Chris Turner’s latest book is The Patch: The People, Pipelines, and Politics of the Oil Sands, which won the National Business Book Award.
When Teck Resources Ltd. announced it would be withdrawing its application to build a new oil sands mine in Northern Alberta, the immediate response from the most vehement defenders of the province’s status quo was a predictable mix of blustering indignation and rent garments. Premier Jason Kenney and federal Conservative Leader Andrew Scheer both ladled the largest share of the blame on Prime Minister Justin Trudeau and his government’s hated environmental regulations; Mr. Scheer called it "devastating news for Alberta and our entire country.” Business Council of Alberta president Adam Legge, meanwhile, said the decision showed how Canada was “a nation that cannot find ways to work together.” There was talk, inevitably, in the darker precincts of social media, of revolt and separation.
But I found myself thinking of Jim Prentice. In the early months of 2015, Mr. Prentice was a neophyte premier preparing for an election. As he surveyed Alberta’s finances, he saw little but deepening disaster. The price of oil, which had hovered at or above US$100 a barrel for much of the previous five years, was in freefall, racing down toward US$50 on its way to a trough last seen in the early 2000s. The flow of royalties that had kept taxes low and services lavish in Alberta was shrinking by the day, and Mr. Prentice had also inherited the burdens of a decade of roaring population growth and his own party’s loose approach to public spending.
He responded with something quite remarkable for a politician facing imminent re-election: He told Albertans all about the mess he’d discovered. In an interview mere weeks before the campaign began, he outlined the general contours of Alberta’s grim finances. He explained that his government was working on a long-term plan to get the province off what would soon be referred to as the “resource-revenue roller coaster.”
“In terms of who is responsible,” Mr. Prentice said, “we all need only look in the mirror. Basically all of us have had the best of everything and have not had to pay for what it costs.”
I was in attendance the next day for Mr. Prentice’s speech at the Palliser Hotel in downtown Calgary. This was a Rotary Club luncheon – a friendly hometown crowd in a city that had been the heartland of Mr. Prentice’s Progressive Conservative party for the 40-plus years of its rule. But the mood in the elegant ballroom verged on funereal.
Alberta’s boom – fuelled by sky-high oil prices, a global spike in natural gas production and the runaway growth of the oil sands – had been more than anyone dared dream. Longer, bigger, wilder, messier. It had made a roaring boomtown out of Fort McMurray, turned Edmonton and Calgary into wealthy metropolises, sent a prime minister to Ottawa, reimagined the whole province as a swaggering energy superpower. And now it was over.
Mr. Prentice was trying to be straight with Albertans that day at the Palliser. And he was annihilated for it. Oil hadn’t been cheap for that long yet, and before that everyone in the room had known themselves to be a business genius or else a maverick entrepreneur, so who needed Grim Jim? They’d all seen downturns, cyclical troughs, mean busts. They’d always seen them end. The next boom was always better than the last. And so Mr. Prentice’s party was finally turfed from power for the first time since the Organization of Petroleum Exporting Countries’ bad old days, and somehow the lefties snuck in for a term. Surely that was the remaining problem – the NDP’s Rachel Notley and the loathsome Trudeau kid in Ottawa. Not only could neither of them run an oil company, you just knew they hated the successful ones. Ditch them and the good times would once again roll across the Prairies.
And so here we are, five tumultuous years after Mr. Prentice’s dark reckoning – four of which Alberta’s NDP spent trying to keep the ship afloat as best they could while the very foundation of the global energy industry shook and shifted – still sorting through the mess he tried to warn us about.
Mr. Kenney entered provincial politics in the wake of the PC collapse with the explicit promise of bringing back the glory days. He appears congenitally incapable of changing his mind and politically obliged to stick to his guns, no matter how dire his ammo supply. And so he reacted to the Teck news with his usual litany of complaints about Mr. Trudeau’s regulations and continued to peddle the line that the only real problem with Alberta’s economy is its myriad enemies. So let’s add that international mining conglomerate to a list that already includes the world’s largest asset manager (BlackRock), its fifth-largest bank (HSBC), Norway’s sovereign wealth fund, the entire European insurance industry, the governments of British Columbia and Quebec and especially Canada and – seems safe to assume – Europeans in general. A world aligned inexplicably against poor, beleaguered Alberta. What is to be done?
It seems unlikely you could rebuild an entire economy on nothing but enmity and grievance, but Mr. Kenney seems keen to try. Meanwhile, Canada must continue to wrestle with the actual conundrum that led to the Teck project being shelved. Mr. Kenney might argue that foreign-funded radicals obsessed with Marxist delusions from the same era the Premier last updated his own worldview are at fault. But Teck chief executive Don Lindsay in fact made explicit reference to the core problem Alberta faces – climate change – eight times in his 750-word letter to the federal Environment Minister.
