New Alberta government all-in for oil and gas, beginning with repeal of carbon tax

Jason-Kenney Open for businessThe new UCP government of Alberta, led by Premier Jason Kenney,  kicked off  its legislative session agenda on May 22  with a Throne Speech  promising to “show the world that Alberta is open for business by restoring investor confidence and re-establishing the province as a job-creating investment magnet.” That “open for business” approach, applied to the oil and gas sector, includes some ominous statements : …”Protect and maximize the value of Alberta’s resources – including using, as necessary, the Preserving Canada’s Economic Prosperity Act” (Rachel Notley’s law which gives Alberta the right to restrict oil and gas exports to British Columbia)…. “Challenge those who misrepresent our industry and launch a public inquiry into campaigns to landlock Alberta’s energy”…and “Make life more affordable for Albertans by repealing the carbon tax and focusing climate change action on large emitters.”  More positively, “Be transparent and honest about how Alberta produces energy to the highest environmental, labour and human rights standards on earth” ….”Take action on climate change by introducing the Technology Innovation and Emissions Reduction Fund through regulation targeting large emitters.”  Columnist Chris Varcoe provides one Alberta viewpoint  in “Throne speech ‘roadmap’ to revive oilpatch hinges on pipelines” in the Edmonton Journal (May 23) .

The first legislation to be introduced, on May 22, was Bill 1, An Act to Repeal the Carbon Tax . The government press release claims that “Scrapping the carbon tax will free up nearly $1.4 billion of tax burden, create 6,000 jobs, save the average small business $4,500 annually and save Alberta families up to $1,150 a year.”  Even before the Bill was passed in the legislature, the Kenney government ended collection of the tax, on May 30.  In a press release titled “Albertans lose more than they gain with carbon tax repeal”, the Pembina Institute disagrees: “With the tabling of Bill 1 to repeal the Climate Leadership Act, the Alberta government is cutting existing jobs, stunting innovation, removing financial benefits for small- and medium-size businesses, families and communities, and is allowing greenhouse gas emissions to continue to increase. The government has yet to produce a plan that will make up for these losses and build on previous progress.” The National Observer summary is here  . And of course, there is also the issue that, by repealing Alberta’s own carbon tax, the government has made the province subject to the federal backstop carbon levy.

Without the revenue stream of the carbon tax, energy efficiency programs initiated by the NDP government are in jeopardy. On May 24, the Calgary Herald reported  “UCP steps back from scrapping NDP’s Energy Efficiency Alberta; will look at programs ‘with an open mind’” .  Although Jason Kenney derides the Energy Efficiency Alberta programs  as “subsidizing showerheads and lightbulbs”, in fact, the agency supports major economic programs, including those encouraging  the growth of Alberta’s solar industry.  Efficiency Canada documents the benefits for Alberta and points out that Alberta would be the only jurisdiction in North America not to have an energy efficiency program if it is scrapped .

On May 23, the Alberta legislature gave unanimous approval of a motion condemning federal bills C-69 , An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act,  and C-48, the Oil Tanker Moratorium Act . The Alberta government  claims that the legislation “poses a very real threat to hundreds of thousands of jobs in Alberta and across Canada, and the $16 trillion in economic potential within Alberta’s oilsands that could be lost if they proceed.”  After the Senate Committee tabled its controversial amendments to C-69, the Alberta party leaders sent a joint letter to Prime Minister Trudeau on May 28, stating: “While we remain concerned about the overall spirit of Bill C-69, we believe that with the inclusion of all these amendments, that the bill would be acceptable to the interests of Albertans” . The letter is summarized by Energy Mix in “Alberta Party Leaders Unanimously Back C-69 Amendments from Unelected Senate Committee”.  The marked-up version of Bill-69 with the Senate Committee amendments is dismaying to environmentalists;  a 2018  analysis of the original Bill-69 by Environmental Defence is here .  (The complicated issue of the unelected Senate’s hearings and recommendations regarding Bill C-69 will be the subject of a future WCR report.)

