Will Alberta’s NDP Government Try to Save the Planet or the Economy?

It's near impossible to find a modern scenario as reminiscent of the Parable of the Prodigal Son as present-day Alberta.

The province has been blackout drunk on oil money for decades. All conventions of modern statehood have been disregarded, with the comatose citizenry convinced they deserve hospitals and highways without paying for them. Unfortunately, Alberta's bread and gooey black butter (the gargantuan and highly profitable energy industry, typically responsible for three-quarters of exports and over 120,000 jobs) has turned out to be quite the environmental clusterfuck, resulting in staggering amounts of greenhouse gas emissions, habitat destruction, and sludge pits.

Now, the province is starting to realize that its debaucherous ways can't be maintained. Next up: hangover, potential detox, attaining nirvana, all that good stuff.

"It's a cruel addiction," says Andrew Nikiforuk, journalist and author of Tar Sands: Dirty Oil and the Future of a Continent. "Governments love oil and gas: what other commodity on the planet is going to generate as much revenue for their coffers other than heroin and cocaine and meth, which, technically, governments can't tax?"

In May, the NDP stormed in from stage left with dynasty-toppling vigour. Yet the massive change didn't solve the fundamental problem Alberta faces: how to convincingly juggle economic and environmental priorities. Swing the pendulum too far one way and jobs and tax revenues in the important sector dry up; too far the other way and emissions skyrocket and the world burns.

There is a potential upside, however: If a place like Alberta can figure out its shit, then most other jurisdictions should be able to learn from whatever reformation the province undergoes. Rather than seeing Alberta as the proverbial canary in the coal mine for our environmental apocalypse, we should think of it as the guinea pig who's forced to solve the unfairly convoluted maze before any other creatures are dropped in.

"We're so dependent on this resource and our ability to get it to market," says Ricardo Acuña, executive director of the Parkland Institute, a left-leaning think tank situated in the University of Alberta. "It so directly flies in the face of what we need to do for environmental issues and climate change. I don't think there's any other jurisdiction in Canada, perhaps North America, that's facing the same kind of conflict or internal pressures."

Bitumen's hellishly difficult to extract and refine, producing 20 percent more emissions on average than conventional crude according to a recent US Department of Energy study. Jennifer Winter, associate director of energy and environmental policy at University of Calgary's School of Public Policy, notes there have been "incredible strides in technology" over the years, reducing total emissions per-barrel by 28 per cent between 1990 and 2012. Chris Ragan, associate professor of economics at McGill University and chair of Canada's Ecofiscal Commission, notes that all provinces sport a "family business" of sorts: think Ontario's auto manufacturing or beer in BC. Unfortunately, Alberta's "family business" will still account for the largest chunk of the country's emissions by 2020.

"Alberta wants to be able to sell its oil," Ragan says. "Even if it doesn't expand by one drop it's still developing 3.5 million barrels a day. It would like to be able to produce that and sell it in a world that is going to continue to use oil for a long time. That's going to be a challenge for Alberta as the world moves towards lower carbon intensity oil."

But there are a few potential role models. As environmental groups geared up to watch premiers convene and unrepentantly worship pipeline expansion at the recent Canadian Energy Strategy summit, news reports started circulating that Saudi Arabia—the world's largest oil producer and environmental pariah—was kickstarting intense investments in solar power. Apparently, the plan is to switch all electricity demand over to renewables by 2040 or 2050, a huge shift for a country that relies on oil and natural gas to power air conditioning and lighting. Then there's Germany, which sports the fourth largest economy in the world: it's guided by the energiewende ("energy transition" in German) that uses feed-in tariffs to aggressively incentivize renewable electricity.

The closest—albeit imperfect—potential source of inspiration is British Columbia, which has featured a revenue-neutral carbon tax since 2008; fossil fuel consumption has dropped by over 17 percent while economic growth has proceeded unhindered. It's why Winter and Ragan both advocate strongly for a higher carbon tax: "It would tilt the direction away from the marginal producer in the oilsands or marginal well drilled, meaning capital will be reallocated to something different," says Winter. The climate change panel chaired by the University of Alberta's Andrew Leach will likely advise the NDP cabinet on the subject when it delivers its fall report. But Nikiforuk suggests the tar sands shouldn't grow regardless of tweaks to the system.

"I don't think the project can expand at this point: it's folly to do so," he says. "The market signals are clearly telling the province that cheap oil is going to be here for a long, long time. The foreign markets for bitumen are disappearing. The province has to do something much more dramatic in terms of curbing carbon emissions."

It's unclear what the provincial government's long game looks like. Many environmental groups voiced disappointment at the removal of the commitment to reduce absolute emissions from the Canadian Energy Strategy summit and Notley's glowing endorsement of the oil sector at the Calgary Stampede. The appointment of Leach, a bit of a superstar in environmental economics in a Ben Wyatt kind of way, boosted her case. But given that Alberta's performance will make or break Canada's attempt to escape its current status as climate criminal, there's going to have to be some seriously monumental changes.

"Rachel Notley and the rest of her MLAs want to be re-elected, of course," Winter notes. "They want to prove that they're more than the next best alternative to the PCs. I think they are being very cautious in their messaging, not wanting to scare away investment—not only in the oil sands but investment in Alberta. They're not trying to destroy the province. They don't want it to go into a recession."

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