'Failure of Alberta to act' boosts need for national energy plan: experts

Tensions between Alberta and the federal government are slowing Canada's shift to cleaner forms of energy, say experts, warning Ottawa and the fossil fuel-producing province need to align quickly on a nationwide approach.

"We struggle in this country with a holistic national view on energy policy," Lance Mortlock, Ernst & Young Canada's managing partner for energy, told Yahoo Finance Canada in a recent interview. "We need a national energy strategy."

His Pathway to the 2050 Energy System report, released last month, urges fast action and closer coordination between the provinces and Ottawa. It calls for a plan "throughout the country with an aligned mindset" spanning the energy, financial, transportation, mining, construction, and agriculture sectors to meet Canada's goal of net-zero emissions by 2050.

"The 2050 energy system is in the near future, and Canada has the potential to transform the economy to be more environmentally sustainable and financially prosperous," Mortlock and his colleague Anne-Marie Hubert wrote in the report. "Canada still requires a more unified voice and vision on how to transition to a less carbon-intensive economy."

EY's analysis echoes the International Energy Agency's (IEA) view last year that "coordination across provinces and with the federal government [is] an essential element to successful energy transition outcomes." The IEA says this is due to Canada's "highly decentralized system of government," where "provinces and territories hold considerable jurisdiction over energy policy and regulation."

Simon Dyer is deputy executive director of the Pembina Institute, and previously led the think tank's oilsands research. He says "a fair amount of antagonism across the country" is stifling needed cooperation.

"Our levels of government across Canada do not appear to be working together on this," he said in an interview. "I don't apportion the blame here on the federal government. They appear to be trying. There are 10 provinces in this country that have the regulatory power to reduce emissions, and most of them have not made a commitment to do their fair share."

Alberta is Canada's highest-polluting province, and home to the nation's oil and natural gas industry, making it central to discussions on energy transition. For decades, its governments have clashed with Ottawa over policies linked to its vast natural resources.

Newly re-elected Premier Danielle Smith has tapped into this long-standing tension, taking aim at perceived attacks on non-renewable energy, including plans to cap oil and gas sector emissions, and shepherd workers to other industries.

"Alberta has to be the biggest part of the solution," Dyer added. "The failure of Alberta to act is why the federal government is having to consider a national approach."

Cooperation 'needs to speed up'

Despite Smith's promise to protect her province from over-reaching federal policies "inflicted on Albertans," Mortlock sees the relationship moving in the right direction, albeit more slowly than is needed for Canada to hit net-zero by 2050.

"It needs to speed up," he said. "I think we're getting closer to the common ground, and an alignment. We need to keep pushing on it."

Dyer finds optimistic signs in Alberta's first-ever climate plan released last month. The document commits the province to net-zero emissions by 2050, without giving interim targets, like the federal plan.

"It made an aspirational commitment to net zero, which is the first time the Government of Alberta has ever made that statement. That's absolutely progress," Dyer said, adding the recent decision to bring Alberta's carbon pricing regime into compliance with minimum federal standards was "huge."

Alberta Minister of Environment Sonya Savage has said the province will also look at a lower cap on oilsands emissions, if the industry can show it's practical. Alberta is also aiming to cut methane emissions by 80 per cent, slightly more than the federal target.

"If the Alberta government is going to step up and say we absolutely commit to reducing oil and gas emissions, that's great," Dyer said.

"That can fit in as part of a national plan."

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

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