Alberta oil and gas companies are wasting so much natural gas each year that Albertans are losing out on up to $21 million a year in provincial natural gas royalties.

Oil and gas companies let an estimated $253 million worth of natural gas escape through undetected leaks and the practice of venting annually.

According to Progress Alberta, a progressive advocacy group, the lost royalties could pay for five new schools, 84 new playgrounds or 36 new nurses.

“This is a valuable resource that Albertans own and it’s money that should be going to things Albertans want and need that’s just being lost to the atmosphere forever,” said Duncan Kinney, executive director of Progress Alberta, in an interview with DeSmog Canada.

In addition to the lost royalties, the potent greenhouse house is leaked into the atmosphere without paying the province’s $30/tonne carbon levy, which results in a further loss of up to $1.4 billion in revenue, according to a new analysis by the Pembina Institute. When that carbon price increases to $50/tonne, as Premier Rachel Notley has indicated it will, those lost revenues rocket to $2.25 billion.

So why is this valuable resource disappearing into thin air?

ICYMI: Canada-U.S. Plan to Nearly Halve Methane Emissions Could Be Huge Deal for the Climate

Alberta underestimating methane leakage by 25 to 50 per cent

Reducing methane emissions from the oil and gas sector is considered to be one of the easiest ways to quickly reduce emissions. Methane has 34 times the “global warming potential” as carbon dioxide over a century.

And Alberta’s oil and sector emits a lot of it, with 31.4 megatonnes of methane entering the atmosphere in 2014 — although a recent study by Carleton University suggestedthe province is underestimating pollution by between 25 and 50 per cent, meaning annual emissions are more likely around the 45 megatonnes per year mark (which is about how much we thought all of Canada was emitting in 2016).

Fouty-five megatonnes a year is the greenhouse gas equivalent to 240,899 vehicles on the road.

Oil and gas companies have resisted changes that would require them to limit the leaking and venting of natural gas, arguing that it would result in job losses.

However, the federal government has committed to reducing methane emissions by 45 per cent below 2012 levels by 2025. Those reductions can be achieved through things like limiting the intentional “venting” of methane, using optical gas imaging cameras to detect unintentional leaks and installing flares to combust methane into carbon dioxide.

Federal draft regulations were released in May 2017, and proposed delaying full implementation of new rules by three years to 2023, instead of 2020. It was expected that Alberta would release its own version of regulations in November.

Industry  won a major concession from government in not having to pay any carbon tax on fuel used in the production of conventional oil and gas until 2023, including vented and flared gas.

The delay of action on reducing methane emissions ultimately impacts the entire country.

“What Alberta does will really make or break the ability to meet that [methane] target at the end of the day,” said Andrew Read, senior analyst with the Pembina Institute and report author.

Alberta oil and gas companies are wasting so much natural gas each year that Albertans are losing out on up to $21 million a year in provincial natural gas royalties. https://t.co/g0ExC0coTF

— DeSmog Canada (@DeSmogCanada) January 26, 2018

Improved leak detection and data collection critical

The federal government anticipates companies will need to spend $3.2 billion in between 2018 and 2035 to comply with the new regulations.

However, the government calculates the economic value of avoided climate change impacts will be more than $13 billion, with another $1.5 billion in conserved gas that can be sold by companies. That combines to a net benefit of $11.7 billion. In addition, a report by the Blue Green Alliance suggested methane regulations will create 1,500 jobs per year.

But for methane regulations to work, there  needs to be robust monitoring of leaked and vented methane.

ICYMI: Five Handy Facts About Alberta’s New Carbon Tax

“Having specific requirements for monitoring the leaks and trying to address them is also very important, so that we can actually tell if this is working,” said Brenda Heelan Powell, staff counsel at Alberta’s Environmental Law Centre, in an interview with DeSmog Canada.

Alberta could be ‘reducing class sizes, or hiring more nurses’ with lost revenue

It’s already taken a long time to get to this point.

The regulator-led Methane Reduction Oversight Committee was formed in September 2016 by the province and included representatives from industry and environmental organizations. But as reported by the Financial Post, talks broke down in the summer of 2017. Discussions with remaining stakeholders were set to conclude by last December.

We’re now less than two years away from when the federal regulations are proposed to start taking effect — and time is running out quickly to get industry ready.

These delays matter.

Environmental Defence estimates that pushing back the full implementation of regulations from 2020 to 2023 will result in an additional 55 megatonnes of methane being released.

