Alberta Election 2019 – Is it about Carbon or Oil?

The next provincial election is slated to May 2019 -just over 600 days from now. But with the unification of the Progressive Conservatives and Wildrose parties the election battle is already underway.

Today the New Democratic Party holds 55 seats and the new United Conservative Party (UC) 29. There is one Liberal and one Alberta Party MLA to round out the 2015- 2019 cast of characters. A switch of 14 seats from the NDs to the UCs will result is an change of government. While the UC leadership contest will further deploy their sniper positions and assault formations. But the battle front-lines are drawn and trench warfare is ramping up.

There are 5 or 6 defining issues that the election will turn on.  One of the most critical is the ‘Carbon – Energy Development’ battle.   

Is a low carbon economy folly or vital?  – Who will win the argument on the low carbon versus energy development policy paradigm?

What most voters have to believe for the UCPs to win (constituency by constituency) is:
      • It is a good idea to roll back the carbon tax and coal plants wind-down decisions and – the federal carbon tax is unconstitutional.

      • UCPs offers energy industry friendly policies that will increase investment and jobs. 

      • Subsidies for green power are a wrong approach.

      • The “social licence” the NDP promoted were irrelevant in achieving pipeline approvals.

      • NDP’s plan on carbon reduction is globally inconsequential and inhibit competitiveness.

What most voters have to believe for the NDP to win (constituency by constituency) is:
      • The carbon tax is efficient and inevitable (the feds will do it if Alberta doesn’t).

      • Prioritizing environmental outcomes and cross subsidizing green energy with a tax on CO2 emitting industries is globally and socially responsible (and not fatal to the Oilsands).

      • There will be “green” jobs to offset losses in the energy patch.

      • The “social licence” gained from carbon reduction policies were key to positive decisions for Line 3 and TransMountain.

      • Every jurisdiction must take responsibility to tackle climate change.

The Alberta Party and the Liberal Party will position themselves in the middle – that their policies are the best of both worlds.

The Alberta Advantage Party (Wildrose 2.0) will position itself against the climate change and carbon agenda.

10 forecasts that will affect battle field in 2019:                            

  1. Most forecasts see prices stabilizing and trending upward slightly. Stable prices will benefit the oilsands production. The government’s budget forecast is that a modest rise in production will be accompanied by a significant boost in price (WTI at $68 US in 2018).

  2. Natural gas prices and production are expected remain flat.

  3. Industry investment in oilsands and drilling activity investment will likely to be about half of what Alberta saw in the heyday of 2014.

  4. The shuttering of coal fired plants (end date 2030) continues as part of the NDP’s plan and the government will be on the hook for costs associated with this decision.

  5. The Carbon Tax increase will chug along – increasing per tonne of C02 emissions to price $30 form the $15 price in 2015. It will generate tax revenue of $5.4 billion that will be mostly redistributed as follows:

  1. Tax changes to big CO2 emitters could make some plants uneconomic.                                                                                                                        

  2. Enbridge’s Line 3 will be operational bringing an additional 360,000 barrels per day to the US.

  3. The fate of Keystone XL pipeline should be known.

  4. The political battle about TransMountain pipeline will resolved one way or another. Likely by the Supreme Court.

  5. The Energy East pipeline project will still be stuck in regulatory no man’s land as the federal government changes the ground rules for NEB and environmental approvals.