An unlikely carbon accord: How two sides became one

Share

Will the master forecaster please step forward?

I, for one, will bow to anyone who, 12 months ago, predicted that Murray Edwards, oil patch deal maker, would be on a stage with an Alberta NDP premier and environmentalists, singing the praises of a carbon tax as oil entered its second year in the range of $40 (U.S.) to $50 a barrel.

Yet, here we are.

On Sunday, Premier Rachel Notley announced a $3-billion-a-year (Canadian) carbon tax, a hard deadline on coal-fired power, a major cut in methane emissions and promotion of renewable energy. She was flanked by strange bedfellows: representatives of green groups such as the Pembina Institute, Clean Energy Canada and ForestEthics. Ms. Notley was joined by Mr. Edwards, who is chairman of Canadian Natural Resources, Cenovus Energy CEO Brian Ferguson, Suncor boss Steve Williams and Shell Canada head Lorraine Mitchelmore.

The spectacle and the major climate policy that, let's face it, no one saw coming a year ago was a culmination of months of shuttle diplomacy among oil barons and environmentalists who had grown frustrated by polarization and zero progress on their goals.

There were no winners as the oil sands sector dug in to defend its past record against environmental groups warning of a bleak future. Industry came up dry in its quest for pipelines to provide market access and non-governmental organizations couldn't persuade the government to impose tougher standards. Alberta's international reputation as a climate laggard worsened.

In hopes of putting an end to the trench warfare, environmental and business leaders began cautious early meetings to understand each others' positions months before the New Democratic Party won power in May.

Even former premier Jim Prentice talked about the need for a credible climate policy if Alberta and its energy sector expected to find willing buyers for its crude in much-sought-after export markets.

Indeed, frequent junkets to Washington by previous premiers did nothing to convince U.S. President Barack Obama that the Keystone XL pipeline should be approved. Early this month, he did the opposite.

The NDP's election, it turns out, allowed the page to turn. With the Paris climate summit approaching and a government in Edmonton espousing environmental improvement , a few industry players sensed opportunity.

Suncor's Mr. Williams – whose company is the largest oil sands producer – signalled willingness for a more collaborative approach in a landmark speech at an Ecofiscal Commission event in May.

It is a fact that Canada has a massive storehouse of oil that can provide economic benefits for years to come. Meanwhile, the world is trying to turn away from high-carbon energy. This puts Alberta on a necessary track to seek technology that will allow the benefits of bitumen to keep flowing, he said.

Meanwhile, Mr. Edwards was among the most publicly critical businessmen of the NDP's energy and environmental policy ambitions. Canadian Natural has much at stake as operator of an extensive array of oil sands and conventional oil assets.

As it turns out, though, Canadian Natural was one of the early participants in meetings with green groups, and it helped the government devise carbon and methane reduction policies in its climate strategy that reward operations that are most efficient.

Players on all sides credit Ms. Notley's choice of University of Alberta economist Andrew Leach to head up the panel whose report informed the policy. Mr. Leach has long been respected as objective in his analysis.

Of course, there are lots of questions to be answered, including how the imposition of a carbon tax will affect families hit by the oil industry's collapse, even with promises of financial assistance from the policy's new revenue.

But the fact remains that the province was stuck in a deep rut with old messaging and a tiresome debate. Now there is some common interest in getting out of it and a plan to work through.

That's way more than what anyone predicted a very short time ago.