Although the meeting was constructive, there are still several concerning issues that need to be resolved if Alberta and the federal government are to reach an agreement on an emissions-reduction plan that will simultaneously secure a reliable and affordable electricity grid, protect Alberta workers and drive economic growth in our energy sector for decades.
The positive news is the federal government has agreed to immediately form a bilateral working group with the Alberta government to work on an aligned framework to incentivize investment in carbon capture, utilization and storage as well as other emissions-reducing technologies.
This group would also work to develop a regulatory framework for the construction and use of small modular reactor technology in our province and to secure credit for carbon reduction through increased LNG exports to international markets. Article 6 in the Paris Accord allows for jurisdictions to receive credit for reducing emissions in other countries.
These are welcome developments.
However, the federal government has yet to formally recognize Alberta’s exclusive jurisdiction to set its own emissions-reduction targets and milestones on the path to a carbon-neutral energy sector and electricity grid by 2050.
They continue to set targets for a 42 per cent reduction in energy sector emissions by 2030 and a net-zero electricity grid by 2035. Both of these targets are unachievable, will drive billions of investment out of Alberta, massively increase electricity costs and result in the loss of tens of thousands of Alberta jobs.
We also understand the federal government is set to release its draft so-called ‘clean electricity’ regulations (CER) for feedback in the coming weeks, and which do not initially include a carve-out for provinces like Alberta, which needs more time to transition to a carbon-neutral power grid due to our reliance on natural gas-fired electricity generation.
It will be critical after this initial feedback period is complete that Ottawa grant Alberta’s requested CER carve-out until the working group has reached an agreement on decarbonizing our power grid that Albertans can afford and support.
Albertans have borne the significant cost of replacing all coal-fired electricity generation with natural gas seven years ahead of schedule, for which ratepayers have already paid billions in compensation and will continue to make these compensation payments through 2030.
Alberta has sovereign and exclusive constitutional jurisdiction to regulate our energy and electricity industries. This is non-negotiable.
We have asked the federal government to come to the table in good faith and to assess the realities of our power grid and the true magnitude of being the fifth-largest producer of oil and gas in the world.
If Ottawa does not recognize and support Alberta’s exclusive right to regulate these sectors of our economy, our province will have no choice but to use alternative policy options to protect our rights independent of federal interference.
Our sincere hope is that the newly formed federal and provincial working group will be able to facilitate an agreement that will align Ottawa’s efforts with the Alberta government’s Emissions Reduction and Energy Development Plan.
Failing to reach an agreement on these matters would be an unprecedented missed opportunity that would cost our country tens of billions in economic investment and countless jobs from coast to coast. We look forward to starting the working group as soon as possible.