Other  new Alberta legislation in the ”Open for Business” agenda: On May 27,  Bill 2, the Open for Business Act,  promises to “reduce unfair burdens on businesses and give workers more rights in unionized workplaces. Recent changes to employment rules, such as requiring employers to provide holiday pay even if they are not open that day, created an unfair cost burden on job creators.”  The Alberta Federation of Labour reacted,  as did The Parkland Institute in a blog: “Bill 2 grinds wages, complicates payroll, and impedes union drives” .  On May 28, Bill 3: the Job Creation Tax Cut (Alberta Corporate Tax Amendment) Act  was introduced, promising to  lower the corporate tax rate from 12% to 8% over the next 4 years. The Alberta Union of Provincial Employees calls the tax cuts “corporate welfare” in Bill 3 Is UCP’s Second Gift In As Many Days To Wealthy Corporations.  And on May 29, Bill 4, The Red Tape Reduction Act was introduced.

None of these Bills have been passed or enacted as of May 30, although Premier Kenney announced that Albertans were “liberated” from the carbon tax as of May 30,  according to a CBC report , and retailers were forbidden from collecting it.

Are there lessons for Newfoundland in a Just Transition strategy for the U.K. Offshore oil industry?

sea-change-cover-212x300Sea Change: Climate Emergency, Jobs and Managing the Phase-Out of UK Oil and Gas Extraction was released on May 15 by Oil Change International, in partnership with Platform and Friends of the Earth Scotland.  The press release summary is here . The report examines the offshore oil and gas industry in the U.K., with special attention to the transition for workers and communities currently dependent on oil  – making it highly relevant to Canadians, especially Newfoundlanders.   Sea Change argues that  with the right transition policies, clean industries could create more than three jobs for every North Sea oil job at risk, which can enable an “equivalent job guarantee” for every oil worker.

The report contrasts two pathways available for the U.K. and Scotland to stay within Paris climate limits:   1. Deferred collapse, in which the countries “continue to pursue maximum extraction by subsidising companies and encouraging them to shed workers, until worsening climate impacts force rapid action to cut emissions globally; the UK oil industry collapses, pushing many workers out of work in a short space of time.” Or  2. Managed transition: in which countries “stop approving and licensing new oil and gas projects, begin a phase-out of extraction and a Just Transition for workers and communities, negotiated with trade unions and local leaders, and in line with climate change goals, while building quality jobs in a clean energy economy.”

To achieve the clearly superior “managed transition” pathway, the report recommends that the U.K. and Scottish Governments:

  • Stop issuing licenses and permits for new oil and gas exploration and development, and revoke undeveloped licenses;
  • Rapidly phase out all subsidies for oil and gas extraction, including tax breaks, and redirect them to fund a Just Transition;
  • Enable rapid building of the clean energy industry through fiscal and policy support to at least the extent they have provided to the oil industry, including inward investment in affected regions and communities;
  • Open formal consultations with trade unions to develop and implement a Just Transition strategy for oil-dependent regions and communities.

offshore oil rigOffshore Oil and Gas in Newfoundland: In Newfoundland, the importance of the offshore oil industry is evidenced by the fact that a  snap election was called shortly after the province reached agreement with the federal government on royalty payments on April 1.  The two governments announced agreement on  a “renewed Atlantic Accord”  – including the “Hibernia Dividend Backed Annuity”, valued at $2.5 billion for the province, according to a CBC report . This is new money that comes from Ottawa’s 8.5 per cent stake in the Hibernia offshore project, and will be paid out in annual installments over 38 years. According to the Q1 2019 Company Benefits Report ,   Hibernia operations employ 1,458 workers, of which 90.8% are Newfoundlanders.

The federal and provincial governments are also closely intertwined in a new consultation process which was launched for the Regional Assessment of Offshore Oil and Gas Exploratory Drilling East of Newfoundland and Labrador  in April, along with the Canada-Newfoundland and Labrador Offshore Petroleum Board. The provincial Minister is quoted in the federal press release:  “Our government is committed to working collaboratively with our federal partners to ensure responsible development of our oil and gas industry. The Regional Assessment is an important step towards exempting routine, low impact activities, such as exploration wells, where potential impacts and standard mitigations are well known, from federal assessment. This is another step we are taking to achieve the vision we set out in Advance 2030 to benefit all Newfoundlanders and Labradorians.”

