The Economist considered a number of cover illustrations for its Making Coal History edition before settling on a lump of coal on display under a bell jar like an artifact in a museum.
While The Economist was chronicling the demise of coal the Kenney government was busy cancelling Lougheed’s Coal Policy to give the industry a shot in the arm.
When the public got wind of the Kenney government’s machinations it demanded Mr Kenney reverse course. He responded with a PR brochure setting out the “myths” and the “facts” of coal mining in Alberta. It was intended to set our minds at ease, it did the opposite.
Kenney* said it’s a myth “the world” is moving away from coal because metallurgical coal is used in steel and steel will be critical for post covid recovery. He cites an S&P report in support.
Fact: 80% of all coal consumption occurs in Asia, 50% in China and 11% in India. North American and European consumption is plummeting. Coal was never high in the energy mix in South America and Africa in the first place.** So unless “the world” means China and India, Kenney is wrong.
Furthermore, the S&P report quotes one Australian coal executive saying coking coal will be crucial to Asia’s post covid recovery. Kenney facts hinge on the dreams of one coal executive trying to shore up support for the Olive Downs project in Australia because the IEA says global coal use will never surpass its pre-covid peak.
Kenney said it’s okay to lift the Coal Policy protection on Category 2 lands because coal mining in Category 1 lands is still banned and coal mining in Category 3 lands is regulated.
Fact: This blurs the difference between Category 2 and Category 3 lands.
When Kenney cancelled the Coal Policy, he removed the stipulation that open pit mining “would not normally be considered” in Category 2 lands (although exceptions could be made under certain conditions). This flipped Category 2 lands from “no” (like Category 1) to “yes” (like Category 3).
It’s like when your kid asks for the car. You can say “No, not unless I’m having a heart attack and you have to drive me to the hospital” (Category 2) or “Yes, as long as you bring it back with a full tank” (Category 3).
Coal development in what was once Category 2 lands will be allowed, subject to regulation, just like it’s allowed in Category 3 lands. The extra protection offered by the Coal Policy is gone.
Kenney said coal mines will not “forever change our mountain landscapes” because companies are bound by land reclamation and environmental rules.
Fact: This is ridiculous. Leaving aside the issues around reclamation and environmental rules (see below), even a two-year old knows a mountain has a peak and a wild landscape while a chunk of rock that’s undergone decades of open pit mining does not.
Kenney said it’s not true that cancelling the Coal Policy has deregulated Alberta coal development.
Fact: Cancelling the coal policy removed Category 2 lands from protection from open pit mining. These lands like the category 3 and 4 lands will be regulated by the Alberta Energy Regulation (AER).
The AER has been plagued with scandals and its new CEO, Mr Laurie Pushor brings the baggage of his own multi-million dollar land scandal in Saskatchewan. Pushor will supervise the downsizing of the AER (270 gone at last count) and implement $147 million in budget cuts to meet Kenney’s promise to cut red tape and open Alberta up for business.
Yep, we’re in good hands.
Kenney said water quality and key headwaters are not at risk because the Environmental Enhancement and Protection Act will protect our water supply and the AER will take care of the selenium issue which, he notes, wasn’t even mentioned in Lougheed’s Coal Policy.
Fact: Kenney’s assurance that selenium, water quality, and the headwaters fall into the purview of the environment minister Jason Nixon who has a troubling track record and the AER’s Pushor is hardly comforting.
Kenney said it’s a myth that a coal lease means a coal mine is on its way because coal projects must go through a strict regulatory and consultation process.
Fact: In addition to the concerns already expressed about Alberta’s regulatory process there’s the fact that Atrum, an Australian coal company, told investors the UCP government is “engaged and supportive” of its plans to develop its “flag ship asset” a large-scale project with multi-mine potential in Category 2 lands.
Right, it’s the UCP government, not the regulator they’re worried about.
Kenney said it’s not true his government is abandoning the federal/provincial plan to phase out thermal coal.
Fact: Fine, but we’re talking about coking (metallurgical) coal, not thermal coal. This is a red herring.
Kenney said it’s a myth the government didn’t cancel all the leases affected by his decision to cancel the Coal Policy. They cancelled 11 leases. Other leases resulted from requests made while the Coal Policy was in place.
Fact: The issue here is the cancellation of the Coal Policy, not the cancellation of old leases granted while the policy was still in place. Also, the fact the government cancelled 11 leases doesn’t mean it won’t approve any more that come along.
The coal companies will benefit from Kenney’s cancellation of the Coal Policy.
Atrum expects a post-tax internal rate of return of 25 to 26% with payback within 3.9 to 4.4 years.
It identified five key risks: stakeholder support, selenium, westslope cutthroat trout habitat, Category 2 zoning (a risk eliminated by Kenney when he killed the Coal Policy) and regulatory approval timelines (also mitigated by Kenney when he appointed Mr Pushor to head the AER and gutted its budget, leaving only the federal timelines in play).
Alberta will not benefit from Kenney’s cancellation of the Coal Policy.
Which brings us back to Peter Lougheed. When he implemented the Coal Policy he said the beauty of this province and the eastern slopes would not be destroyed to satisfy Ontario’s desire for cheap electricity.***
And here we are 45 years later watching Kenney destroy the beauty of this province and the eastern slopes to satisfy an Australian company’s desire for windfall profits.
It boggles the mind.
*“Kenney” is used here because the PR piece was presumably drafted under the direction of the man who holds the pen.
**The Economist, Dec 5, 2020 p 28
***Hansard, Oct 14, 1976 starting at 1339