Sunday, April 22, 2012

Summary: Albertan party positions on oil sands

The Albertan provincial election is tomorrow, April 23. One of the issues the four parties are quite different on is proposed policy for oil sand development. Find a summary of these positions and my opinion after the break.

Progressive Conservatives: The PCs don't propose any radical departure from what is being done now. They are touting a $3 billion environmental fund and AOSTRA-2, a reboot of the Alberta Oil Sands Technology and Research Authority. She also wants to coordinate with other provinces in order to streamline the process and increase support for the oil sands across the country by giving Canadians outside of Alberta more of a stake in the projects.

Wild Rose: These conservative upstarts would essentially seek to loosen environmental spending, most notably by scrapping the $2 billion carbon capture program created by Stelmach, and by making the business environment more attractive by removing red tape and lowering taxes and royalties. They assert that the industry has been held back by oppressive policies. Their leader, Danielle Smith, has also said she will give all Albertans a $300 "energy dividend" yearly once the budget is balanced. They "don't believe in global warming", by which I presume the Herald means they don't believe carbon emissions are causing global warming.

NDP: This pro-labour party supports refining more bitumen in the provinces. It would do this primarily by raising royalties 25% on bitumen that is exported. That sounds like it would violate NAFTA agreements to me, but I guess we won't find out since there's no way the NDP are getting in. The party also supports completing pipelines like Keystone and Gateway in order to expand the market for oil sands oil.

Liberals: The provincial Grits support the imposition of a carbon tax and using the proceeds to support green energy projects. Like the NDP, they also support refining more bitumen in Alberta and accessing other markets through pipelines.

My opinion: The PCs line up with my opinions more than any other party. They propose continuing to put significant money into environmental mitigation projects and research that, if nothing else, helps Alberta to justify the oil sands to outsiders. I think Redford's emphasis on involving other provinces is critical for the future of the industry - without broad Canada-wide support the oil sands are vulnerable to federal and international opposition that will inevitably come up. Their "don't tax and still spend" habit is concerning, but in the case of the oil sands Alberta can't afford to get it wrong. These research programs and environmental improvement experiments may cost billions of dollars with uncertain effectiveness but they are crucial to projecting a good image of the industry, which itself is crucial to the future of oil sands production. These environmental initiatives should remain generously funded.

I believe the Wild Rose would increase confrontation with the rest of Canada and the world. That they "don't believe in global warming" might play great in Alberta, but it ultimately weakens our hand because most outsiders consider such opinions to be backwards. I think the idea of handing out $300 cheques is stupid and populist, particularly in the face of the cuts to service funding that they are proposing.

The Liberal and NDP positions strike me as a little naive and simplistic. A carbon tax is a poison pill for the Liberals in Alberta, I'm surprised to see it surface in this election although I personally think it's a reasonable idea as long as it is applied transparently and fairly and is not overly onerous. The NDP pro-development position would seem to conflict with the federal NDP and their 25% increase on bitumen export royalties would likely hamstring many current projects and require the investment of billions of dollars into refineries that are already available south of the border. Further, I don't see anything wrong with allowing the US to have "skin in the game" when it comes to oil sands extraction since having them "on side" is critical to the industry's prospects.

I would have liked one of the parties to address the use of coal in Alberta. The province generates most of its electricity with the fuel which accounts for a large amount of our carbon emissions. I believe the province should push a switch to natural gas electricity generation because gas is abundant and cheap at the moment and using it could significantly reduce our carbon emissions. If Alberta could reduce coal emissions by a similar amount that oil sands emissions rise, I think we'd have an excellent counter-argument to environmentalists.

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