Minister Savage on Coal Policy

What did we learn from Energy minister Savage’s press conference announcing the so-called reversal of the government’s unbelievably bone-headed decision to cancel the 1976 Coal Policy?  

Well, Ms Savage has some good speech writers. The “thank you for your passion” and “we made a mistake” bits were nice touches, but her speech did little to dig the government out of the hole it dug for itself.

Old policy?     

When the government cancelled the Coal Policy it imposed a 120-day moratorium on accepting new lease applications for Category 2,3, and 4 lands to give itself time to process pending lease applications. In early 2020 there were 506 leases awaiting approval.*     

Ms Savage made a big deal about issuing a directive to the Regulator not to process any new applications, what she didn’t tell us was how many applications had been processed between the end of the moratorium and Feb 8 when she reinstated the Coal Policy.

Energy Minister Ms Savage

Bottom line: With the exception of the cancellation of 11 leases which account for on 0.2% of Category 2 lands, there has been no roll back as a result of the government reinstating the Coal Policy, furthermore exploration activity for 6 projects in Category 2 lands will continue.   

Mountain top removal

Ms Savage announced there will be no mountain top removal in Alberta.

The operative word here is “will”.

Ms Savage is talking about the future mining activity, not ongoing mining activity. Furthermore, the directive she suggests supports the blanket prohibition on mountain top removal only applies to Category 2 lands, so is mountain top removal for projects like the Grassy Mountain Project on Category 4 lands still okay?

Context

Ms Savage gave us “context” to explain how her government screwed up so badly.

She said the Coal Policy was “outdated” and “obsolete.” It didn’t address climate change. It was cancelled for administrative reasons so the Dept of Energy could issue coal leases the way it issues oil and gas leases. And the government failed to anticipate the “unintended effect of removing the coal categories.”

Whoa. She just went from the Coal Policy was outdated to the government didn’t understand the effect of removing the coal categories.  

First, the policy could have been updated by adding language to address climate change.  

Second, the removal of the land categories wasn’t an administrative change. Coal companies identified coal lease applications in Category 2 as a substantive regulatory risk. They welcomed the government’s decision to make this risk go away.  

Third, the rationale that coal should be managed the same as oil and natural gas is hardly reassuring given the government’s lackadaisical oversight of the oil and gas sector including its decision to cut staff at the Alberta Energy Regulator, suspend reporting requirements due to covid, and its failure to require companies to set aside sufficient funds to reclaim orphan and abandoned wells.  

Bottom line: the context of the decision to cancel the Coal Policy is the government thought they could get away with it by slipping it in over the May long weekend during covid.    

Importance of coal mining

Ms Savage said coal mining has been an important part of Alberta for decades, the world is looking for steel making coal and Alberta businesses can meet the increasing demand for steel and provide good paying jobs.

Some specifics would be helpful here.

The total number of Albertans employed in the energy sector in 2019 was 138,372. At its peak, the coal sector employed a total of 2,985. Today it employs 1,542. Not exactly a ringing endorsement of the coal industry’s place in the energy sector hierarchy.

Who are the “Alberta businesses” that would meet the rising demand for steel by producing more coal? Teck, Canada’s leading metallurgical coal producer (headquartered in BC by the way, not Alberta) abandoned its Mackenzie Redcap project in 2019. Who’s left? Australian companies like Atrum and Hong Kong penny stock companies like CST Group?

The only “Alberta businesses” that will “benefit” from digging up Alberta’s coal will be sole purpose subsidiaries formed by foreign companies to shield them from liability when coal mining becomes unprofitable and the cost of reclamation is too high.

As far as meeting the increasing demand for metallurgical coal, Canada accounts for 1% of the world’s coal reserves and 1% of the world’s coal production. 35% of this 1% is produced in Alberta. You do the math, the world will not stop spinning if Alberta does not allow foreign companies to dig coal out of the Eastern Slopes.

Bottom line: expanding the coal industry by allowing more coal mining will not significantly improve Alberta’s economy, but it will make foreign companies and their shareholders richer.

Consultation

Ms Savage said the government wants to hear from Albertans “as we move forward with a modern coal policy”. 

Based on what she said in her press conference at a minimum Albertans should expect to provide input on a proposed policy that:

  • Beefs up the land category restrictions with additional “strength and vigor”
  • Eliminates the exceptions that allowed 4 current projects on Category 2 lands to be approved under the 1976 coal policy
  • Includes climate change mitigation measures
  • Effectively incorporates environmental and other regulations to protect our mountains, headwaters, foothills, parks and recreation areas (which means these regulations will have to be strengthened as well)
  • remedies Alberta’s lack of recourse when a company becomes insolvent and defaults on its reclamation obligations (perhaps a bond similar to the $6 billion loan guarantee Mr Kenney gave to KXL would be in order).  

