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Oil and gas, electricity emissions remain a challenge for Ottawa-Alberta relationship

There is no line in the sand between his government and Alberta over energy and climate policies but there is also still a lot of daylight in their respective visions, Natural Resources Minister Jonathan Wilkinson said Monday.

There is no line in the sand between his government and Alberta over energy and climate policies but there is also still a lot of daylight in their respective visions, Natural Resources Minister Jonathan Wilkinson said Monday.

Wilkinson was in Calgary with Intergovernmental Affairs Minister Dominic LeBlanc for a face-to-face meeting with Alberta Premier Danielle Smith. It was the first Alberta-Ottawa sit down since Smith’s United Conservative Party was re-elected last month.

The two governments have had a rocky relationship amid concerns in Alberta about Ottawa’s climate-change policies and plans for a transition to a net-zero emissions economy.

Before the meeting Smith said Ottawa’s plan for an emissions-free electricity grid by 2035 and a cap on oil and gas sector emissions that could be announced before the end of June aren’t realistic for her province without a massive cost to the economy and jobs. She said she was drawing a line in the sand that Ottawa can either get on board Alberta’s plan for getting to net-zero emissions by 2050, or it can get out of the way.

“I put forward our emissions reduction and energy development plan for a reason, because I’m sending the message to Ottawa that we are going to chart our own pathway to meet our national commitment of being carbon neutral by 2050 and they’ve got to come into alignment with us,” she said at a news conference.

Following the meeting Wilkinson said they did not “fully get to a meeting of minds.” But he was open to trying to understand what Alberta’s concerns are and “to see the extent to which we may be able to address them.”

“I think it’s a mistake for anybody to be drawing a clear line in the sand saying, you know, we’re not willing to compromise on anything,” said Wilkinson.

“I’ve never been somebody who takes those kinds of polar positions. You know, we clearly are interested in moving forward with electricity regulations to see a clean grid, because we think that underpins the economy in the future. We have committed to a cap on oil and gas emissions. But there are lots of different ways to do that. There are flexibilities and how you design it.”

He did not say whether that would mean changes to the timelines for those policies.

Net-zero is the term used for when any greenhouse-gas emissions remaining are captured either through nature or technology, so they don’t end up in the atmosphere and contribute to more global warming.

Both Canada and Alberta are targeting to be net-zero by 2050. Canada however has multiple earlier targets along the way, including a 2030 target that wants to see emissions from the oil and gas sector cut by more than 40 per cent.

In a statement late Monday, Smith called the meeting “very constructive” but said Alberta made clear its concerns about the oil and natural gas emissions cap and 2035 net-zero power grid plans.

Smith said she instead proposed a bilateral working group be set up immediately between Ottawa and the province to work on ways to incentivize carbon capture and other emissions-reducing infrastructure for the fossil fuels and electricity sectors. The group would also set “reasonable and achievable milestones” to reduce emissions in those sectors through to 2050, she said.

“Our delegation also made clear the federal government must not unilaterally legislate any oil and natural gas emissions cap or electricity regulations impacting these areas of exclusive provincial jurisdiction without Alberta’s approval,” Smith’s statement said.

One area of contention that seems to have been resolved is the federal sustainable jobs legislation, which Wilkinson tabled last week. Last winter Smith came out swinging against the promised bill, saying it was Ottawa’s intention to use the legislation to kill Alberta’s energy sector.

She said scrapping the jobs transition plan was a “non-negotiable condition” of Alberta investing more for carbon capture and storage in the oilsands.

The bill itself is a relatively bureaucratic bundle of advisory councils and reporting requirements for the government to show a plan every five years for protecting and creating energy jobs as the country and world transition to an economy without emissions.

Initially called the “just transition” plan, the bill has been renamed “sustainable jobs,” which the government says better reflects its intention.

On Monday Smith’s concerns about that bill seemed to have mostly vanished, including because of the name change. She said calling it a just transition “set the expectation of phasing out oil and natural gas workers completely.”

“We told them that’s not on, we are going to be phasing out emissions, we are not going to be phasing out oil and natural gas jobs. And they seem to have acknowledged that with their legislation that came forward, that includes opportunities for us to invest in carbon capture, utilization and storage, hydrogen, LNG export, and those are the things that I think we can find in common.”

Wilkinson said the meeting included a lengthy discussion of carbon capture, a developing technology to trap carbon emissions from big industrial plants, such as electricity generating stations and oil and gas extraction operations, and then funnel them back underground.

He also said Ottawa is very interested in working with Alberta on planned hydrogen and net-zero petrochemical plants.

“Certainly, you know, there are some areas where we have differences, and we’re going to need to work our way through those differences,” he said. “But in general, I think it was a good faith opportunity to both sort of share aspirations that we agree on, and to put on the table some of the things that we don’t and to talk about how we might move those things forward.”

Smith’s statement also said there was “constructive discussion” on the need to work faster to develop a regulatory regime for small modular nuclear reactors, and to work together with British Columbia on a plan to increase export of liquefied natural gas to international markets.