That will have serious climate impacts. But it also deprives provincial coffers of potential royalty revenue, which is a pretty big deal for a province facing down a $10 billion deficit.

“We could be reducing class sizes, or hiring more nurses, or building more schools or playgrounds,” Kinney said. “These are things that people want and are demanding.  We’re in this self-imposed austerity in Alberta, and it’s somewhat unnecessary if we were just to follow through on these methane regulations.”

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Alberta companies, many involved in the oil and gas sector, contributed more than $2 million to Premier Brad Wall’s Saskatchewan Party between 2006 and 2015.

Collectively, out-of-province corporate donations make up one-quarter of all recent corporate donations.

“No-one really dug into why he was actually there,” Kinney says. “It was a fundraising trip. Brad Wall can come to Alberta, talk directly to the oil and gas community and raise millions of dollars.”

New figures released by the Petroleum Services Association of Canada anticipate Saskatchewan will drill more oil and gas wells in 2017 than any other province.

No Cap on Corporate and Union, Out-of-Province Donations in Saskatchewan

Saskatchewan’s campaign finance laws are regarded as some of the worst in Canada.

There isn’t any cap on contributions, or restrictions on corporate and union donations. In addition, out-of-province contributions — banned in Alberta in 1977 under Peter Lougheed — are sanctioned, as are out-of-country donations so long as the company has a Canadian presence of some kind.

“Obviously the fear is that corporations will use contributions to buy favourable policies or legislation, or at least buy access to these leaders,” says Simon Enoch, director of the Saskatchewan Office of the Canadian Centre for Policy Alternatives (CCPA).

The CCPA’s Saskatchewan office published a report in December 2012 that arrived at many of the same conclusions as the Progress Alberta findings: contributions overwhelmingly funnel to the Saskatchewan Party and most out-of-province corporation donations come from Alberta (between 2008 and 2010, contributions from Alberta accounted for 42 per cent of the party’s top donations).

”The oil industry looms large as key contributors to the Sask Party,” Enoch says.

Many Alberta-based oil and gas companies have significant investments in Saskatchewan oil plays, with potential interests in reducing obligations around environmental assessments and “playing” royalty regimes off each other to keep rates as low as possible.

‘We Can All Agree That They Expect Something In Return For These Really Large Cash Donations’

Enoch said the last time the province had a serious conversation about campaign finance reform was during Erin Weir’s run for leadership of the Saskatchewan NDP, which featured a policy proposal to ban all corporate and union donations.

A corporate lobbyist registry was launched in August, which is “pretty rudimentary and certainly not as good as some other provinces, but at least we have a picture of who’s meeting with the government and why.”

But there’s still no cap on donations, unlike in Alberta which sports limits of $15,000 in non-election years and $30,000 in election years. That means that in Saskatchewan politics, individuals, corporations and unions can donate as much as desired. Oddly enough, that’s resulted in sizable donations from Saskatchewan-based crown corporations, government agencies, municipalities, health regions and school boards.

Enoch’s quick to clarify that there’s no clear evidence of a “pay to play” relationship, but that we can “all agree that they expect something in return for these really large cash donations that they’re making.”

Wall Says He Has No Interest in Changing Election Finance Laws

That’s where a ban on corporate and union donations could come in. The very first bill the Alberta NDP passed, introduced in June 2015, implemented such a measure, although there were concerns of loopholes that allowed for corporations and unions to provide loan guarantees and donate the paid time of employees to ‘volunteer’ for political parties.

However, Wall told CBC News he has no interest in changing campaign financing laws. NDP interim leader Trent Wotherspoon has indicated that his party wants to see a ban on corporate and union donations.

A similar situation has taken shape in B.C. where the ruling BC Liberals have refused to update the province’s scant political donation laws. Both the B.C. Green Party and the provincial NDP have promised to overturn or review B.C.’s campaign finance laws if elected in the spring 2017 race.

“I think there’s an opportunity for opposition politicians as well as the general public in Saskatchewan to rise up and say that this is unacceptable and unneeded and that people in Saskatchewan should be the only ones who can donate to Saskatchewan politics,” Kinney concludes.

Image: Saskatchewan Premier Brad Wall. Photo: Canada 2020 via Flickr CC BY-NC-ND 2.0

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Albertans are more politically progressive than assumed, according to findings collected by Ottawa’s Abacus Data and published in a recent report titled “The Quiet Majority.”

Commissioned by Progress Alberta — a brand new left-leaning, non-partisan organization based in Edmonton — the poll discovered that 59 per cent of Albertans self-describe as “progressive” and tend to vastly overestimate the percentage of other Albertans who self-describe as conservatives.

