Climate action hits speed bump as Trudeau and Smith announce new working group

As tension between the provinces and Ottawa mounts over climate policies, a meeting between Prime Minister Justin Trudeau and Alberta Premier Danielle Smith confirmed ongoing delays in reducing the country's greenhouse gas emissions.

Dressed in their finest Calgary Stampede clothes, Trudeau and Smith held a brief press conference Friday afternoon to announce a working group between the federal and Alberta governments would be set up to discuss three areas driving a wedge between the two sides.

The three areas of focus are the proposed federal regulation to cap oil and gas sector emissions, the federal goal to have a clean electricity grid by 2035, and a section of the Paris Agreement called Article 6 that allows for emissions reduction credits to be traded across borders. No other details of the working group were disclosed, but Trudeau described it as a way to share what federal and provincial experts believe in an attempt to find “common ground.”

“There's lots of things to work through. I can say there's been a really positive and constructive working relationship between our ministers and our folks from the very beginning, so we're looking forward to keeping up on that,” he said.

Smith said she hoped to find agreement through this process, too, but also made her red lines clear. Essentially, she wants federal targets delayed and for Alberta to get emissions reduction credits for exporting fossil fuels — the primary driver of climate change.

She said Ottawa’s goal of a net-zero power grid by 2035 is “not possible.” The proposed cap on oil and gas sector emissions that would achieve a 42 per cent reduction by 2030, she said, was “essentially a production cap, which we don’t think is realistic or feasible.”

Also, “we would like to be able to work with our partner in British Columbia … in order to be able to reduce emissions and get credits here through [liquified natural gas] LNG export,” she said.

On the clean power grid front, recent research from the Pembina Institute and the University of Alberta found massive decarbonization efforts to its electricity grid would be $22 billion to $28 billion cheaper than previous analyses suggest, thereby saving Albertans hundreds of dollars on their bills. Moreover, the research explains Alberta’s grid has “already decarbonized faster than anyone anticipated,” noting that in 2015, the province committed to phasing out coal by 2030 and is on track to be off coal by the end of 2023.

“Alberta really does have the renewable energy advantage here,” said Pembina Institute acting director of oil and gas Janetta McKenzie. “More than three-quarters of wind and solar built in Canada last year was in Alberta, so the province is pretty well positioned to become the renewable energy capital of Canada.”

McKenzie also says a strong cap on oil and gas sector emissions “actually helps support the sector given some of the global trends we’re seeing.” She pointed to recent forecasts from the Canada Energy Regulator (CER) that show demand for oil and gas falling as net-zero policies are implemented and cited environmental, social and governance (ESG) goals that companies and countries are adopting as evidence the energy transition is already underway.

“Within the context of those trends, this cap can help prepare the sector for the future and low-carbon economy by providing targets to help keep emissions within the increasingly stringent ESG demands of investors and our trading partners,” she said. “The sector has the technology and the funds to get started, so there is a sense in which this emissions cap is just kick-starting the emissions reductions that need to happen to be competitive in the energy transition.”

Smith’s view that Alberta should get credit for emissions reductions abroad by exporting LNG is unsupported by science. While true that burning gas is cleaner than burning coal, gas is still a fossil fuel that must be phased out to avoid catastrophic global warming. Her argument is essentially that if gas extracted from Alberta can be used to displace coal-fired power plants in another country, then Alberta should get credit for the emission reduction.

“While there may be some appetite from British Columbia and Alberta to pursue these sorts of international credits, it's not clear that would be doable given the international system as it stands now, and it's also not clear that other countries would be willing to enter into agreements with us on those,” McKenzie said.

The CER forecasts also show demand for natural gas and LNG declining as the world takes action to slash greenhouse gas emissions. And because it is well understood that extracting gas emits a lot of methane –– a greenhouse gas roughly 80 times more potent than carbon dioxide over the first 20 years, making it a priority in efforts to reach net zero by 2050 –– wanting to get credit for exporting it is simply not aligned with what climate scientists say must happen to avoid the worst impacts of climate change.

Trying to secure credit for LNG exports is “a pretty difficult negotiation to have with our trading partners, who may not be onside or may want several strings attached for entering into an agreement like that,” McKenzie explained. “Whereas we know wind and solar are cheaper than gas-fired electricity in many parts of the country, we know that technology is available now, we know there are things we can do to accelerate the energy transition that work now.”