+ RMA Rural Municipalities
of Alberta

Resolution 1-19S

Municipal Support for the Energy Industry

Date:
March 20, 2019
Expiry Date:
April 1, 2022
Active Status:
Active
Sponsors:
Strathcona County
Year:
2019
Convention:
Spring
Category:
Energy
Status:
Accepted in Principle
Vote Results:
Carried
Preamble:

WHEREAS in 2017, Canada lost more than $50 billion in investments through the cancellation of two nation-building energy projects, the TransCanada Energy East Pipeline and the Pacific Northwest LNG Project, that represented significant opportunities in capital investment, jobs, tax revenue, and economic growth;

WHEREAS the Canadian Association of Petroleum Producers estimates the impact of the Western Canadian Select-Brent Crude (WCS-Brent) price differential to be at least $13 billion since 2016 and as high as $50 million per day in October 2018, resulting in $7.2 billion in lost revenue to the Government of Alberta and $800 million in income taxes to the Government of Canada;

WHEREAS the price differential is at least in part due to the lack of pipeline capacity to transport energy products derived from Alberta to international markets;

WHEREAS any reduction in the price of Alberta oil in comparison to the price of Brent has significant impacts on provincial and federal revenue, as well as energy industry investment;

WHEREAS many Albertan families and businesses are suffering in lost jobs, income, and property values due in part to the lack of market access for Alberta oil; and

WHEREAS Canada’s and Alberta’s energy industries lead the world in environmental responsibility, and human rights and labour standards;

Operative Clause:

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta advocate for the Government of Alberta to further develop and implement a targeted, national education and marketing campaign on behalf of Albertans in order to offset foreign protectionism and de-marketing campaigns, regulatory delays, and the combined infrastructure and economic factors that are creating a significant, negative effect on Canada’s local, provincial, and national economies. The elements of the education and marketing campaign include as outlined in “Schedule A”;

FURTHER BE IT RESOLVED that the Government of Alberta provide resources to offset the combined negative impacts affecting the energy industry through:

  1. the continuation of the Petrochemicals Diversification Program;
  2. key energy industry-supporting infrastructure development; and
  3. a continued strong presence and advocacy with federal, municipal and foreign governments.
Member Background:

Schedule A

The elements of the properly resourced evidence-based education and marketing initiative include:

  1. promote the world leading environmental, human-rights, and labour standards of the Alberta energy industry and its importance as an economic backbone of the country for jobs and supporting social programs;
  2. highlight our energy industry as one of one of innovation, economic opportunity, and environmental sustainability;
  3. educate the Canadian public on foreign de-marketing campaigns targeted at the Alberta and Canadian energy industry;
  4. educate the public on the reality that wind, solar and alternative sources of energy are only able to provide 1.1% of the world’s energy needs;
  5. educate the Canadian public on the unethical and hypocritical aspects of the energy de-marketing campaigns; and
  6. educate the Canadian public on the benefits of the Alberta energy industry beyond traditional uses such as transportation, but as underlying element in over 6000 products from life-saving drugs, to computer components, to supporting alternative sources of energy.

Additional member background:

The importance of the energy industry to Canada and Alberta are obvious, as is the impact to the local, provincial, and federal economies when changes occur in the energy industry:

  • every annual average $1 increase in the Western Canadian Select – West Texas Intermediate differential above US $22.40 per barrel costs the Government of Alberta $210 million in royalties;
  • for every US $1 per barrel of oil discounted relative to world prices, there is an opportunity cost to the Canadian energy industry of $1.4 billion per year;
  • for every CAD $1 million invested and generated in the Canadian energy sector, the Canadian GDP impact is CAD $1.2 million; and
  • for every direct job created in the Canadian energy sector, two indirect and three induced jobs in other sectors are created in Canada on average;

Given these numbers, the need for the governments of Canada and Alberta to support a strong and vibrant energy sector is clear.

However, a campaign has been evolving over the last decade with the strategy to land-lock the oil sands and prevent it from reaching the international market where it could fetch a high price per barrel. The US-funded campaign has allegedly given tens of millions to anti-pipeline Canadian green and social justice groups, including Greenpeace Canada, Idle No More, and the Pembina Institute, essentially campaigning to rebrand the Alberta oil sands as “dirty oil”. Most recently, references to “dirty oil” were articulated on December 7, 2017 by Quebec’s Premier Legault who talked about “dirty energy” in reference to the oil sands and on December 23, a CBS affiliate in San Francisco reported that tankers may soon be transporting “the heaviest, dirtiest oil on the planet, tar sands crude from Alberta, Canada.”

