{"id":59819,"date":"2023-05-26T17:20:11","date_gmt":"2023-05-27T00:20:11","guid":{"rendered":"https:\/\/energi.media\/?p=59819"},"modified":"2023-05-27T05:40:12","modified_gmt":"2023-05-27T12:40:12","slug":"ucp-is-the-worst-energy-government-in-albertas-history","status":"publish","type":"post","link":"https:\/\/energi.media\/markham-on-energy\/ucp-is-the-worst-energy-government-in-albertas-history\/","title":{"rendered":"UCP is the worst energy government in Alberta’s history"},"content":{"rendered":"

The UCP is the anti-Lougheed. It is the servant of the oil and gas industry. It will give industry everything it wants and more while neglecting Albertans’ interests<\/strong><\/h2>\n

As the global energy transition accelerates faster than expected, oil and gas jurisdictions like Alberta are grappling with how to respond. Danielle Smith\u2019s <\/span>Emissions Reduction and Energy Development Plan<\/span><\/a> (ERED) is one model: hydrocarbon extraction continues to expand, just with fewer greenhouse gas emissions, while clean energy plays a growing but minor role over time. Is the UCP strategy likely to be successful? Probably not.\u00a0<\/span><\/p>\n

Before considering the UCP\u2019s plan, let\u2019s spend a moment thinking about the energy transition. <\/span><\/p>\n

Looking at the energy transition through the Alberta lens<\/h3>\n

My primer explains the basic mechanics: <\/span>The Global Energy Transition Explained<\/span><\/a>.\u00a0<\/span><\/p>\n

A common idea in Alberta is that the transition isn\u2019t a transition at all, but a diversification of energy sources. Read my column, <\/span>Slow-walking the energy transition a mistake by Alberta oil patch<\/span><\/a>, for more detail. That is, clean energy like wind, solar, hydrogen, and geothermal will supply rapid growth in energy consumption, but not diminish oil and gas demand for decades.\u00a0<\/span><\/p>\n

This describes the current situation. As fast as solar expands, as quickly as transportation is electrified, fossil fuels continue to supply around 80 per cent of global primary energy, as they have for decades. Energy consumption in emerging markets, especially Asia but also Africa and Latin America, is simply growing too quickly for clean energy to capture a bigger share of primary energy for a long time.<\/span><\/p>\n

As I argued in this column, <\/span>Danielle Smith has an oil and gas marketing plan, not a climate plan<\/span><\/a>, the Premier and the industry view the energy transition and the climate crisis as a marketing opportunity (markets are already searching for ways to price oil and gas emissions-intensity) for Alberta hydrocarbons. This is especially true for natural gas, but also applies to crude oil as well.<\/span><\/p>\n

\u201cInstead of moving away from hydrocarbons, we will use these resources in innovative ways to ensure Alberta continues to provide the world with sustainably-produced energy and products,\u201d Premier Danielle Smith writes in her preface to ERED. \u201cOur approach to reducing emissions is based on reality, instead of unachievable targets set to random timelines.\u201d\u00a0<\/span><\/p>\n

Now, contrast Alberta\u2019s take on the energy transition with that of the International Energy Agency (IEA), which is often criticized for its stodgy forecasts about clean energy adoption. The agency frequently under-estimates the pace of technological change (it missed the now rapid adoption of solar by a wide margin, for example) and is known for its middle-of-the road analysis. Which is why Alberta should pay close attention to recent statements from Executive Director Fatih Birol.\u00a0<\/span><\/p>\n

\u201cEnergy markets and policies have changed as a result of Russia\u2019s invasion of Ukraine, not just for the time being, but for decades to come,\u201d he <\/span>writes<\/span><\/a>.\u00a0<\/span><\/p>\n

\u201cEven with today\u2019s policy settings, the energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system.\u201d<\/span><\/p>\n

Where Smith sees opportunity in Russian militarism as LNG demand rises to offset Europe\u2019s frantic race to replace 40 per cent of its natural gas imports, Birol sees a structural change in energy consumption that will quickly work against hydrocarbons. The \u201cRussian lesson\u201d is that importing nations are vulnerable to the political weaponization of energy. The best, and increasingly least cost, option to reduce vulnerability is to create energy at home. That means renewables, nuclear, energy efficiency, and other strategies designed to wean economies off fossil fuels.\u00a0<\/span><\/p>\n

The IEA\u2019s Stated Policies Scenario, its most conservative, sees global natural gas demand peaking by 2030 and oil demand levelling off by the mid-2030s. More climate policy-oriented scenarios speed up the peaks and declines of demand even faster. That was late 2022.<\/span><\/p>\n

In April, Birol <\/span>said<\/span><\/a> that markets were changing faster than expected and that \u201cour latest analysis shows that global demand for all road transport fuels \u2014 petrol, diesel and others combined \u2014 will peak by 2025 as a result of these ongoing trends.\u201d Road transport accounts for almost half of all oil consumption. Peak demand in this sector suggests that overall demand for oil will peak more quickly than 2030, the IEA\u2019s target just a few years ago.<\/span><\/p>\n

As Corey Cantor, transport analyst for BloombergNEF, explained in the interview below, electric vehicle sales are rising so rapidly that his team has to revise their forecasts several times each year. No wonder, because global automakers intend to spend $1.2 trillion by 2030 switching to manufacturing electric vehicles, according to a recent <\/span>story<\/span><\/a> from Reuters. I pointed out in this column, <\/span>Alberta\u2019s elite has a huge blind spot about oil\u2019s biggest competitor: electricity<\/span><\/a>, \u201cconsumers like you and me do not decide if cars will be powered by electricity or gasoline. That choice is up to automakers and the GMs of the world chose electricity. Almost all of them will ditch the internal combustion engine between 2030 and 2035.\u201d<\/span><\/p>\n