Or we could simplify the consultation by asking a threshold question: Should Alberta expand coal development or wind it down?  

Over to you Ms Savage.

*For an excellent overview of the Coal Policy and related issues see Nigel Bankes https://ablawg.ca/2021/02/09/what-are-the-implications-of-reinstating-the-1976-coal-development-policy/

This entry was posted in Climate Change, Energy & Natural Resources, Environment, Politics and Government and tagged , . Bookmark the permalink.

25 Responses to Minister Savage on Coal Policy

  1. Jim McPhail says:

    As ever, a marvelous review of the ucp practice of “Watch my left hand (media) while I do the dirt with my right.”
    A couple of other problems with Savage’s announcement – With their playing games with semantics, we should note that open pit mines are not necessarily mountain top, but could be on mountain sides.
    Nor has she said they would back off from cutting water leases for farmers & ranchers from 5 years to 1, year, giving priority of already short supply water to industry such as coal mining.
    Thanks again for your keen insights and direct words!

  2. Carl Hunt says:

    Albertans should take a close look at the ‘Legacy Coal Mines’ that are closing at Grande Cache & Cadomin after 50 years of mining and check out the World Class Reclamation of land & water, including trout streams that are permanently buried in rock drains – leaching selenium into the streams that are left. Maybe remember the Obed Mine that was reclaimed with a flush when a dam broke and released 670,000 cubic meters of mine waste into a stream that contained Athabasca rainbow trout, SARA listed as ‘Endangered’.

    • Carl, thanks for these extremely relevant examples. Companies always say they’re going to do state-of-the-art reclamation and yet this is what we’re left with.
      There’s a reason why foreign companies create Alberta subsidiaries to carry on business in Alberta–the corporate veil guarantees the parent company will not be liable for the “sins” of its subsidiary.
      Jason Kenney should know this and if he doesn’t he can call upon Ms Savage and Mr Schweitzer, (two cabinet ministers who are lawyers) to educate him. He has no excuse.

  3. Dwayne says:

    Susan: Thanks for another great blog. Going backwards is always the supposed way forward with the UCP. This is the case with open pit coal mining in Alberta. I don’t believe for a second that the UCP have listened to Albertans on this. The UCP will continue to do open pit coal mining, after they divert people’s attention to something else. What about the environmental damage, such as selenium contamination? There is no known way to rectify that. Water is essential for plant and animal life, as well as for humans. If it is polluted, then what will we do? Water is still going to be more important than coal or oil. The UCP doesn’t care about the consequences of their decisions. Some foreign wealthy company will take in the profits, while Alberta gets a measly 1% royalty rate on coal (courtesy of the Alberta PCs, when Peter Lougheed was no longer the premier), employment in these mines will be temporary, and automation will do the bulk of the work, and the environment will ruined. It’s a no win situation for Alberta and Albertans. If Peter Lougheed were still alive, he’d have unkind words for the UCP. The sooner we can get the UCP out of power, the better. The damage will still take many years to correct, and that’s unfortunate. If Peter Lougheed thought something like open pit coal mining in the Rockies was damaging, it’s damaging. Peter Lougheed also did proper consultations on matters. The UCP isn’t doing that, regardless of how many panels they create. It’s much like the style of Ralph Klein’s governance. There was no public input given on his bad policies either. Think back to utility deregulation, privatization of driver training, registries, liquor stores, the flat tax, and many others. The UCP claims they were influenced by what Peter Lougheed did, yet they also were saying how they admired Ralph Klein. The UCP are in no way like Peter Lougheed, but are like Ralph Klein, (who Peter Lougheed didn’t like).

  4. Public Servant says:

    Thank you Susan for shining a light on this.
    It is now to the point where the UCP cannot be believed or trusted on anything they say.
    Their spin doctors can put out whatever rhetoric they want, but Albertans are coming to realize that they can’t be trusted.

  5. Joanne Helmer says:

    I think Alberta is at the point where logic makes no inroads with this government. Susan can point out the problems with the coal policy reinstatement until the cows come home. but the government isn’t reading her column, they don’t care what it says, and they won’t listen to reasonable arguments. they are ideologs who act on their own plan to make themselves and their buddies rich.