“We had a hunch that Albertans were a little more progressive than the perception out there, but the results were pretty incredible, to be frank,” says Duncan Kinney, founder of Progress Alberta. “Really, what surprised me the most was just how much Albertans overestimate how conservative other Albertans are.”

To be fair, the definition of “progressive” seems fairly nebulous: some 72 per cent of people who voted for the Alberta NDP in May harnessed the label to describe their political affiliations, but 47 per cent of those who backed the far-right Wildrose Party also used it.

In addition, while a combined 57 per cent of people polled had a “positive” or “neutral” impression of Premier Rachel Notley, some 38 per cent of people had a “negative” impression of her, making her by far the most negatively perceived politician in Alberta (the second-most disliked politician was moustached leader of the Progressive Conservatives, Ric McIver, who attracted “negative” impressions 19 per cent of the time).

The polling data, collected from 1,000 Albertans in an online survey between December 2 and 7, featured a margin of error of +/- 3.1 per cent at 19 times out of 20.

Policies introduced by Notley’s NDP win favour

One area where public opinion appears more uniform concerns how Albertans view NDP policies introduced since May.

By far the most popular bill seems to be the very first introduced by the NDP, which banned corporate and union donations to political parties —although it still allows such entities to guarantee loans and pay employees to work campaigns. Seventy-two per cent of Albertans surveyed stated they “support” or “strongly support” this legislation.

Another bill — Bill 2, an Act to Restore Fairness to Public Revenue — which introduced five new tax brackets for Alberta’s wealthiest and abolished the province’s ‘flat tax’ also received strong approval from survey respondents.

Perhaps most surprising is the support for the province’s new climate change plan exhibited by Albertan who were polled, particularly given that a Mainstreet Research survey conducted on December 3 (which featured a margin of error of +/- 1.8 per cent at 19 times out of 20) concluded that 68 per cent of Albertans oppose the plan.

In Abacus’ recent poll, it was found that 48 per cent of Albertans support the phase-out of coal-powered electricity by 2030 (with 36 per cent opposing), 47 per cent support a carbon tax (with 41 per cent in opposition) and 47 per cent for the cap on oilsands emissions (with 37 per cent against it).

Such data could serve as a strong counter to arguments by conservatives like the University of Calgary’s Barry Cooper, who argued in a rambling column for the Calgary Herald that Alberta’s carbon tax “was unmentioned in the NDP election platform and is opposed by two out of three Albertans.”

Notably absent from the survey, however, was a question about Bill 6, the very contentious legislation that mandates OHS and WCB coverage for farm workers.

Kinney suggests such findings relate to the demographic changes that Alberta has undergone in recent years: “We are younger, we are more urban, we are more educated,” he said.

“Those are all traits that correlate with identifying as progressive, according to our poll.”

Kinney added that these progressive trends are also identifiable on the federal political landscape in Alberta.

“We went from one non-Conservative MP in this province to five,” he said. “When you look at ridings in Alberta that had a majority of non-Conservative voters, we went from three in the last election to 12 in this election.”

Carrying the progressive momentum forward

Some ostensibly conservative elephants in the room weren’t addressed in the poll.

Alberta is the only province in Canada without a sales tax, making the public purse much more vulnerable to volatility associated with global commodity prices.

David Stewart, political science professor at the University of Calgary, has previously estimated that a provincial sales tax (PST) that matches the “level of the next lowest province” — Saskatchewan, featuring a five per cent tax — would draw in $11.6 billion in revenue.

That amount has the potential to erase the debt and allow for investments in sectors like clean energy, affordable housing and public transit.

The NDP has announced it will not introduce a PST. In addition, the party has said it doesn’t intend to bring in rent control, which would prevent landlords from gouging tenants. Alberta is the sole province in Canada without such a policy.

But Kinney emphasizes that political change takes time, noting the progressive takeover of the legislature in May represented the apex of a decade’s worth of momentum.

As people acclimatize to the NDP and Alberta’s right-wing continues to implode, it seems reasonable to assume that momentum could continue: “It’s important to create the space for people to talk about it,” Kinney said.

“This type of report really shows that your neighbours aren’t as conservative as you think, your coworkers aren’t as conservative as you think, your relatives aren’t as conservative as you think.”

“If this helps an awkward dinner conversation with some relatives, then all the better.”

Correction: An earlier version of this article incorrectly stated Progress Alberta is affiliated with the Broadbent Institute.

Image: Dan Voaklander

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