Liberals walk climate tightrope in dispute over Teck Resources project

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Sometimes winning is simply not losing really badly. For the federal Liberals, not adding fuel to the political fires now burning is likely the best they can hope for as the deadline for a decision on a massive oil sands mine in northern Alberta approaches.

The party campaigned on action on climate change in the fall election, and can easily point to that mandate as driving a decision on the proposed Frontier mine. The environment is top-of-mind in vote-rich Quebec. Some Liberal MPs have been open about their opposition to the Teck Resources project.

But in Alberta, where no Liberal MPs were elected, where only a minority feel they are well-represented by Ottawa, and where concern about jobs and future investment outrank all other issues – people are looking for a sign that thoughts and prayers for the province’s economic well-being will morph into something concrete. And no matter how much some Canadians don’t want to think of their country as a significant player in a global oil industry, Premier Jason Kenney is right that the economic contributions of the sector are often understated and undervalued.

To walk this fine balance, the federal Liberals are likely to attach significant conditions if they approve the Teck project by month’s end.

It will be an inelegant political solution to a difficult problem. It will lead to fair criticism from Alberta and others worried about Canada’s reputation amongst international investors that Ottawa is changing the rules on major project approvals in the middle of the game.

But if you listen carefully to federal messaging, that’s where the horse-trading is headed.

Citing senior government sources, CBC reported any approval would have Alberta commit to net-zero emissions, for the province as a whole, by 2050. This week, federal Environment Minister Jonathan Wilkinson told The Globe and Mail the federal government wants the province to get serious about enforcing its pledge on a 100-megatonne emissions cap on the oil sands (but noted that was a pre-existing commitment and stands separate from Ottawa’s decision on the Teck project).

Also this week at the Globe conference – a sustainable business summit in Vancouver – Mr. Wilkinson noted that “future projects must have the lowest greenhouse gas emissions per unit of production, develop a path to net zero and have the lowest impact possible on biodiversity.”

And when federal Finance Minister Bill Morneau stepped carefully into Calgary this week, he said cabinet has yet to make a decision but the project had gone through “rigorous process.”

That process was a joint federal-Alberta review panel, which gave a tepid thumbs-up to the project in its report last July. The report said the major environmental concerns about the project are outweighed by the significant economic benefits. The review panel concluded the Frontier project will create 7,000 construction jobs and 2,500 permanent ones, as well as contribute $70-billion over its lifetime to government coffers.

The mine has been under review for a decade. Proponents of the project have pointed to the fact that 14 nearby First Nation and Métis communities have signed agreements with Teck. Last year, energy companies including Teck returned oil sands leases to the Alberta government for the creation of Kitaskino Nuwenëné Wildland Provincial Park, an area that will add to the buffering around Wood Buffalo National Park.

But it is becoming increasingly clear in the debate over Teck in recent weeks that some expectations have increased – even since last summer.

The Liberals won a minority government in October while campaigning with the pledge of getting the country to net-zero emissions by 2050. Some oil and gas companies in the emissions-heavy oil sands business, including Cenovus, CNRL and MEG Energy, have made similar commitments. Teck itself has said it will be carbon neutral across its operations in 30 years.

There are also increased concerns about the tens of billions of dollars that will be needed to clear up Alberta’s oil sector, including oil sands tailings ponds. An international oil and gas divestment movement has gathered steam. Athabasca Chipewyan First Nation Chief Allan Adam – whose reserve lands are located 16 kilometres from the mine site – supports the project, but has written to Ottawa to say that Alberta’s United Conservative government has done little to accommodate community concerns over environmental monitoring and wildlife conservation (the province’s Environment Minister Jason Nixon says it’s a “money” argument). It’s still unclear whether blockades that disrupted the movement of goods and people across Canada this week will make Canadians more sympathetic to Indigenous opposition to resource development and issues of reconciliation, or simply more frustrated with the associated hit to the economy.

Alberta officials say Ottawa hasn’t communicated any conditions the province would have to fulfill for approval of the Teck mine. However, Mr. Kenney has indicated there’s some wiggle room in his position. In a letter imploring the federal government to approve the project, the Alberta premier noted his province is already taking action on climate change, and added, “We stand ready to work with the federal government to do more.”

If Ottawa approves the mine, it needs to be able to point to a win on the environmental front. Just as the Liberals promised revenues from the Trans Mountain expansion will go to clean energy projects, any “yes” for Teck will need similar framing.

Overshadowing the political machinations is the fact Teck itself hasn’t yet committed to shovels in the ground. Oil sands projects are expensive. The $20.6-billion price tag could easily make it cost-prohibitive. The world has more oil supplies than when the project was first envisioned, crude prices are lower, and getting product transported out of pipeline-constrained Western Canada is always a question.

If the project gets the go-ahead, attention will shift to the company decision. But even then, the political fight between Alberta and Ottawa will continue – as Teck’s call will be informed by whatever conditions Ottawa sets in place.