    • Joanne, I certainly agree with you.
      I take some comfort in the fact that the UCP is so out to lunch they’re attacking everyone, left, right, and centre. It’s interesting that some people were prepared to live with the UCP’s attacks on public healthcare, public education, AISH etc, but drew the line at blowing up mountains. Whatever, at least they’re finally paying attention.

  6. Mike Klein says:

    As always, thank you Susan for your research, analysis and clear communication.

    Why are we Albertans pursuing support of technology that is rapidly* being made obsolete by a non-coal alternative for steel-making?
    *(Rapidly being a relative term that clearly applies to this case because of the limited scale of Alberta coal’s influence making rapidly a correct description of progress)

    Please see Scientific American of May 9, 2013. https://www.scientificamerican.com/article/cleaner-cheaper-way-to-make-steel-uses-electricity/

    • That’s an excellent question Mike. The government’s own briefing paper indicates betting on coal isn’t necessarily a sure thing. It says rescinding the 1976 Coal Policy is expected to make the province more attractive to coal investment but notes “whether projects are pursued with the resulting economic and job benefits will remain largely driven by global coal price expectations and other factors affecting project viability such as royalty and tax rates, and production and transportation costs.” As with oil, global prices are the driver, but hey, let’s blow up our mountains, and destroy our air, water, and ecosystems to produce a product no one will want.
      Thanks for the link!

    • Keith McClary says:

      Could green steel become one of Australia’s most strategic minerals?
      18 January 2021
      https://www.mining-technology.com/features/could-green-steel-become-one-of-australias-most-strategic-minerals/

  7. Daniel Cournoyer says:

    Further Coal Developments as in Open Pit Coal Mining will lead to an unfix able Health crisis downstream Due to uncontrollable Selenium poisoning downstream of Open Pit Mining!
    The loss of potable water in all the Major Eastern flowing Drainages doesn’t bode well for spurring Economic Growth! In any sector!
    Public Health is at stake!!
    Don’t poison the water by allowing Coal Mines to exploit our Irreplaceable sources of water!!

  8. Dwayne says:

    Susan: Here is another informative and interesting article on the matter of coal mining pollution.
    https://nationalpost.com/pmn/news-pmn/canada-news-pmn/hollow-promises-top-coal-scientist-warns-albertans-of-contamination-from-mining

  9. Carlos says:

    what I find interesting about this whole new extreme right ascendancy is that they are the self proclaimed purest Christians and I would like one of them to explain to me one example of what they impose on others that is according to the teachings of Jesus?
    They lie, they bully, they cheat, they are greedy, they favor the very rich, they are the worst people as far as acceptance of other religions and much more.
    Are these people so dogmatic that they do not even understand their own behaviour or are they really big idiots that cannot understand anything period?
    Jason Kenney is the pure representation of a totally untrustworthy person but find someone more self righteous. The whole situation is agonizing and with Shandro, Savage and Nixon the circus is complete. I see that Lagrange has been shuffled to the background lately so she must have crossed what they consider their acceptance line which one can only imagine what could have been – maybe bringing back beatings to the schools.

    • GoinFawr says:

      “Hello,
      I’d like to start out this week with a request. And this one goes out to the followers of the three Abrahamic religions; to the Muslims, Christians, and Jews:

      It’s just a little thing really, but d’you think that, once you’re finished smashing up the world, and blowing each other to bits, and demanding special privileges while you do it, d’you think that maybe the rest of us could, sort of ‘have our planet back’?”

      – Marcus Brigstocke

  10. Carlos says:

    I thought today I would not read any news from Alberta because every time I do I get sick.
    I was driving and of course our excellency Jason Kenney was on the radio justifying why the plan to distribute vaccines was not transparent to the public. Of course I was not able to silence the radio and listened to the usual intelligent answers from our premier and I was not disappointed.
    First he said that the reason was that we are watching what other provinces are doing. So basically we cannot have plans because we have to check what others are doing.
    Second he said and not to change his dogma against Justin Trudeau – of course we do not have vaccines so why bother with plans.
    This is to me all so unreal but hey he wants to be prime minister so we have to allow him to gain some experience. This man has no shame even after all the bizarre scandals under his leadership. Of course it is all the fault of someone else.

  11. Comment says:

    You can tell the current wide criticism and bad publicity dogging the government is having an impact when we get the token (phony) apology, (phony) contrition, and (phony) promise to do better. But, Kenney has made a career of getting elected, so he knows how to play this game. What remains to be seen is if enough supporters are tiring of this. Time will tell.

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