The Advance 2030 document, released in 2018, is subtitled:  A Plan for growth in the  Newfoundland and Labrador Oil and Gas Industry, and is based on the government’s commitment “to resource development as a key economic driver and to positioning the industry for continued growth.”   In releasing the Advance 2030 report, the government announced some long-term targets, including the direct employment of at least 7,500 people in operations, drilling of over 100 new exploration wells by 2030, and doubling oil production by 2030.  That same Liberal government was returned to power as a minority government on May 16, and compiles news of oil and gas development  here .

 

NEB rules that Trans Mountain pipeline is in public interest, despite marine dangers and ignoring climate impacts

NEB reconsideration reportIn headline news on February 22,  Canada’s National Energy Board released the Report of its Reconsideration process (here in French), and for the second time, approved construction of the Trans Mountain Pipeline.  The NEB states: “…Project-related marine shipping is likely to cause significant adverse environmental effects on the Southern resident killer whale and on Indigenous cultural use associated with the Southern resident killer whale. The NEB also found that greenhouse gas emissions from Project-related marine vessels would likely be significant. While a credible worst-case spill from the Project or a Project-related marine vessel is not likely, if it were to occur the environmental effects would be significant. While these effects weighed heavily in the NEB’s consideration of Project-related marine shipping, the NEB recommends that the Government of Canada find that they can be justified in the circumstances, in light of the considerable benefits of the Project and measures to minimize the effects.”

The decision was expected, and reaction was immediate:  From The Energy MixNEB Sidesteps ‘Significant’ Impacts, Recommends Trans Mountain Pipeline Approval”  , which summarizes reaction;  from the National Observer in  “For a second time, NEB recommends approval of Trans Mountain pipeline expansion” (Feb. 22)  and  “NEB ruling sparks new vows to stop the Trans Mountain pipeline”.  An Opinion piece by Andrew Nikoforuk in The Tyee  is titled, “NEB ‘Reconsideration Report’ a New Low for Failing Agency” and from the Council of Canadians, “The fight to #StopTMX Continues as feds approve their own pipeline” .  From British Columbia, where the government has appeared as an intervenor against the pipeline , the Sierra Club reaction is here ; the Dogwood Institute pledged opposition (including a rally against the decision in Vancouver)  and pledged to  make the Trans Mountain project a major part of the federal election scheduled for Fall 2019;  and West Coast Environmental Law press release   also pledged continued opposition.  Albertans see it differently, with Premier Rachel Notley releasing a statement which sees the decision as progress, but not enough to be a victory, and states: “We believe these recommendations and conditions are sound, achievable, and will improve marine safety for all shipping, not just for the one additional tanker a day that results from Trans-Mountain.” It is important to note that not all Albertans are pro-pipeline: Climate Justice Edmonton is protesting with a  “People on the Path” installation along the route, and Extinction Rebellion Edmonton  actively protests fossil fuel development.

Meaningful Indigenous consultation still needed :  The NEB Reconsideration process was triggered by an August 2018 decision of the Federal Court of Appeal, which ordered the NEB to re-examine especially the potential impacts of marine shipping on marine life, and the potential damages of an oil spill. The Reconsideration report has resulted in 16 new recommendations on those issues, along with the existing 156 conditions.   Although the final decision on the project rests with Cabinet, the issue of meaningful Indigenous consultation is still outstanding from the order of the Court of Appeal.  According to the CBC, “Ottawa has met already with three-quarters of Indigenous communities during Trans Mountain consultation reboot” as of Feb. 20, but also according to the CBC, the Union of B.C. Indian Chiefs says “We still say no to the project. tiny house warriorsEven if one nation, one community says no, that project is not happening”  . And the Tiny House Warriors  continue to occupy buildings along the pipeline path, to assert their authority over the land.

Canada ignores GHG impacts while Australia rules against a coal mine on GHG grounds….  A motion was brought by the environmental group Stand.earth, demanding that the NEB reconsideration of Trans Mountain include consideration of its upstream and downstream greenhouse gas emissions, as had been done in the Energy East consultation. Stand.earth stated: “The board cannot possibly fulfill its mandate of determining whether the project is in the public interest without considering whether the project is reconcilable with Canada’s international obligations to substantially reduce GHG emissions.” An article in the National Observer,   “IPCC authors urge NEB to consider climate impacts of Trans Mountain pipeline expansion” summarizes the situation and quotes Tzeporah Berman, international program director at Stand.earth, as well as Marc Jaccard and Kirsten Zickfeld, two professors from Simon Fraser University.  On February 19, the National Energy Board ruled on the Stand.earth motion, refusing to expand the scope of their reconsideration. Council of Canadians reacted with  “NEB climate denial another Trudeau broken promise”  .

