Alberta’s Fossil Economy

As of this month, there are ten declared candidates running to replace Kenney as UCP leader. Polling is a little scant, but if punditry is any guide, the consensus seems to be that there are three front-runners: Brian Jean and Danielle Smith, both former leaders of the Wildrose Party, along with UCP finance minister Travis Toews. Children’s Services minister Rebecca Schulz and former UCP Legislative Assembly member Todd Loewen (booted from caucus for criticizing his own party on pandemic management) have some apparent momentum, but don’t seem likely to emerge from the pack.

Kenney was right-wing in every sense of the term — his government slashed health care and education budgets, proposed a retrograde overhaul of provincial school curricula, and pursued big corporate tax cuts as a first order of business after the 2019 election. Still, by the lights of politics in the province, the complaint that he was not sufficiently conservative is common and, in fact, served as part of the ground for his ouster. That the jockeying for his position is dominated by politicians to Kenney’s right is proof that the NDP win in 2015 has not necessarily moved the dial on the Right’s chokehold on the province. This does not mean, however, that Albertans are somehow congenitally conservative. Rather, right-wing preeminence is a result of the productive logics of the province’s economy. Conservative rule is a consequence, not a cause.

Resource extraction has been the cornerstone of the Albertan economy since oil was discovered near the central Alberta town of Leduc in 1947. In the postwar period, windfall revenues from the rapid development of the oil industry, led primarily by American capital, financed social spending in a way that undercut the appeal of socialist and social democratic political parties, which at the time were the main challengers to the conservative Social Credit government.

The oil crisis of the 1970s was further impetus for the development of the provincial oil industry, as the output of crude and petroleum products more than doubled over the period from 1967 to 1973. Deregulation over the 1980s and 1990s enabled further expansion in the lead-up to a major boom in 2006–7. The ups and downs have continued in recent years. Indeed, tumultuous boom-and-bust cycles have been characteristic of Alberta’s fossil economy all the way along, with repeated attempts and calls for some economic diversification that might shield the province from the worst of the lows.

And yet today, according to the Financial Times, Alberta is “a province where just about everyone,” myself included, “is related to someone who works in the oilfield.” The province has “pinned its economic future on increasing exports to its southern neighbor.” Currently, the energy sector represents fully a quarter of the Albertan economy, and nearly a tenth of national economic output. It is a massive industry.

In spite of the fearmongering about liberal do-good interventionism that is common among provincial conservatives, it is difficult to imagine any government, federal or provincial, turning its back on the energy sector. This is especially true as the price of oil continues to hold near or above $100 per barrel. The UCP is currently considering how to use a $3.9 billion budget surplus owing almost entirely to the disparity between actual oil prices and those forecast for 2021–22. It is a nice problem to have, even if it depends on conditions of global crisis.

The Contemporary Politics of Alberta Oil

Despite the good times, which, to be sure, aren’t so good at the gas pump, conservative political culture in Alberta is riven with anxiety over the future of the oil industry. No budget surplus can change the fact that the earth is warming with increasing speed, and fossil fuels are the major contributor.

One way or another, curbing the power and size of the fossil fuel industry is necessary, even in the face of the substantial interests vested in fighting against reform. Alberta’s oil sands, industry claims to the contrary notwithstanding, are dirtier and more challenging to extract from than reserves elsewhere. It is not unreasonable to think that the oil sands would be among the first major reserves placed on the proverbial chopping block.

Conservatives see at least two enemies on this front. First, the federal Liberal government led by Prime Minister Justin Trudeau, who, despite being far from impressive as a leader in the fight against climate change, is hated in the province. Nowhere in the country is Trudeau more profoundly disliked. Part of this is to do with his lineage — his father’s National Energy Program, implemented in the 1980s, is seen to have deprived Alberta of tens, if not hundreds, of billions of dollars in revenues.

Today, Trudeau’s rhetoric on climate change, while hardly ever matched with accompanying action, ensures his status as an enemy of the oil industry. Consequently, in the eyes of Alberta conservatives, he is an enemy of the province. The federal carbon tax is a notable bugaboo. Anti-Ottawa sentiment has a very long history in Alberta, and current tensions between the exigencies of managing the climate crisis and further developing the oil sands tend to make matters worse.

Second, the global turn toward investment based on the principles of environmental, social, and governance (ESG) factors is a concern. After years of dismissing ESG as a passing fad, industry leaders — and the UCP government under Kenney’s leadership — have actively promoted Alberta oil as a solid ESG investment.

