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Business Commentary Jason Kenney is selling false hope to Albertans on pipelines

Pipelines are clearly on Jason Kenney’s mind. The Alberta premier-designate mentioned them at least six times in his victory speech Tuesday night.

Getting the province’s vast oil resources to new markets is the centrepiece of his vow to lift the province out of its economic funk and get “back to work.”

Unfortunately, the path he’s laid out could make that goal virtually unachievable.

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By vowing to roll back the departing NDP government’s price on carbon and scrap a plan to ban coal-fired electricity by 2030, Mr. Kenney is setting up Alberta for a protracted fight – with Ottawa, with its own energy industry and with potential buyers of its oil and gas.

The irony is that getting construction started on a new pipeline may be a lot closer to fruition than Mr. Kenney and most Albertans believe.

Or, it was.

The federal government plans to decide by June 18 whether to approve the stalled Trans Mountain pipeline expansion project, which would carry crude from outside Edmonton to Burnaby, B.C., on the West Coast. The National Energy Board okayed the pipeline in February, and the federal cabinet had given itself at least three months to review the decision, a deadline that it is now extending.

A go-ahead should be an easy call. Ottawa owns the pipeline, after acquiring it last year from Houston-based Kinder Morgan. Prime Minister Justin Trudeau’s Liberal government has repeatedly said that it will do whatever it takes to get the long-planned expansion of the pipeline started, at an estimated cost of nearly $10-billion. Ottawa has already laid out $4.5-billion to buy the existing pipeline.

But that promise was always conditional on Alberta being in sync with Ottawa’s plan to meet its carbon-emission-reduction targets.

If Mr. Kenney reverses the departing government’s climate plan, Mr. Trudeau will have no choice but to impose a carbon tax in Alberta – as his government already has in Ontario, Manitoba, Saskatchewan and New Brunswick.

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Alberta could choose to join Ontario in fighting a carbon tax in court. But it can’t avoid a tax.

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For its part, Ottawa has no incentive to play nice with Alberta on Trans Mountain while Mr. Kenney is bashing a central piece of the Liberal government’s agenda. And without Alberta on board, Canada can’t meet the emission-reduction targets it agreed to in the Paris climate accord.

Instead, the Trudeau government will have good reason to rag the puck on approving Trans Mountain, yet again.

Mr. Kenney has also talked about reviving two other cancelled oil pipelines – TransCanada’s Energy East project to move crude to the East Coast and Enbridge’s Northern Gateway project, linking Alberta to British Columbia’s northern coast.

Both projects are even bigger long shots than Trans Mountain. By talking them up as solutions to Alberta’s near-term economic pain, Mr. Kenney is giving Albertans false hope.

Perhaps Mr. Kenney is looking beyond the Trudeau Liberals, hoping they’ll be defeated by Andrew Scheer and the Conservatives in the October election.

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But that is short-sighted.

The fight over pipelines is an unfortunate distraction from what should be an area of common ground for Mr. Kenney and Mr. Trudeau – getting Alberta out of the dirty business of using coal to generate so much of its electricity.

Alberta currently generates roughly half of its electricity from coal.

Mr. Kenney insisted in his victory speech that Alberta takes climate change seriously. “We are world leaders in innovating to reduce emissions and shrink the environmental footprint of Canadian energy,” he said.

That may be true when it comes to the oil sands. But the world will never look kindly on Alberta as long as it burns so much coal while producing relatively cleaner oil and natural gas, for export.

If Mr. Kenney was serious about climate change, he would commit to weaning the province off coal more quickly, not more slowly. And he would find ways to build more power plants in the province, fired with cheap, abundant and much cleaner natural gas.

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The reason Alberta has struggled for so long to shed its “dirty” oil image isn’t because its crude comes from the oil sands. Nor is it because the province hasn’t been muscular enough in confronting environmental critics.

It’s because so much of its electricity is produced using dirty coal.

And that is a narrative Alberta can rewrite all on its own.

Alberta premier-designate Jason Kenney addresses jubilant supporters in Calgary, with promises to get the province’s economy back on track and fight for pipelines. The Canadian Press
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