“…in Alberta we believe that markets are the best way to set prices.” – Rachel Notley, December 2
A week in and the consensus seems to be that Rachel Notley made the right decision to cut back Alberta oil production by 325,000 b/d. What about her other energy policies? Or her handling of controversial energy issues, like pipelines? Experts give the Premier high marks as an oil and gas policymaker and manager, a fact not well appreciated by Albertans.
Calgary-based pollster Janet Brown says that voters like the NDP leader, but they’re very anxious about the economy and lack faith in Notley’s team to do a good job getting the province back on track.
“People have very positive impressions of the Premier. People do think that she is quite competent and she is doing a good job,” Brown said in an interview.
“People don’t have nearly as much faith in the team around her and her caucus. So, I think that is one of the things that Rachel Notley is suffering from.”
Dr. Allan Fogwill is an economist and head of the non-partisan, Calgary-based Canadian Energy Research Institute. He says energy is a tough file for politicians to manage because widely divergent stakeholder views mean consensus is impossible.
“So, what’s the most reasonable approach that you can take which tries to address everyone’s views but keeps us moving forward?” asks Fogwill. “I think, to the extent possible, the policies that have been adopted by the Alberta government have been reasonable.”
He says the Notley government has done a good job balancing support for the oil and gas industry and competing issues, like beefing up environmental protection and ensuring the public treasury gets its fair share from royalties.
“There were concerns by some parts of the population that the royalties were not high enough. The government went forward with a very inclusive stakeholder consultation process [during the review in 2015], then struck a resonable balance,” he told Energi News.
“They didn’t really change the royalty structure to any great extent. They streamlined it and made it easier to manage, but given the economic challenges of the industry they didn’t really change the quantum of royalties that they were going to collect.”
Dave Collyer is a long-time Shell Canada executive who was CEO of the Canadian Association of Petroleum Producers from 2008 to 2014 and served as co-chair of the Oil Sands Advisory Group.
He gives the Notley government “high marks” for its work on the oil and gas royalty review, climate policy as it affects energy, and says “she has been a strong advocate for pipelines and market access.”
“I think has taken some sound decisions in Alberta’s interest. So, I think when you sum it all up, as a relates to the energy file, she has been very solid,” he said in an interview.
Prof. Kent Fellows is an energy economist with the University of Calgary. Notley’s commitment to extensive consultations with stakeholders and the public has been a distinguishing feature of her government, he argues.
“I think the NDP has been good at offloading the workload to the regulator whenever possible and then engaging in consultation so that they try to avoid unintended consequences of these policies,” he told Energi News in an interview.
“A lot of this stuff ends up being fairly technocratic. I’m not convinced that the policies would be a whole lot different if we had a different government in place.”
Some of the criticism levelled at Notley’s handling of the energy file can be ascribed to partisan politics, says Ed Whittingham, former CEO of the Pembina Institute and one of the environmental group executive directors involved in the climate policy discussions with oil sands CEOs.
“Many in corporate Calgary, though not all, voted for the other team in the last election,” he said in an interview. “I think those criticisms come with a certain political bias.”
Oil and gas industry leaders were nervous after the 2015 election of a government that was perceived to be “activist.”
“If you were worried about an activist government coming in and not resting on its [electoral] laurels, then during the first six months you had lots of reasons to be suspicious. I think their moves since then have proved to be good ones,” he says.
“I am still a supporter of the Climate Leadership Plan and I think it will ultimately lead to a pipeline being built. We just have to go through some more process.”
Gil McGowan, president of the Alberta Federation of Labour and co-chair of the Energy Diversification Advisory Committee, argues that Notley’s response to the oil price crisis takes a page out of the playbook of former Premier Peter Lougheed.
“If you put all those four pieces together – the continued push for pipeline expansion, plans for more upgrading and refining, a medium-term solution in the purchase of rail cars, and the temporary oil production cuts – it’s clear that this is a premier who really has a good understanding of the problems that are currently besetting our industry,” he said in an interview.
“It’s clear that she has a more robust vision for managing our energy resources in the public interest.”
Another issue where Notley has done a good job balancing policy objectives, according to Fogwill, is greenhouse gas emissions and economic development.
“In particular, I point to the output based allocation process that they went through with industry and other stakeholders to really design the benchmarks, not looking at it from a purely theoretical point of view, but what was actually happening in various industrial sectors,” he said.
“It was such a well-thought-out strategy that the federal government has adopted it as part of their carbon pricing mechanism.”
No government is perfect, including Notley’s.
For instance, Collyer points out that while the oil and gas carbon pricing policy – known as the Carbon Competitiveness Incentives Regulation – is well designed, there have been implementation issues that concern industry.
And some issues – such as reforming the Alberta Energy Regulator to improve efficiency for producers or tackling the oil and gas liabilities problem (think oil sands tailings ponds and orphan wells) – still are not properly addressed.
But that’s the nature of government. There is never a shortage of issues to resolve and challenges to tackle.
On balance, considering the sources interviewed for this column and the hundreds interviews conducted by Energi News for news stories and columns over the past three and a half years, the consensus is that Rachel Notley is an able policymaker and has managed energy issues well despite being dealt a tough hand that included two years of rock bottom oil prices, an economic recession, and less than ideal handling of the pipeline file by Ottawa.