What is wrong with Alberta’s energy policy?

Alberta and its oil

Photo: Eli Pivnick

Oil sands facility along the Athabasca River in Alberta.

Alberta Premier Danielle Smith has claimed for years federal government policies under 10 years of Liberal government have hamstrung Alberta’s oil and gas industry, limiting investment and market access, and threatening jobs and economic growth.

Those claims have been echoed by federal Conservative Leader Pierre Poilievre, yet Alberta production since 2015, when the Liberals gained power, has increased by 42%, making Canada the fourth largest oil producer in the world. Alberta has also seen the second highest economic growth of Canadian provinces since the COVID recession. Moreover, when no private investor wanted to take on expanding the Trans Mountain pipeline, in spite of the oil industry’s insistence that it was essential for them, the Liberal government bought it and built the expansion.

Both Smith and Poilievre complain bitterly about Canada’s emissions cap, part of our international commitment to reducing greenhouse gas emissions. Oil and gas emissions represented 30% of Canada’s emissions in 2023 and growing.

Poilievre took aim at emissions regulations again last week, fresh off his byelection win. Meanwhile a spring 2025 poll by Abacus Data found 72% or Albertans want to maintain or increase federal climate action. (The reason that is surprising is our first-past-the-post electoral system obfuscates our understanding of voter intent.)

The attacks on moderate climate action and claims of grievance against the Liberals accelerated when Jason Kenney was Alberta’s premier from 2019 to 2022. Kenney was, as is Smith, a rabid defender of the oil and gas industry, ironically even at the expense of the Alberta taxpayer and the Alberta oil and gas industry.

In 2018, then NDP Alberta premier Rachel Notley made an agreement with rail companies to ship 120 000 barrels of oil per day by rail. Even though it would have benefited the oil companies, Kenney cancelled the agreement at a cost in penalties of $2 billion.

Notley also announced a $400 million fund to subsidize the building of a partial upgrader of oilsands bitumen (the tarry substance from the oilsands from which oil is refined). This would have rendered bitumen into a product that could flow in a pipeline eliminating the need to add a diluent and effectively increasing pipeline capacity 20% to 30%. That project was also cancelled by Kenney.

In the fall of 2020, even though then U.S. presidential candidate Joe Biden promised to kill the Keystone XL pipeline project if elected, Kenney invested $1.5 billion of taxpayers’ money in the project. Biden was elected, the project was killed, and Alberta taxpayers were out that money.

The faster expansion of oil and gas production touted by Smith and Poilievre makes little economic sense even when Alberta is not shooting itself in the economic foot, as Kenney did over and over. The June 2025 oil production forecast by the International Energy Agency moved peak oil demand back from 2030 to 2029 due to the rapid electrification by China. It’s no wonder China is working hard to electrify. It imported $257 billion worth in 2024. The IEA now forecasts an excess in global oil capacity of nine million barrels per day by 2030.

The IEA also forecast peak natural gas demand to occur in the mid 2030s and, after a brief plateau, to start shrinking. That is worrisome, not only for Alberta but also for B.C. The B.C. NDP government (of Premier David Eby) continues to have dreams of grandeur about LNG, which will likely either be shelved or will lead B.C. into economic, not to mention climate, chaos.

To add insult to injury in Alberta, similar to the case in (current U.S. President Donald) Trump’s America, Smith put in place a moratorium on renewable energy projects in August 2023. Since then, 11 gigawatts of renewable energy projects (the equivalent of 10 Site C dams) in Alberta have been cancelled. The irony is as electrical demand ramps up due to data centres and the electrification of transport, buildings and industry, more energy will be needed. Currently, the form that is quickest to build and cheapest is renewable energy.

Smith, along with Poilievre and the oil industry, have bullied Prime Minister Mark Carney into talking about more pipelines. Furthermore, the Alberta and federal governments have now committed $10 billion (and industry is pushing for another $40 billion of subsidies) to build a $75 billion carbon capture and storage project for the oilsands industry. The project is only projected to store one eighth of the greenhouse gas emissions from the oilsands.

To express it in fewer words, the Alberta and Canadian governments are committing to the expansion of an energy source (oilsands) which is destructive to the climate and unwanted, and are spending huge sums on a project—carbon capture and storage—which pretends to solve the emissions problem of oil, when cheaper, quicker and less polluting energy sources (solar, wind and batteries) are readily available in Alberta.

There is an “Alberta Advantage,” as the Alberta government says in its advertising, but what the Smith government is doing is not it.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.