Redford interview: no plan for $40 carbon tax

The Alberta premier talks Keystone XL and her Capitol Hill visit

Fred Chartrand/CP

Alberta premier Alison Redford is in Washington, DC today to speak about her province’s energy resources and environmental policies as the Obama administration continues to review the proposed Keystone XL pipeline.

She is having meetings on Capitol Hill and gave a speech to the Brookings Institution, in which she made the case that if the cross-border pipeline is rejected, the winner will be Venezuela. Said Redford:

“The opponents of Keystone are, in effect, tilting the playing field in favor of  Venezuela, which would be the biggest beneficiary in the absence of Keystone. If it is not Canadian oil sands in those US refineries, it will be Venezuelan heavy oil. Yet Venezuela’s oil has the same carbon footprint, while Venezuela has little of the environmental policies and commitment that we do in Alberta. And importing oil from Venezuela does far less for the US economy and US jobs than Canadian imports.”

I asked her about reports that her government is planning to raise Alberta’s $15 per tonne carbon price to $40 per tonne as a means to getting American approval for the pipeline project — a price that environmental critics say would be still too low. Below are highlights of our conversation:

Q: Washington, DC is very polarized on the issue of oil sands and Keystone XL. So who is left for you to persuade here on your trip?

A: It’s funny. This is my fourth trip down here in the last 18 months. I was thinking about it on my way down yesterday that in some ways the conversation hasn’t changed. But this happens to be a point in time when people are very focused on this issue. So from our perspective, it’s not about a roster of people we are trying to convince. It’s to make sure that we are present in the discussion. So that as the dialogue changes and more people get engaged, we have more of an opportunity to talk about the issues related to the project.

This is an issue about Keystone but we never come to say, ‘We are proponents of Keystone and please approve the project.’ We come to say, ‘We know that in your considerations with respect to this project you are asking questions about Canada and Alberta – what does environmental sustainability look like? How do you balance environmental sustainability and economic development? What are the priorities for Canada and the U.S.?’ For me, part of that dialogue is to have thoughtful conversations with people so that they understand that we are thinking about the same issues, that our values as Canadians are not different than the values of people who are involved in these issues in the United States.

Q: What is the question you get asked most often?

A: I think that the approach that we’ve taken, which gets a very good response, is we don’t ever have people sit down and interrogate us. But what we say is we’re here to talk about what our environmental record has been in Canada. We have a commitment to ensuring that we are reducing greenhouse gas emissions; that we understand that climate change of course is real; and that there are different approaches to deal with this. You have to ensure that you are developing your energy resources in a sustainable way, you have to ensure you are investing in technology, ensure that your extraction is sustainable; that integrated land use management is important and we understand that you need to have a strong regulatory process with respect to water usage, land management, air quality; that communities matter, and that First Nations matter. We want to be able to talk about the fact we have an integrated approach and have had for well over a decade.

Q: It has been reported that you have a carbon tax plan – the 40/40 plan. Is that a part of your effort to get Keystone XL passed?

A: There are two separate pieces to this. One is that Keystone is a particular project and because people are making a decision around that project, they are looking to see what Canada and Alberta are doing around their environmental record, and so we come and talk about that. This story about 40/40 is sort of – how would I say it – it was reported as ‘news.’ It’s actually part of the work we just do on an ongoing basis with the federal government. This happens to be a point in time when Alberta and Ottawa are working intensely on what our new oil and gas regulations will look like with respect to emissions. So 40/40 isn’t a number that we’ve in any way landed on or proposed. I know that is the story out there. But that’s just a story. It’s very much around what are we doing to make sure we continue to be competitive – that we ensure that we are putting in place an integrated approach to economic development and energy.

This can never be a quid pro quo. This isn’t about saying [to the Obama administration], ‘If we were to make changes, please approve the deal.’ That’s not right. That’s not good public policy. In fact, we have never taken that approach with respect to the work that we do on environmental sustainability. So even though it’s been reported as a particular step or a point in time, nothing has dramatically has shifted. It really is just an evolution, an ongoing dialogue we have with the federal government and industry about what we can do to make sure we are still able to achieve our targets in a competitive way.

