Alberta’s recasting of MOU in light of Venezuela raises concerns

CALGARY — CHRIS SEVERSON-BAKER, executive director of the Pembina Institute, made the following statement in response to the January 8 letter sent by Premier of Alberta Danielle Smith to Prime Minister Mark Carney:

“Just over a month after the MOU was signed, Alberta has sought to recast the issues in light of the US’s recent actions in Venezuela. The letter includes speculative suggestions about the possible impact on global oil markets, trade flows, and Alberta’s oil industry – and therefore on the trajectory of the ongoing climate policy negotiations between Alberta and Ottawa.

“Alberta using this moment to lobby in public against what it is now calling an ‘overly aggressive’ industrial carbon price raises more questions about the outcome Alberta has in mind – especially given it already agreed in the MOU to strengthen its system. This is in addition to the regulatory changes Alberta pushed through in December – days after signing the MOU – that weakened its industrial carbon pricing system and effectively moved the goalposts on the negotiation before it had begun.

“Nobody can predict how events in Venezuela will play out over the next few years. If anything, the situation underscores the extent to which Canada is vulnerable to the whims of other nations, whose actions dictate global oil prices and, therefore, the competitiveness of Canadian oil exports. This highlights the level of risk involved in increasing our country’s economic reliance on revenues from oil and gas exports, especially with a global supply glut on the horizon and widespread projections of global demand stagnation within the next decade.

“Far from being a reason to further expedite a pipeline proposal and weaken Canadian climate policy, the Venezuela situation should give further pause for thought and reassessment about the best economic bet for Canada going forward.”

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