On October 12, 2018, the Northern Alberta Mayors and Reeves Caucus hosted a presentation by a Canadian researcher. The presentation summarized concerns about foreign interests funding environmental work in Canada with the intent to block development in the Canadian energy sector in order to protect foreign investments and market share. Further concerns included foreign charities providing inaccurate and misleading information on the Canadian energy sector via public relations campaigns.

While cross-border market competition and public relations marketing campaigns are an unavoidable reality in the energy sector, it is Strathcona County’s perspective that the best remedy for strong market competition and inaccurate public relations messaging affecting the Canadian energy sector is strong support and investment by the federal, provincial, and local governments. Comprehensive and relevant messaging by these important entities contributes to a more balanced public conversation in the marketplace and in political decision-making circles about the current and future impacts, disadvantages, and opportunities in Canada’s energy industry.

On December 2, 2018, the Government of Alberta mandated a short-term reduction in oil production to defend Alberta jobs and the value of energy resources. Starting in January 2019, production of raw crude oil and bitumen will be reduced by 325,000 barrels per day to address the storage glut, representing an 8.7 per cent reduction. The Alberta Energy Regulator will review the reduction amount every month to make sure production is in balance with transportation and storage capacity.

RMA Background:

R1-17F: Support for Trans Mountain Expansion Project

THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties (AAMDC) urge the Government of Alberta to continue to support the Trans Mountain Expansion Project so it can meet its commitments to delivering jobs and economic benefits and meeting its regulatory requirements during the construction and operation of the pipeline;

FURTHER BE IT RESOLVED that the AAMDC urge the Government of Canada to ensure that all regulatory processes that have been recommended for approval by the NEB and subsequently authorized by the Federal Governor in Council are permitted to proceed;

FURTHER BE IT RESOLVED that the AAMDC urge the Government of Canada to exercise ancillary powers in order to enact the comprehensive regulatory scheme for the Canadian public interest, including the right to timely permitting, thereby enabling the commencement of construction.

DEVELOPMENTS: The Government of Alberta has been a strong supporter of the Trans Mountain Expansion Project, and has worked to ensure Alberta’s natural resources meet tidewater. Based on both the Government of Alberta’s response to this resolution and recent comments from the Premier of Alberta and other provincial ministers, RMA is satisfied that the Government of Alberta is sufficiently supportive of this project.

The National Energy Board (NEB) response indicates that because the matters referenced in the resolution are currently before the NEB for decision, the NEB is unable to provide comment. Additionally, RMA has not yet received a response to this resolution from Natural Resources Canada.

The National Energy Board (NEB) response indicates that because the matters referenced in the resolution are currently before the NEB for decision, the NEB is unable to provide comment.

Additionally, RMA is awaiting a response from Natural Resources Canada.

Given that the Government of Alberta’s support of the Trans Mountain Expansion Project meets the intent of the first operative clause of the resolution, this resolution is assigned a status of Accepted in Part, and RMA will continue to advocate on this issue at the federal level.

ER2-16S: Support for the Energy East Pipeline Project

THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties demonstrate their support for the Energy East pipeline and inform the National Energy Board of this support;

FURTHER BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties collaborate with the Government of Alberta and other municipal associations to emphasize the local, provincial, and national benefits that the Energy East pipeline would provide.

DEVELOPMENTS: RMA and the Government of Alberta supported the Energy East Pipeline through various channels. For example, the RMA brought this issue to the attention of municipal counterparts in other provinces as well as the Federation of Canadian Municipalities. The Government of Alberta has also been an advocate of greater market access. In October 2017, TransCanada Corporation announced it would no longer be proceeding with its proposed Energy East Pipeline. Although the Energy East Pipeline is not proceeding forward, the RMA has fulfilled the intent of this resolution and will continue to advocate for greater market access for Alberta’s resources. This resolution is assigned the status of Accepted.