The idea being sold is that Alberta oil is produced responsibly, in a democratic state, and with a real interest in climate-related technological advancement, especially in the form of carbon capture. This campaign routinely features overstatements — especially when it comes to climate.

Against claims that Alberta energy is about as good as it gets when it comes to ESG factors, Canada does not rank particularly highly on environmental issues related to climate change — even among other major oil-producing nations. It is not obvious that genuine ESG motives among investors would serve Alberta oil well in the long run. The future of the oil sands is far from assured by ESG trends in capital investment, and continued skepticism is warranted.

In this context, it should not be surprising that the watchwords of the UCP leadership contest thus far are “autonomy” and “sovereignty.” The two former Wildrose leaders, Jean and Smith, are the driving forces here. Jean’s campaign slogan, “Autonomy for Albertans,” and Smith’s focus on implementing the so-called Alberta Sovereignty Act both reveal a willingness to stump for naked self-interest as broader trends work against them.

Smith is the most extreme. The Alberta Sovereignty Act that she backs would run up against any number of constitutional obstacles. It is best understood as a rhetorical device to go along with her Trumpian slogan of “Alberta First” rather than a meaningful proposal. But practical or not, her insistence on sovereignty reflects the current anxieties of conservatives in Alberta.

Claims to sovereignty on the campaign trail have a whiff of ill-defined grandstanding. But in a province where an industry representing a quarter of economic output feels itself to be under threat from the federal government and investment trends alike, the ability to maintain the oil industry in the face of those threats is top of mind. “Alberta First” implies “Alberta Oil First.”

Jean, who represents the oil town of Fort McMurray in northern Alberta, is on a similar wavelength. He insists on constitutional negotiations with the federal government in order that Alberta’s “autonomy” be more respected. The invocation of “autonomy,” like “sovereignty,” would be nebulous in the absence of the economic centrality of the energy sector.

These rhetorical devices — sovereignty, autonomy — are not salient simply because Alberta conservatives are angry about the management of the pandemic or still frustrated about equalization schemes whereby provincial revenues are redistributed across the country. These appeals allow conservatives to address anxieties about the economic threat posed by divestment from the oil industry.

Toews and Schulz are more rhetorically subdued but nevertheless hugely supportive of the oil industry. Toews is effectively running on the recent budget surplus, claiming it was a result of his sound fiscal management — as if the skyrocketing price of oil had anything to do with the governance of the UCP.

Schulz likewise sees good fiscal management and the further development of the oil industry as two sides of the same coin, and she will “stand up to anti-oil politicians.” Todd Loewen sounds more like Jean and Smith — his campaign features rhetoric about how he is running for Albertans that drive particular kinds of trucks. If you live in Alberta, you know what he means.

The Reactionary Appeal

Alberta is often discussed, by scholars and pundits alike, as if its political culture were pathologically conservative, with right-wing ideas baked into the collective political psychology of the province. These discussions, especially when they take place among liberals or even leftists, foreclose upon important insights about politics in Alberta.

We are sure to see dismissals and critiques of the UCP leadership contest and its constituent candidates as a reactionary circus, par for the provincial political course. The prevalence of anti-vaccination and anti-mandate politics, as well as the influence of conspiratorial thinking, will make these conclusions even easier to draw. And of course, there is truth in these assessments. The UCP under Kenney was disastrous, and under a new leader it appears poised to get even worse. But it is important to make a genuine effort to understand both the appeal and the real meaning of these politics, not just to dismiss them or chalk them up to an immaterial political culture.

Resource extraction — of fossil fuels in particular — is considered by many to be a kind of Albertan birthright. And Alberta isn’t alone in this sense: belief in the right to extract and exploit natural resources is a defining feature of settler-colonial economies across the globe. As the reality of climate change threatens and imperils this perceived right, political actors are going to respond accordingly.

The politics of the transition, then, will be just that. No magic markets or genius innovators are going to get us through the ever more urgent climate crisis without political contestation. With turmoil guaranteed, it is imperative that these politics do not unfold under an established binary with fossil reaction on one side and technocratic liberal optimism on the other.

In a place like Alberta, where, again, the energy sector represents fully a quarter of the provincial economy, the left politics of the transition must at once be attendant to the first-order importance of slowing climate change, the class dimensions of decarbonization, and the settler-colonial assumptions that underpin the existing order. The reactionaries can be defeated, but that will require seeing the reaction for what it is: not a knee-jerk flare-up of “crazy conservatism” but a sign of the fossil politics we must overcome.