Varcoe: Notley and Kenney pitch divergent plans for ‘energy salvation’


Apples or oranges? Blue pill or red pill?

More than halfway through the provincial election campaign, NDP Leader Rachel Notley and United Conservative Party Leader Jason Kenney have unveiled the main planks of their energy platforms, laying out different strategies on how to revive Alberta’s sagging oil and gas sector.

While they agree on the need for more pipelines, they differ on fundamental issues such as carbon taxes and capping greenhouse gas emissions from the oilsands. They disagree on the NDP’s plan to invest in oil-by-rail and the UCP’s vision for overhauling Alberta’s energy regulator.

A new report released Wednesday by Raymond James points out the two parties are pursuing divergent approaches to “energy salvation.”

“They are just so different. It’s apples or oranges,” said analyst Andrew Bradford of Raymond James.

An examination of their plans and an interview with both leaders highlights the choices.

Standing in front of a pump jack near Turner Valley, Kenney announced a platform Tuesday to create energy jobs with a series of measures to jump-start the upstream oil and gas sector, which has struggled with low gas prices, weak investment levels and pipeline bottlenecks.

To encourage investment, the UCP would enshrine in law that all wells drilled would see the same royalty rate in perpetuity, shielding them from future royalty review changes.

Kenney pledged to speed up the approval of wells by the Alberta Energy Regulator, citing statistics that it takes longer to get one endorsed here than in British Columbia, Saskatchewan or the United States.

The UCP says it will cut the length of time it takes to get a well licensed by more than half. The party would also replace the AER’s board of directors.

“It’s not working … We have the slowest-moving approval process in North America, if not the world,” Kenney said in an interview.

“Their budget and the number of personnel has expanded dramatically, while their timelines have slowed down significantly.”

Notley says the regulator is already working on ways to streamline the process, such as moving toward fully adopting a “one-stop” online application platform for projects by the end of 2020.

“I think blowing up the (AER) board is only actually going to delay things longer,” she said.

To help the moribund natural gas industry, the UCP would appoint an associate minister for natural gas.

On Wednesday, Kenney announced a plan to create a Crown corporation to help Indigenous groups in Canada move forward on plans to buy a stake in pipelines and energy infrastructure.

The province would earmark up to $1 billion that could be available through loan guarantees, debt or equity to “facilitate and backstop” First Nations looking to invest in such projects.

“It’s basically the government of Alberta acting like an investment bank to facilitate Aboriginal financial participation,” Kenney said.

“If we can’t get significant Aboriginal buy-in for these projects, they will not happen.”

Notley said she would be open to examining different ways of supporting financing for Indigenous groups seeking ownership in resource projects.

The UCP has announced other energy elements, such as adopting a “fight back” strategy to oppose foreign funding of anti-oilsands groups, and previously unveiled policies to kill the carbon tax and cut corporate income taxes by one third.

For the NDP, their energy plan is more interventionist, setting its sights on growing the downstream energy sector. It wants to add more value to Alberta’s natural resources, creating additional demand for oil and gas within the province’s boundaries.

In the first week of the campaign, Notley pledged to double to $7 billion the government incentives to encourage construction of more petrochemical facilities, refining, partial upgrading and natural gas infrastructure.

The NDP contends this would create 70,000 jobs over the next decade and ignite $75 billion of investment.

“We are focused on what I’d argue is a long overdue strategy on actually moving up our activities, moving it up the value chain, so we are actually getting more energy diversification,” Notley said in an interview.

On Wednesday, Kenney said his party would respect contracts signed under the Petrochemicals Diversification Program, and “would be open to extending this program into the future.”

Last week, the NDP promised it would invest $1.35 billion to expand the province’s high-load transportation corridor over six years, more easily allowing the movement of large industrial vessels and infrastructure into the province.

The NDP’s four-year-old climate change policy remains a key component of its broader plan, which includes a carbon tax and a 100-megatonne cap on greenhouse gas emissions from the oilsands.

The two parties also differ wildly on the need for Alberta to take steps to boost oil-by-rail shipments.

Earlier this year, Notley’s government moved to spend $3.7 billion to lease rail cars to ship more crude out of the province, saying it would make a $2.2-billion profit on the arrangement.

“The crude-by-rail (plan), that is our medium-term investment designed to allow us to … let up on curtailment. And that’s a critical piece in terms of getting people back to work,” Notley said.

Kenney wants to cancel the rail agreement, insisting the private sector is best left to decide the matter.

For the energy sector, the vigorous debate comes as capital investment has fallen by half since 2014, before oil prices collapsed, to $40 billion last year. With oil production limits in place, capital spending is expected to drop another eight per cent this year.

Tristan Goodman, head of the Explorers and Producers Association of Canada, said oil and gas companies are looking for any solutions that improve market access, reform the regulatory system and bolster investor confidence.

“The state of the industry, it’s pretty difficult right now,” he said. “I’m glad to see all parties are focused on the energy agenda.”

Elections, they say, are all about choices.

For Alberta’s beleaguered energy sector — and the tens of thousands of workers in it — starkly different plans are now in front of voters.

Chris Varcoe is a Calgary Herald columnist.

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