which the province was relying on for 70 per cent of its GHG emission reductions, will deliver less than 10 per cent of expected results.
Alberta had originally planned for four carbon-capture projects, but two were cancelled when companies decided that even with a government-infusion of cash, the projects no longer made economic sense. The two remaining projects – now totalling $1.3 billion in government dollars – are Shell’s Quest project and Enhance Energy Inc.’s trunk line.
The right-of-centre Wildrose party, the PCs main political challenger, has long panned the carbon-capture plan as being an inefficient subsidy to industry. Both Mr. Prentice and one of his leadership rivals, Ric McIver, are cool to any continuation of the program beyond current commitments.
Another leadership candidate, Thomas Lukaszuk, said the U.S. benefits from Alberta not being able to ship or have pipeline access to the Gulf Coast – through Keystone XL – or other global markets because that allows their refineries to buy land-locked Canadian oil at a discount. Alberta, he argues, must be seen by the American public as stewards of the environment and consider raising its carbon levy and continuing the carbon-capture program.
“If we can’t have the political commitment, and the political will, to even meet our own targets. . .how can we present ourselves in a credible sense to other provinces and the rest of the world, and expect to expand our markets?” Mr Lukaszuk said.