It is doubly disappointing that Canada’s National Energy Board declined to include climate change impacts in its assessment, in the same month that the Land & Environment Court of New South Wales, Australia upheld the government’s previous denial of a permit for an open cut coal mine.   According to a report in The Guardian,     the decision explicitly cited the project’s potential impact on climate change, writing that an open-cut coalmine in the Gloucester Valley “would be in the wrong place at the wrong time.… Wrong time because the GHG [greenhouse gas] emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions.”  The decision was also covered in: “Court rules out Hunter Valley coal mine on climate change grounds” (Feb. 8) in the Sydney Morning Herald, and from the  Law Blog of Columbia University: “Big Climate Win Down Under: Australian Court Blocks Coal Mine Citing Negative Impacts of Greenhouse Gas Emissions”.

British Columbia sets new GHG reduction targets, reviews environmental assessment process

Amidst the noise and fury of the B.C.-Alberta feud over the Kinder Morgan TransMountain pipeline,  the province of British Columbia is moving forward with reform of its climate change policies. On April 25, the  B.C. Climate Solutions and Clean Growth Advisory Council released a detailed letter to the Minister of Environment and Climate Change Strategy , describing the Council’s principles, supporting much of the government’s current direction, and making recommendations, based on the 2015 recommendations of the province’s Climate Leadership Team. Shortly thereafter, on May 7, a government press release  committed to  a new provincial climate action strategy to be released in autumn 2018, including plans for GHG emission reduction  for buildings and communities, industry and transportation sectors.

With that same press release, the government announced Bill 34, the Climate Change Accountability Act,  which amends the Greenhouse Gas Reduction Targets Act (2007), repealing the emissions reduction target for 2020 (generally deemed unachievable)  and sets new targets: reduction of GHG’s by 40% from 2007 levels by 2030, 60% by 2040, and 80% by 2050.  Accountability looms large in the responses to Bill 34.  The Pembina Institute  notes the failure of recent GHG emissions reductions, and calls for “a robust accountability mechanism to ensure history doesn’t repeat itself ”. In addition, Pembina notes that any development of emissions-intensive industries, such as liquefied natural gas, would jeopardize the province’s climate progress.

In “Looking for accountability in BC’s Climate Change Accountability Act”,  West Coast Environment Law reviews B.C.’s emissions reduction progress , summarizes responses by other environmental groups to Bill 34, and recommends how the government can incorporate principles of accountability and transparency in its new policies.  Similar concerns are discussed in “A Carbon Budget Framework for BC: Achieving accountability and oversight”  by Marc Lee, in CCPA’s Policy Notes (May 22).

Another policy issue under review in B.C. is environmental assessment, with a 12-member advisory committee appointed in March 2018, a public discussion paper promised for May, and reforms to come in Fall.  The government portal to the “Revitalization” process is here ;  “B.C. Moves Ahead With Review of Controversial Environmental Assessment Process”  (Mar 8) summarizes the situation.   On May 9,  twenty-three environmental, legal, social justice and community organizations released  Achieving Sustainability: A Vision for Next-Generation Environmental Assessment in British Columbia , which calls for an independent environmental assessment body which will involve the public, and require decision-makers to demonstrate that their decisions are based on science and Indigenous knowledge. A summary, with links to more detailed discussion  is provided by West Coast Environmental Law.  Analysis and practical examples are provided by Sarah Cox in  “Time For a Fix: B.C. Looks at Overhaul of Reviews for Mines, Dams and Pipelines”, which  appeared in April in the newly-named newsletter from DeSmog Canada, The Narwhal.

