What the NDP's Alberta Win Means for Energy and Climate Change

In a stunning and historic move, Alberta elected a majority New Democrat government on Tuesday.

The Progressive Conservatives, which finished in third place, consistently mismanaged the environmental and climate change file.

Ralph Klein, controversial premier from 1992 to 2006, despised the Kyoto Protocol and infamously flipped the bird at an activist who was protesting against a new Al-Pac pulp mill. Subsequent premiers often talked about improving environmental regulations, but seldom acted on it.

It’s yet to be known how different things will be under the NDP, but their win certainly marks a significant shift in sentiment.

Together, we need to start down the road to a diversified and resilient economy,” newly crowned Alberta Premier Rachel Notley said in her victory speech. “To end the boom-and-bust roller coaster ride we’ve been on for far too long. It won’t happen overnight. But we must start, and we will.”

Notley also noted that she looks forward to working with Prime Minister Stephen Harper and other premiers on a “national approach to the environment and to Canada's energy sector that builds bridges and opens markets.”

Notley has said she won’t continue to promote the TransCanada Keystone XL and Enbridge Northern Gateway pipelines, but is in favour of Kinder Morgan’s Trans Mountain and TransCanada’s Energy East.

It’s unclear, so far, what the NDP will do with the oil and gas sector, particularly the oilsands which is the fastest growing source of GHGs in Canada,” said Ed Whittingham, executive director of the Alberta-based Pembina Institute. “We’re eagerly awaiting their plan for dealing with it.”

The NDP’s platform was vague when it came to greenhouse gas emissions, saying the party “will take leadership on the issue” and “first steps will include an energy efficiency strategy and a renewable energy strategy.”

Those are both crucial policy points, especially when one considers the PCs have delayed the release of their renewable energy strategy since 2008. The climate change framework — originally intended for release last October — was allegedly being released in June. It’s unclear what the change in government will mean for that, or what the NDP’s plan is for augmenting the current, esoteric carbon levy.

What we want now is for the new government is to really show the immediacy of the problem and tell the bureaucrats that those plans have to get done,” Whittingham said regarding the framework.

The NDP also committed to phasing out coal-fired power stations (the incredibly polluting fossil fuel is currently used for 43 per cent of electricity generation in the province) and expressed an intention to implement a green retrofitting loan program to help Albertans reduce energy usage via installation of solar and new furnaces, windows and doors.

The NDP also committed to diverting remaining money allocated to carbon capture and storage — a controversial technology former premier Jim Prentice once dubbed a “science experiment” — to public transit.

A more contentious component of the NDP’s platform involves a review of non-renewable resource royalties — called the “Resource Owners’ Rights Commission” — which would examine the amount of money the province makes from its oil and gas resources. While such a review wouldn’t automatically translate to increases in royalties (which sunk former premier Ed Stelmach), it does have energy sector CEOs concerned.

Any money made from “incremental royalty revenue” would be channelled into the Heritage Savings Trust Fund, the province’s sovereign wealth fund, which would then be used to invest in renewables or diversify the economy. That particular idea was critiqued by Andrew Leach, professor of energy policy at the University of Alberta, in a detailed Maclean’s feature on the NDP’s energy policies.

If the premise is to use resource revenues to provide low-cost capital to otherwise non-viable economic activity in the province today, I’d call that spending and dispense with the need to flow the dollars through a fund,” he wrote.

The NDP’s infatuation with refining raw bitumen is something else that Leach (as well as fellow Maclean’s columnist Colby Cosh) has critiqued. In addition to being potentially uneconomical due to sheer investment costs and lack of comparative advantage (contrasted with, say, Texas or Louisiana), refineries would only increase Alberta’s reliance on petroleum products and services, writes Leach.

A surprising omission in the NDP’s platform was details about oilsands monitoring and regulation, something the PCs were often criticized for. The Alberta Environmental Monitoring, Evaluation and Reporting Agency was created in 2014 as a joint agency between the federal and provincial government, with funding from the energy sector.

But in the October 2014 auditor general’s report, it was noted that the agency’s annual report for 2012-2013 was delayed 15 months, “lacked clarity and key information and contained inaccuracies.” As a result, the auditor general suggested the governments could “fail to carry out their plan for monitoring the environmental impacts of oil sands development.”

At this stage, there are more questions than answers about what the NDP will mean for Alberta on the energy and environment file — but one thing’s for sure: those concerned about climate change have more reason to hope today than they did yesterday.