The Alberta credibility gap on responsible tar sands development and climate policy: Can it be closed?

Alberta’s Premier Alison Redford visits Washington DC once again — this time,  to speak at the Brookings Institution about Alberta’s claimed “record on responsible energy development” and “continued global leadership on responsible development.”  Lobby trips from Canadian officials to Washington DC aren’t unusual but there is an air of anticipation surrounding this visit.  Late last week, a report leaked indicating the Alberta government may update its climate policy.  Some have said this could be a major leap forward in Alberta climate policy enough to placate U.S. decision-makers who are scrutinizing the proposed Keystone XL tar sands pipeline.  While Canada’s weak environmental policies have become an area of focus in the debate around Keystone XL, there are now a host of reasons to reject the pipeline including the recent tar sands spill in Mayflower, Arkansas, which has left many people ill and water contaminated.

But what Canadian decisionmakers ought to know is that Americans do care whether Canada has credible and effective environmental policy. Unfortunately, Alberta (and the federal government for that matter) has a credibility gap when it comes to showing it has sound environmental policy to address tar sands development.  In fact, Alberta is more well-known for making announcements about introducing environmental policy that, then, is sometimes delayed for years.  And even when once implemented, the policies are weak, unenforceable, and ineffective at regulating the tar sands industry.  This is true for federal policy as well.

It is possible that Alberta is finally getting serious realizing its environmental record is far from world class.  But the only true test of whether Alberta will actually improve its environmental record will not be in a speech made in Washington DC, or in the advertisements it is now placing in the U.S.  It will be in what they actually propose and then implement and whether the policies actually address their growing tar sands problems and unacceptable impacts to climate, water, and wildlife.

The 40/40 plan

In a recent meeting between oil executives, federal government officials, and the Alberta government, it was revealed that the Alberta government is considering a 40-per-cent reduction in per-barrel emissions from tar sands and an accompanying $40-per-tonne payment when that emissions limit is exceeded.  This so called 40/40 plan isn’t even a formal proposal and so it is critical that Alberta share the details on how its plan would be implemented.   We know from Alberta’s existing “world class” plan that details do matter. Alberta’s existing plan may have “pioneered” the first jurisdiction in North America to apply a carbon price, but its effectiveness was seriously compromised because the levy of $15 was insufficient to drive down carbon emissions in any significant way and was over-shadowed by rapid carbon pollution growth.  The details of how the plan was implemented revealed significant flaws that made the policy ineffective.

What matters is whether the policy incentivizes change.  Alberta’s current policy costs the tar sands industry less than 10 cents a barrel.  Under the proposal being floated, the cost for the tar sands industry to comply would be under $1.50 for a barrel of tar sands oil.  This is a step up from the current Alberta program but what really matters is whether the plan reduces emissions.  The consensus is that to truly be effective, the levy on carbon needs to be upwards of $100-$150/tonne to make any difference.  A report from the Pembina Institute released last week indicated that for Canada to get back on track to reach its 2020 climate target, the oil and gas sector would need an intensity target of 42 percent and a financial levy of between $100-$150 per tonne.  ].  Also, what Alberta has proposed could be viewed as a first step but only with a simultaneous commitment to increase the price substantially in the coming years.

As Canadian climate activist Tzeporah Berman has said,

If what Ms. Redford is trying to do is set a more sustainable course and secure her province’s reputational capital and market access, then she is going to need to stand up to the industry and go for something closer to $100 a tonne. With that, we might have a chance of meeting our climate targets.

More importantly, this climate policy would only be a first step as it will not achieve the necessary goal  to limit the projected global increase in the Earth’s temperature to two degrees Celsius.  To have even a 50 percent chance of achieving this goal, the International Energy Agency has looked at oil production around the globe and indicated that production would need to be limited across the board.  The IEA has indicated that Canada’s tar sands industry would need to limit development to a third of what is currently planned.  In other words, a true test of Canada’s commitment to prevent catastrophic climate change would have them limiting tar sands production.

Credibility gap not just on climate policy

But even if Alberta were to move forward with a strong climate policy, Alberta’s credibility is not just influenced by what they do around carbon emissions.  There are also major impacts to water, land, wildlife, and air quality.  And sufficient evidence that current policies in place are too weak.

While the Premier has claimed her government has taken an “unprecedented commitment to openness and transparency of energy development,” it has still not provided key information to the public about two toxic release for 10 hours into the Athabasca river from the tarsands operator Suncor on March 25, 2013 and another spill just revealed from 2011.  A letter from over 40 organizations across North America has not yet had a response.  Just last week, deformed fish found downstream from the tar sands operations were viewed as being remarkably similar to deformities of the Exxon Valdez spill.   And despite previous commitments to tackle the province’s extreme problem with the generation of polluted waste, there are now massive toxic waste lakes that cover a city the size of Washington DC.  The province is not enforcing its already weak policy to reduce the volume of the waste so the size of these toxic lakes is projected to grow by 40 percent by 2030.

Alberta’s credibility was furthered undermined last week with its appointment of Gerard Protti to head up its regulator of the tarsands industry.  Protti was a founding member of Canada’s tar sands lobby group, the Canadian Association of Petroleum Producers, and is an industry insider, having worked with several companies in Alberta’s oil and gas industry.  Even pro tar sands commentators acknowledged, “It’s tough not to think about Gerry Protti’s appointment as chair of the new Alberta Energy Regular as putting the fox in charge of the hen house.”

So are we seeing a trend toward stronger environmental and climate policy in Canada?  Certainly not yet.  What is more evident is an aggressive lobbying campaign being waged by the both Alberta and Canadian federal governments.  This includes an expensive lobby strategy by Alberta and millions of dollars spent by the federal government to promote the tar sands industry.  The Alberta government is spending $200,000 over the next few months alone to promote the Keystone XL tar sands pipeline.  U.S. decision-makers who are seriously grappling with these issues won’t be swayed by advertising.  In the United States, there is a serious look at the environmental policies that oversee tar sands development.  What will matter most is whether there are effective enforceable policies in place that make a difference.  If those policies move forward and make a difference, groups like NRDC would certainly recognize that improvement.  But until then, it would be premature to suggest we are seeing the needed shift from up north that is needed to demonstrate true world-class environmental leadership.

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