National Energy Board is a casualty of Canada’s new legislation for environmental assessment

On February 8, following 14 months of consultation and review, the Minister of Environment and Climate Change introduced the mammoth Bill C-69 An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts  . The government press release from Environment and Climate Change Canada highlights these talking points about the proposed legislation-  It will:  Restore public trust through increased public participation; Included transparent, science-based decisions; Achieve more comprehensive impact assessments by expanding the types of impacts studied to include health, social and economic impacts, as well as impacts on Indigenous Peoples, over the long-term. Also, it promises  “One project, one review” – through a new Impact Assessment Agency, (replacing the Canadian Environmental Assessment Agency) which will be the lead agency, working with a new Canadian Energy Regulator (replacing the National Energy Board), as well as the Canadian Nuclear Safety Commission and Offshore Boards.  Further, it will make decisions timely; Revise the project list; Protect water, fish and navigation ; and Increase funding.  The detailed government  explanation of the changes  is here ; other summaries appeared in the National Observer in “ McKenna unveils massive plan to overhaul Harper environmental regime”  ; “Ottawa to scrap National Energy Board, overhaul environmental assessment process for major projects”   in CBC News; and in the reaction by The Council of Canadians, which expresses reservations about the protection of navigable waters, and these “Quick Observations”:
“1- the current industry-friendly Calgary-based National Energy Board would be replaced by a proposed Calgary-based (and likely industry-friendly) Canadian Energy Regulator
2- it includes the ‘one project, one review’ principle as demanded by industry
3- assessments of major projects must be completed within two years, a ‘predictable timeline’ also demanded by industry
4- the bill notes the ‘traditional knowledge of the Indigenous Peoples of Canada’ but does not include the words ‘free, prior and informed consent’, a key principle of the United Nations Declaration on the Rights of Indigenous Peoples
5- McKenna said that no current projects (including the Kinder Morgan pipeline which crosses more than 1,300 water courses) would be sent back to ‘the starting line’
6- the government is seeking to implement the law by mid-2019.”

An overview of other reaction appears in   “New Federal Environmental Assessment Law Earns Praise from Climate Hawks, Cautious Acceptance from Fossils” from the Energy Mix.  Reaction from West Coast Environmental Law (WCEL) is here ; and from  Environmental Defence here .  The Canadian Environmental Law Association sees some forward progress but warns that “the Impact Assessment Act is marred by a number of serious flaws that must be fixed in the coming months.”    Reaction from the Pembina Institute says “Today’s legislation improves the federal assessment process by centralizing authority for impact assessment under a single agency; providing a broader set of criteria for assessing projects including impacts to social and health outcomes; and removing the limitations on public participation that were put in place in 2012…. Building on today’s legislation, we would like to see progress towards the establishment of an independent Canadian Energy Information Agency to ensure that project reviews include Paris Agreement-compliant supply and demand scenarios for coal, oil and gas.”

Companion legislation, also the product of the lengthy Environmental Regulation Review, was introduced on February 6, Bill C-68 An Act to amend the Fisheries Act and other Acts in consequence  (Press release is here ; there is also a Backgrounder comparing the old and new legislation). Most importantly, Bill C-68 restores a stronger protection of fish and fish habitat – the HADD provision – to the definition used before the 2012 amendments by the Harper government. (HADD = the harmful alteration, disruption or destruction of fish habitat).  Reaction is generally very favourable:   The David Suzuki Foundation says : “The most important changes we were looking for are part of these amendments” and West Coast Environmental Law says that the proposed legislation   “meets the mark”.  Reaction is also favourable from the Ecology Action Centre in Halifax . And from the Alberta Environmental Law Centre, some background in “Back to what we once HADD: Fisheries Act Amendments are Introduced” .

no consentAnd finally, where does the new environmental assessment process leave Canada’s Indigenous people?  The new legislation includes the creation of an Indigenous Advisory Committee and requires that an expert on Indigenous rights be included on the board of  the new Canadian Energy Regulator body, according to a CBC report, “Indigenous rights question remains in Ottawa’s planned environmental assessment overhaul” . Minister McKenna is also quoted as saying the government will “try really hard” to conform to the principles of the UN Declaration on the Rights of Indigenous Peoples   – a statement that is not satisfactory to some Indigenous leaders.    See “Indigenous consultation and environmental assessments” (Feb. 7)  in Policy Options for a discussion of the issue of “free, prior and informed consent”.  On February 7, Private member’s Bill C-262, an Act to Harmonize Canada’s Laws with the United Nations Declaration on the Rights of Indigenous Peoples passed 2nd reading in the House of Commons.