Wednesday, April 24, 2019

Energy Jobs and the Economy: Kenney's Plans for Alberta

Alberta's new premiere Jason Kenney claims that by prioritizing the fossil fuel industry he can increase jobs and grow the economy. This was the central plank in Kenney's United Conservative Party (UCP) election platform. It is also an oft repeated refrain from conservative politicians.  However, this view fails to acknowledge that market forces are powering the demise of traditional energy.

There is mounting evidence demonstrating that macroeconomic trends are driving the transition away from fossil fuels towards renewable energy.

Despite the politically motivated rhetoric of conservative politician, the evidence shows that the fossil fuel industry is dying. Alberta is not immune as evidenced by the fact that the province has seen a steady stream of oil industry job losses. As reported by the CBC, the 2019 labour market update, from PetroLMI says direct employment in Canada's oil and gas sector will fall by more than 12,000 jobs this year, mostly in Alberta. More than 50,000 jobs have been lost in the Canadian oil and gas sector in the last five years representing a decline of 23 percent. In 2014 there were 226,500 oil and gas jobs and by the end of 2019 there will be 173,300 such jobs.

Fossil fuel jobs are expected to keep declining while the employment and economic opportunities in clean energy sector are expected to keep increasing.  The evidence appears to vindicate the assertion that the number of fossil fuel related jobs is declining while the number of green energy jobs is on the rise. As reported in a Globe and Mail article, a recent report indicates that 23,700 Canadians work in green energy organizations which is more than the 22,340 whose work relates to the oil sands.

The UCP makes the questionable claim that the repeal of the carbon tax will create 6,000 jobs by 2024. However, they refuse to acknowledge the sectors of the economy that are growing and providing jobs. They conspicuously ignore the 1000 new jobs already created by wind power in the province over the last two years and they bury the fact that Alberta's green energy industry has grown 500 percent in the last three years.

They ignore market realities including the fact that wind is actually cheaper than oil and gas. At the end of 2017 the province made history with its first wind auction that proved renewable energy could compete with coal and natural gas in Alberta. At 3.7 cents per Kilowatt hour this was the lowest price ever seen for wind power in Canada. The second and third round prices in 2018 were near record levels at 3.9 and 4.0 cents.

Before Kenney was elected premiere investors were lining up to take advantage of clean energy costs that are half the cost of new natural gas. Alberta's current slate of wind projects could generate 1,363 Mw of emissions-free electricity when they are completed. That is enough energy to power more than half a million homes. As Alberta Program Manager Joshua Buck wrote a 2018 Environmental Defence article titled The Future is Wind, "The numbers are clear, Alberta’s electricity could be generated by wind cheaply and cleanly".

Despite Kenney's criticisms of the provinces carbon tax program, the province's carbon tax program all evidence suggests that it was working well. The UCP plans to ignore Notley's intent to raise carbon taxes from $30 per tonne to $50 per tonne and Kenney has indicated he will introduce an anemic $20 per tonne levy that will go to an innovation fund.

Despite Kenney's promises to the contrary, this election will cost Albertans dearly. In 2019 you cannot hope to build your economic hopes around a dying industry. This is economic malpractice or at the very least an unconscionable degree of ignorance.

Kenney and the UCP will increase Canada's emissions profile and this imperils far more than just Alberta's economy.

Related
Kenney to Kill Climate Action in Alberta

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