A regulatory regression in Canada

If nothing else, the recent Canada-Alberta agreement “to strengthen energy collaboration and build a stronger, more competitive and sustainable economy,” has generated more than a little noise.

Business is happy, Alberta Premier Danielle Smith is happy, Indigenous groups are unhappy, environmental groups are unhappy, and Green Party Leader Elizabeth May remains unhappy.

But before the public discourse gets too heated, we should probably take a closer, objective look at this rather curious document.

The two parties are committed to making Canada an “energy superpower.” Alberta gets to produce more oil and gas; Ottawa gets a promise of reduced emissions intensity. Of course, if you lower the emissions from producing a barrel of oil while producing more barrels, total emissions can — and will — increase. Ah, but carbon will be sucked from the air and “sequestered” in the depths of the Earth.

The centrepiece of the memorandum of understanding (and the centre of contention) is a commitment to approve and build one or more pipelines to tidewater — and a sort of promise to remove the federal ban on inner coastal tanker traffic — funded by private capital and supported by Canada’s streamlined environmental approvals process.

The possibility of lifting the coastal tanker traffic ban isn’t the only assault on environmental regulation contained in the agreement. Canada promises to suspend federal clean energy regulations, eliminate the oil and gas emissions cap, amend the Competition Act to eliminate measures to discourage “greenwashing,” and undertake “consultations with Alberta on the development and implementation of federal regulatory or policy measures that might impact Alberta industry” (and rest assured, none of these measures will involve strengthening environmental protection).

The memorandum also commits to harmonizing the Alberta and federal project review processes to eliminate duplication and overlap, something attempted — unsuccessfully — in the early ‘90s through the Canadian Council of Ministers of Environment. This may be the one positive regulatory outcome of the memorandum, assuming that harmonization applies — as it must — to the rest of Canada.

These changes are predicated on the fact that industrial investment requires regulatory certainty, which indeed it professes to require; but not just certainty of process, certainty that requirements will not be too stringent, stringency being whatever might cut into profit.

Since this agreement has been stylized as an agreement about major energy projects, let’s have a look at the four being proposed.

Getting all the headlines is the “construction of one or more private sector constructed and financed pipelines, with Indigenous “co-ownership.” The likelihood of this actually happening is a long shot at best. The B.C. government will only co-operate if the in-shore tanker ban remains in place, rendering any pipeline a pipeline to nowhere. Indigenous “consent” is to be bought with co-ownership, difficult to obtain and in danger of evaporating at the next council election. The federal streamlined approval will not totally eliminate legal uncertainty (Indigenous rights, residual B.C. legislation, the courts), and obtaining social licence will be a nightmare. Finally, even if supportable approval is obtained, will billions of dollars of private investment rush to a project that may come on stream 10 years or more from now, when the energy landscape could be totally transformed?

The next project is industry’s answer to their emissions problem, “the construction and financing of the world’s largest carbon capture, utilization and storage project.” This largely depends on extracting CO2 from the emission stream and the atmosphere and injecting it deep beneath the Earth’s surface where it will remain — forever. The enormous sub-surface repositories required to safely and permanently store this gas have not been delineated nor have the huge energy requirements and associated costs. To say this is an unproven technology is an understatement; it is likely, at the scale required, an infeasible technology.

Alberta has ambition to get in on the artificial intelligence boom (bubble?) and proposes the “construction of thousands of megawatts of AI computing power.” Thousands of megawatts may be a conservative estimate. Ireland has made this leap into the beyond and now 20 per cent of the country’s electrical energy is feeding the new AI data centres. Ottawa’s contributions will be the revival of Canada’s nuclear power program, at least in Alberta, and although Canada’s nuclear reactor technology remains the most reliable and safest in the world it lacks social acceptance; and support for energy connections to B.C. and Saskatchewan to access “low carbon power.”

The final project supports connecting Alberta, Saskatchewan and B.C. to move “low carbon energy” — Alberta and Saskatchewan have virtually no such surplus energy — to Alberta to feed its data centres. Had the parties been thinking — and the evidence seems to suggest they were not — they could have both committed to promoting and enabling a national power grid that would benefit not just Alberta, but all of Canada.

So, at the end of the day what have we got? Pipelines not likely to be built; a carbon capture and sequestration dream that no one should accept as a substitute to real emissions reduction; an AI dream that partly depends on a nuclear program that’s unlikely to produce a new reactor in less than 20 years; and an electrical grid between three provinces when a national one is required.

Oh, and a giant step backward on environmental regulation. Western alienation must be addressed. This probably is not the best way to do it.

Norman Brandson is the former deputy minister of the Manitoba departments of environment, conservation and water stewardship.