Climate change is the main reason new oil sands projects are controversial and the primary motivation for many of those who protest against new pipelines carrying fossil fuels to market. Climate change and the rise of emission-free fuels and technologies to combat it have created the risk that makes investors and insurers wary of fossil fuels in general and Alberta’s oil industry in particular. Climate change policy – needing as it does to balance Canada’s resource sector with its climate goals – is the wellspring of much of the friction between Alberta and the federal officials on the energy file. Climate change is now driving the roller coaster Mr. Prentice warned about.
Teck surveyed this battlefield, saw no end to the hostilities and decided its already economically questionable stab at new oil sands development was sure to become cannon fodder. And it exited the war. But there remains no durable way forward for Alberta – or for Canada – that does not reconcile its oil and gas sector with the necessity of reducing greenhouse gas emissions.
Alas, Alberta’s conservative political leadership has shown little interest in seeking such balance of late. Instead, they have issued Buffalo Declarations, flirted with separatists and turned the climate and energy policy discussion into a kind of identity politics. Mr. Kenney launched his campaign to unite Alberta’s right driving a big blue pickup truck around the province, visiting hard-luck oil and gas towns and posturing in front of coal-fired power plants. Now in power, he and his war-room-backed government have relentlessly demonized the federal carbon tax and equated virtually all criticism of the fossil-fuel economy with something verging on treason. (He has vowed that his government’s first bill in the new legislative session will bring down harsher punishments on anyone who interferes with “critical economic infrastructure,” by which he mostly means pipelines.)
In Teck’s withdrawal letter, the company stressed the need for “a larger and more positive discussion about the path forward.” Mr. Kenney instead has railed about the meddling of “urban green left zealots” – more identity politics in defence of the rural Alberta of yesterday, in lieu of a plan for the Alberta of tomorrow. Similar lines of attack emerged from Mr. Kenney’s allies – a former aide to Stephen Harper wondered whether downtown Toronto’s “vintage clothing shops and artisan cheese shops” were enough to drive Canada’s economy, while the executive director of Mr. Kenney’s party dismissed the Calgary Chamber of Commerce as “downtown elites” in a tweet (later deleted).
The chamber drew the snark for responding to the Teck announcement with a call for “real, decisive action on climate change.” As a representative of the urban Alberta derided by Mr. Kenney, the chamber understood that the province needed more than sneering defence of its resource industry to find its way back to prosperity. And the chamber is surely well aware of the significant demographic changes wrought by Alberta’s long boom. The province welcomed hundreds of thousands of new residents over the past two decades, and a great many of them do not instantly identify with pickup trucks against rural backdrops or immediately think of “urban” or even “green” as pejoratives. And more to the point, it’s those urbanites – green and otherwise, lifelong Albertans and new arrivals alike – who represent the best hope for a way out of the ditch Alberta’s big blue pickup truck finds itself stuck in.
A leader truly focused on the future might look past the 7,000 construction jobs the Teck Frontier project may have one day created – a day that wouldn’t have occurred until 2023 in even the rosiest scenario on offer – and notice that Alberta is confronted with the urgent need to develop emission-reduction technologies for its existing oil and gas sector and the opportunity to build a clean energy sector to take advantage of its enormous renewable resources. Owing in part to the job magnet of the boom, Alberta remains Canada’s youngest province, with a highly educated and well-trained work force – an extraordinary human resource waiting to be tapped for just such a project.
Imagine if Alberta’s political leadership saw climate change not strictly as an impediment but as an opportunity to re-engineer the provincial economy for a future in which oil and gas still employ thousands but the new low-carbon economy drives new growth. Calgary-based Greengate Power, for example, will soon start construction on Canada’s largest-ever solar farm project in Southern Alberta – a $500-million build that will employ 500 workers. Those numbers aren’t quite Teck-sized, but the construction will most definitely happen, and the hiring will start this year.
Albertans like to talk about their entrepreneurial spirit and can-do attitude. There’s some bluster to that, but there’s also some real truth to it. A common urban Alberta story – mine is one of them – is about coming for a paycheque, planning to stay a couple of years and finding 15 have passed in a community enviable for its risk-taking, its flat and fluid social and professional hierarchies and its lifestyle. (Calgary, entering the fifth year of its worst economic beating in a generation, fell all the way from fourth to fifth on the Economist Intelligence Unit’s ranking of the world’s most livable cities.) There is a constituency here, in and out of the oil and gas sector, deeply worried about a seemingly rudderless economy but waiting as well to talk about what Alberta wants to become next. And ready, perhaps, to stare into that mirror.