Government Response:

Alberta Energy

Our government will create an energy war room as part of a larger strategy that includes a public inquiry into foreign-funded meddling in our economy and politics. The war room will combat misinformation about Alberta’s energy. Recognizing the world needs more energy produced by jurisdictions with responsible energy development, reclamation, and environmental standards to fuel the demands of the world’s growing economy, the energy war room will re-assert Alberta as a leader in this field. In addition, our government will challenge the charitable status of foundations that are funneling foreign money into anti-Alberta campaigns. This will include ending provincial government funding for groups involved in the so-called “Tar Sands Campaign.” We will launch a public inquiry into the foreign sources of funding into the anti-Alberta energy campaign, and ban foreign money from interfering in Alberta politics. As part of this initiative, we will ask the energy industry to significantly increase its own advocacy efforts.

We are continuing the Petrochemicals Diversification Program (PDP). All approved PDP agreements will be honoured. We are placing a strong focus on exploring options to revitalize Alberta’s natural gas and related industries, including ways to support the diversification of our petrochemicals sector. Premier Kenney appointed the Honourable Dale Nally as the Associate Minister of Natural Gas to work with industry and government stakeholders, including rural municipalities.

Under the PDP, two projects were approved to receive royalty credits. Both projects will process propane into polypropylene plastic. Inter Pipeline was approved to receive up to $200 million in royalty credits for its proposed propane dehydrogenation facility, which is part of the company’s Heartland Petrochemical Complex. This project is under construction. The Canada Kuwait Petrochemical Corporation, a joint venture between Pembina Pipeline Corporation and the Petrochemical Industries Company K.S.C. of Kuwait, was approved to receive up to $300 million in royalty credits for its integrated propane dehydrogenation and polypropylene petrochemical complex.

In addition, we have launched a multi-media campaign to urge the federal government to say yes to the Trans Mountain pipeline expansion project. The government also launched a campaign in Vancouver to ensure British Columbians know the benefits of this pipeline. The campaign is a key tool in telling Canadians and the federal government about the impact of Alberta’s energy industry on the country.

The government will use other tools at our disposal to defend the energy sector and interests of Albertans, including legal challenges, inquiries, and media campaigns. We recently challenged leading international publications to print facts about the industry.

Alberta Economic Development, Trade and Tourism

Resolution 1-19S aligns well with our plan to get our energy sector creating jobs again. Energy diversification programs have been one of the avenues used to attract major private capital investment to Alberta. This government will honour the agreements made by the previous government under the PDP.

The Government of Alberta can acknowledge its role to advance and promote the overall Canadian energy industry landscape. Specifically, Government of Alberta ministries like Alberta Economic Development, Trade and Tourism and Alberta Energy work continually with stakeholders, such as the Alberta Industrial Heartland Association and Western Diversification Canada, to name just a few, on energy-related initiatives.

The Government of Alberta is placing a strong focus on accelerating the revitalization of Alberta’s natural gas and related industries, including support of our petrochemicals sector. Through the leadership of the Associate Minister of Natural Gas, the government will develop an integrated approach to our natural gas resources. This includes a campaign in support of Alberta’s energy industry; we know it is vital to communicate economic growth and national unity.

This government recognizes competitive tax rates, private property rights, and sensible regulation create growth and jobs. We aim to increase regulatory efficiency and support decisions that will make the downstream sector grow and be competitive with other jurisdictions. This government will be focused on standing up for our 151,000 energy workers that need their voices heard. We will promote and educate on the importance of the energy industry to provincial, federal, and global economies

Development:

The Government of Alberta response indicates that the Ministry of Energy is creating new initiatives to further develop and implement a targeted national campaign to increase education surrounding Alberta’s energy sector through the creation of an “energy war room”, the launch of a multi-media campaign to urge the federal government to approve new pipelines, and increased defense of Alberta’s energy sector by providing education about the importance of the energy industry to provincial, federal and global economies. RMA appreciates the Government of Alberta’s confirmation that the Petrochemicals Diversification Program will continue and that two projects have already been approved under this program. These projects will help revitalize Alberta’s natural gas sector resulting in job creation and economic growth. RMA assigns this resolution a status of Accepted in Principle and will monitor the Ministry of Energy’s progress in developing the energy war room.

Provincial Ministries:
Economic Development and Trade,
Energy
Back to Resolutions Database