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Max Fawcett is a freelance writer and the former editor of Alberta Oil magazine and Vancouver magazine. He previously worked in Alberta’s Climate Change Office.

A foreman inspects the carbon capturing research facility near Redwater, Alberta in this file photo from June 26, 2009. Alberta should invest more heavily in emissions-reduction technologies instead of a failing oil and gas industry, writes Max Fawcett.

John Ulan/The Canadian Press

When Jason Kenney became Premier of Alberta last April, he probably didn’t imagine he’d be talking about the possibility of his government investing directly in the oil and gas industry less than a year into its mandate. After all, as the former head of the Canadian Taxpayers Federation, the idea of a government propping up a failing industry with direct investments would have probably felt only slightly less repulsive to him than the idea of raising taxes on the wealthy.

And yet, in the days leading up to his government’s second budget, he sounded an awful lot like someone who was preparing to do just that. “Like the government of the late Premier Lougheed,“ he declared, “Alberta is prepared to invest directly and support companies and Indigenous groups, when necessary, to assure the future of responsible resource development.”

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But Jason Kenney is no Peter Lougheed, and his United Conservative Party government’s apparent interest in supporting the oil and gas industry has very little in common with the concerns that motivated Mr. Lougheed’s Progressive Conservatives. While the latter was interested in building his province’s economic future, Mr. Kenney simply appears determined to keep its past alive – at almost any cost.

After all, Mr. Lougheed’s decision to create the Alberta Energy Company wasn’t about shoring up an existing industry. It was about responding to changes in global energy markets, which were turned upside down by the Arab Oil Embargo of 1973; it was also about using the power and patience of government to transform the oil sands from a science experiment into a viable industry. The returns on that initial investment were spectacular: The $800-million Athabasca oil sands complex seeded the field from which a multibillion-dollar industry grew, one that has employed tens of thousands of people and has produced millions of barrels of oil. The Alberta Energy Company, which Albertans were able to buy shares of in 1974, would eventually become Encana, one of the largest oil and gas companies in Canadian history before its ill-fated split in 2009.

Most of Mr. Lougheed’s investments from the 1970s, many of which were made with the windfall the province received as a result of soaring oil prices, didn’t pan out as well as the Alberta Energy Company. Some, like an investment in Peter Pocklington’s meatpacking operation, were outright disasters. But all of them were made with an eye to the future – and expanding Alberta’s place in it.

If Mr. Kenney wants to do the same, he shouldn’t be investing the province’s money – much less the pension funds of Alberta’s public employees, as has been suggested – in the oil and gas industry. Instead, he needs to be looking to support new opportunities for economic growth and development.

Maybe that means investing more heavily in Emissions Reduction Alberta, the government agency that has been helping de-risk low-carbon technologies since it was created in 2009.

Maybe that means investing more in Alberta Innovates, whose “Bitumen Beyond Combustion” program has helped reveal an entirely new market for the province’s heavy crude: carbon-fibre production. Indeed, the ability to convert bitumen into carbon fibre, a material that’s both stronger and lighter than steel, could even play a key role in lowering the cost of electric vehicles, creating a new multibillion-dollar industry in Alberta in the process. As James Munson noted in a 2018 story for the magazine Corporate Knights: “If carbon fibres took just one percent of the global steel market by 2030, that would require three million barrels of bitumen a day.”

Or maybe, if Mr. Kenney really wants to follow in Mr. Lougheed’s footsteps, that means backstopping a company that would build out the infrastructure needed to produce hydrogen and ship it to global markets. A recent report from the University of Alberta’s David Layzell and the University of Calgary’s Jessica Lof suggests that Alberta, already estimated to be the second-lowest-cost producer of hydrogen in the Asia-Pacific region, is positioned to benefit from the considerable economic upside of the rapidly growing hydrogen market, which could both displace diesel as the fuel of choice for heavy industry and store renewable energy generated by wind and solar. And based on the latest report from the International Energy Agency, the timing of a strategic government investment couldn’t be better. “This is a critical year for hydrogen,” executive director Fatih Birol wrote. “It is enjoying unprecedented momentum around the world and could finally be set on a path to fulfill its long-standing potential as a clean energy solution.”

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It’s hard to imagine Mr. Kenney actually pursuing any of these opportunities, given that his government has consistently reacted like it has a severe allergy to the very idea of economic diversification. But his preferred strategy of cutting corporate taxes and funding inquisitions targeting the oil and gas industry’s enemies has so far only produced a boom in public-relations fiascoes. Maybe, just maybe, it’s time to start betting on the future instead of the past. Peter Lougheed would certainly have approved.

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