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A firefighter conducts a controlled ignition on the Sturgeon Lake Wildfire Complex GCX001 near Valleyview, Alberta.
Alberta wildfires send smoke far and wide – and south
Canada’s wildfire season is already in full swing, with a series of intense blazes in Alberta that have sent toxic smoke across the country and into the US Midwest. A wet and cold weekend followed by cooler temperatures this week helped firefighters from Canada and the US battle the 100+ fires, but dozens of blazes remain out of control. Fires are also burning in the provinces of British Columbia, Saskatchewan, and Manitoba, where thousands have been forced to evacuate. And it’s only May – wildfire season goes through September.
Last week, the fires jammed up natural gas exports from Canada to the US, leading to price hikes, and the blazes have also led to reduced oil and gas production. Earlier this month, wildfires shut down oil and gas production in Alberta, reportedly curtailing at least 145,000 barrels of oil per day. A new study links the growth in extreme wildfires to the oil and gas industry as well as cement makers – in case irony is your thing.
Meanwhile, Alberta is in the midst of an acrimonious and tight provincial election in which discussions of climate change are constrained by the province’s reliance on the oil and gas industry – even for the ostensibly left-wing New Democratic Party. Politicians are unwilling to take aim at the province’s main source of wealth. There’s a push in Canada to set an emissions cap and get oil and gas companies to net-zero emissions, but Corporate Knights reports that the industry is lobbying against necessary steps to get there while claiming to support it. Meanwhile, a recent report by the Public Policy Forum claims a full phase-out of oil and gas production by 2050 would cost the province CAD$60 billion. A full wind-down of the industry is not on the table.
Ending the oil and gas industry (which no one is proposing) would be extraordinarily costly, but wildfires in western Canada are expensive themselves – the 2016 fires alone cost CAD$9 billion. They are costing the province plenty in terms of health, domestic and international trade, and destruction, yet politicians shy away from the issue. A federal report cites a series of measures required, and in various stages of adoption, to tackle present and future wildfires, including more money, training more firefighters, purchasing more equipment, and developing a satellite system to track wildfires. Without a significant effort and more aggressive climate action, these blazes will only get worse in the coming years – and their smoke and destruction have no respect for national borders.Alberta Premier Danielle Smith speaks during the Canada Strong and Free Networking Conference in Ottawa, Canada.
Two battles at once in Alberta, the home of key US energy exports
Alberta is in the middle of a tight election, the first for United Conservative Party Premier Danielle Smith. She won the party’s leadership after former Premier Jason Kenney resigned last May following his poor showing in a leadership review vote. This election is really a battle pitting Smith’s UPC against the left-wing New Democratic Party and former Alberta Premier Rachel Notley. But suddenly, a third player has emerged, and it could prove decisive.
Take Back Alberta, an ultra-conservative third-party organization, is reportedly working to get Smith to lean in harder to her already libertarian beliefs and to push the UCP father to the right – and away from its more centrist policies. The trick? Take Back Alberta must stay within the lines of third-party election rules. Indeed, they claim to actually control the UCP and the premier’s office! The battle is an extension of the struggle that led to Kenney losing the leadership after he too could not control or corral the more libertarian sides of his party.
Why does this matter to US-Canada relations? Canada is the largest source of US energy imports, with much of that coming from Alberta. In 2020, the oil-rich province exported CAD$77.5 billion in goods to the US, its primary global trading partner. So who runs the province is material to the energy sector.
Smith – who is being hounded this week after an old recording surfaced in which she compared those who got the COVID-19 vaccine to followers of Hitler (Yes, Hitler has become part of the election campaign) – supports loose energy regulations and says federal climate policies are an “existential” threat to the province.
Smith has also said US Republicans, including Florida Governor Ron DeSantis, are models for creating “little bastions of freedom.” If Smith wins, and with her party controlled by the Take Back Alberta crowd, the province will see more open hostility toward the federal government’s climate and natural resources policies, creating volatility that might give energy investors pause. It could also lead to more legal fights over provincial-federal powers and create confusion on what rules will apply and when. After all, investors just love instability, don’t they?Alberta Premier Danielle Smith speaks at the Calgary Chamber of Commerce.
Alberta heads to the polls
Oil executives will be keeping an eye on the too-close-to-call Alberta election campaign that kicked off this week. The race pits incumbent Danielle Smith, a fiery libertarian, against former Premier Rachel Notley, leader of the leftist New Democrats.
A Smith government would be expected to continue backing the oil industry and picking fights with Trudeau, while Notley would be more likely to lean into reducing emissions. The polls are razor close, with the result hinging on Calgary, capital of the oil patch in the petroleum-rich province.
Oil watchers want to know if the election will change Canada’s federal carbon price law, and the answer is simple: no. Alberta has tried to challenge the federal government’s jurisdiction to impose a carbon tax in court and lost. So, whoever wins, the folks in Alberta are still gonna pay the Canadian price on carbon.