Q: So you are saying this did not come out of the effort to approve Keystone?

A: No.

Q: So what was the genesis?

A: There was not a genesis. We have a minister of environment and a minister of energy who meet with their federal counterparts to make sure we are putting in place policies and approach to environmental sustainability that make sense for Canada and Alberta. So it’s not as if there was a point in time that people sat down and said it’s time to make a decision to go in a different direction.

Q: What have you heard from the U.S. administration – how explicit or blunt or vague have they been in saying, “Look, we can’t approve this unless you do more on emissions?” Have you ever heard a message like that?

A: No. I haven’t had any either pointed or vague conversation with respect to these issues that is any different than if I’m sitting in Edmonton and talking to people at a coffee shop. This is what we talk about now, as citizens of the world.

Q: Is 40/40 a specific proposal or a jumping off point? Some environmentalists say you would need $100 per tonne, or $150 per tonne to really get the remissions reductions…

A: But that’s the point. This isn’t a specific proposal. This is part of an evolution with respect to what we do around policy. We’re not negotiating on specifics with environmental groups, we’re not negotiating with anyone. We’re not negotiating on this issue. We are simply developing a policy approach — because at the end of the day, that’s what matters. It has to be sustainable. It has to make sense for Canada’s economy. It has to make sense for Alberta.

Q: So the 40/40 thing is not a policy, it’s just an idea put out there for discussion.. So at the end of the day, it could not happen at all, or it could be a different number?

A: Yes.

Q: So you are collecting input into this?

A: Everyone is. If you were to sit down right now with industry in Alberta they would tell you they run numbers like this all the time. It’s not even related to environmental issues. It could be numbers with respect to this issue or with respect to pipeline capacity or how many rail cars they need to be able to contract to export product.

Q: Is it your expectation that at some point the carbon tax in Alberta will be raised from where it is now?

A: I don’t know. And it’s not a carbon tax, it’s a price on carbon – and that’s different. A carbon tax is when you tax emitters and use the money for whatever government may choose to do. We don’t do that. We have a price on carbon, of $15 per tonne, that goes into a technology fund that is then used to invest in projects that will allow for more sustainable development of the resource. It’s not a carbon tax, it’s a price on carbon. There is a difference.

Q: So do you expect to change that $15 – maybe not to $40, but to something else?

A: I don’t know.

Q: Is there some timeline at which these decisions are being made?

A: No.

Q: So it’s been reported as a new policy but really it’s just an internal conversation?

A: Think about what politicians do every single day, what governments do. We continually try to get ahead of public policy issues.

Q: So this is an internal policy discussion?

A: It’s not even internal. We are talking to industry they are talking to the federal government, and the federal government is talking to us. This is our job. This is what we do.

Q: So you don’t have a particular vision of where this might go?

A: No.

Q: Will you be discussing it here [in Washington, DC] while you are meeting with people?

A: What we’ve talked about is the fund we have in place. There are still a lot of people here who are surprised by the fact that we have legislation that has put a  price on carbon. The governor of Colorado was visiting two weeks ago and I had a chat with him, and he said he didn’t know we had a price on carbon. And it’s important for people to know that.

We’re not down here to pitch a project and say, ‘Boy, if you approve this project, we’ll do all these things.’ What we are here to do is say, ‘We want to tell you what we’ve done because we are proud of what our record has been.” The technology fund, carbon capture and storage, integrated land use planning, ensuring that land, air and water are developed in a sustainable way, an independent monitoring agency that provides real time data, a strong regulatory process. These are all things we’ve already done and we want to make sure people know that.

Q: Do you expect to be coming out with in the next months or a year new steps to get closer to meeting emissions targets?

A: Well, we’re very confident with respect to where we are going already. If there are innovative approaches that allow us to do more, that’s great.

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