Alberta Premier Danielle Smith speaks to the Economic Club of Canada in Ottawa on Feb. 5.Sean Kilpatrick/The Canadian Press
Duane Bratt is a political science professor in the department of economics, justice and policy studies at Mount Royal University in Calgary.
Investment creates jobs, expands tax revenue, produces spin-off benefits, and, in the case of electricity generation, lowers consumer prices. This is why Alberta has international trade offices and why the Premier and cabinet make foreign trips. The province also markets itself to investors: low-housing costs (at least when compared with Toronto and Vancouver), educated work force, political stability, high-quality amenities and gorgeous scenery.
Therefore, it is surprising that Alberta announced a set of rules on Feb. 28 designed to drive out billions of dollars in potential investment in one globally-growing sector: renewable energy.
In August, 2023, the UCP government announced a seven-month moratorium on renewable energy projects. This halted an estimated 118 projects at some stage of planning, worth a combined $33-billion, while the Alberta Utilities Commission (AUC) designed new rules. On Wednesday, those new rules were rolled out. They were designed to protect prime agriculture land from solar and wind farms, protect Alberta’s “pristine viewscapes,” provide funds for reclamation, and fund municipalities’ participation in AUC hearings (paid for by project proponents).
On the surface, there is nothing wrong with these rules. However, dig deeper down and there are fundamental problems.
First, these rules will make achieving future renewables projects very difficult. For example, the windiest part of the province is in the south. But the 35-kilometre buffer zone around protected areas means that about 75 per cent of Southern Alberta would be off limits to wind farms.
Second, the new rules only apply to renewable energy, and not to oil and gas development, which dominates the province. For example, Alberta has over 170,000 orphaned and abandoned wells and it is estimated that it will cost at least $60-billion (and likely more) to properly clean them up. Strict regulations around wind and solar reclamation are fine, but should they not also apply to the much more serious problem of abandoned oil wells?
Third, Alberta is telling private landowners what they can and cannot do with their property. Tellingly, landowners find it very difficult to prevent oil and gas development on their property (because they do not own the subsurface rights), but they could be blocked from allowing a solar or wind farm on their property. For a UCP government that often talks about the sanctity of property rights, removing them to harm a particular sector is instructive.
Fourth, while the purpose of the rules is to preserve prime agricultural land, an analysis shows that if all the new solar farms needed to get Alberta to net-zero electricity by 2035 were on unirrigated crop land, their total footprint would only be 0.15 per cent.
At the heart of Alberta’s new rules is the fact that the provincial government simply does not like renewable energy. Prior to the moratorium, Alberta, at over 75 per cent, was the top destination for renewable energy projects in Canada. However, the August, 2023, mortarium sent a strong signal to renewables companies that they should consider investing elsewhere. The new rules solidified that point.
Why is renewables investment undesirable? Well, renewables are seen as competitors to oil and gas. In contrast, oil and gas companies support new technologies such as carbon capture and storage and small modular reactors (which have not had additional regulations attached to their development), because those are seen as complementary.
There have been accusations for years that the Alberta government has been captured by the oil and gas sector. For instance, the Alberta Energy Regulator is widely seen as an organization that is not independent, but overtly supports the industry. In addition, current and former oil and gas executives and lobbyists are situated throughout the present government, including Premier Danielle Smith and other elected politicians, staffers, and advisers.
Soon after becoming Premier in October, 2022, Danielle Smith even floated an idea that she first proposed as a lobbyist: giving multimillion-dollar royalty breaks to oil companies to clean up the wells that they were already legally responsible for. Ms. Smith has repeatedly proclaimed that Alberta is a “natural gas province.”
And of course, the repeated political fights with Ottawa over oil pipelines, net-zero electricity regulations by 2035, or an emissions cap for the oil industry. These fights have included fierce rhetoric, legal challenges, and even the passing of the Sovereignty Act, which was designed to thwart federal laws and policies that the province believes are unconstitutional. The decision on renewables is just another important data point.
The UCP government brands itself as a pro-business party that provides significant benefits to the Alberta economy. But by taking concrete steps to prevent billions of dollars in investment – because they do not like the type of investment, for spurious reasons – the UCP is showing itself to be a government that can be nothing else other than pro-oil and gas.