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Alberta premier says resource project financing depends on climate progress

Jason Kenney says access to capital for projects in the oil and gas industry requires action on environmental issues from industry and government, a statement that marks a major shift in tone for the Alberta premier. 

Kenney, who is the leader of Alberta’s governing United Conservative Party, made the remarks during a question-and-answer session at the UCP’s annual general meeting on Saturday. 

The question focused on a comment from Erin O’Toole who, shortly after winning the federal Conservative party’s leadership race in August, said a future Conservative government would commit to meeting Canada’s targets for greenhouse gas emissions under the Paris climate agreement.

A party member asked Kenney if he was aware of that position when he decided to support O’Toole in the leadership race and whether supporting the Paris accord could hurt Alberta’s oil and gas industry. 

After stating former prime minister Stephen Harper supported the Paris accord because it was an “aspirational target,” Kenney said oil and gas companies are telling him that it is getting harder to access funding for projects from lenders without demonstrating a commitment to reducing greenhouse gas emissions. 

“I don’t think Erin [O’Toole] is wrong to say that we have to find a way forward for our industry where we don’t stick our head in the ground and pretend that the aspirations behind the Paris thing are not hugely influential in how capital is allocated and how market access decisions are made,” Kenney said. 

‘Walk and chew gum’

Kenney’s statements come as more international banks and funds, including Deutsche Bank, HSBC and Blackrock, the world’s largest asset manager, are stepping away from investments in the Alberta oilsands. French energy giant Total has written off $9.3-billion worth of oilsands assets. 

In July, Kenney said demanded Deutsch Bank provide reasons for its decision to stop funding oilsands and railed about the “misinformed campaign from European financial institutions.”

Jason Kenney was joined by federal Conservative Party of Canada Leader Erin O’Toole for part of the Q&A. (Submitted by United Conservative Party of Alberta)

But world events and Alberta’s ongoing financial woes may have convinced Kenney to try something new. 

Alberta is investing $1.5 billion in equity and $6 billion in loan guarantees in the Keystone XL pipeline, a project that Democratic presidential candidate Joe Biden has vowed to kill if he wins next month’s U.S. election. 

In order to ensure Alberta’s investment pays off, Canada has to show a potential new administration in the United States that the sector is making progress on reducing emissions, he said. 

“We have got to be able to walk and chew gum at the same time when it comes to the energy and environment dynamic,” Kenney said.  “One of the reasons I supported Erin [O’Toole] is that he gets that.”

O’Toole, who joined Kenney for a portion of the session, said that Canadian resource companies are making strides in meeting climate goals. 

“If we ever replace a barrel of Canadian energy from world supply, who’s replacing that?” O’Toole said. 

“They don’t care in other countries about carbon intensity, social governance, Indigenous engagement. So we should be proud of what we do here.”

The COVID-19 pandemic forced the UCP to move its annual general meeting online this year, with events spread out over this weekend and next.

The party held debates of policy and governance policies on Friday and Saturday.

The one-day session on Oct. 24  will feature speeches from Kenney, O’Toole, CPC leadership candidate Leslyn Lewis, Justice Minister Kaycee Madu, Energy Minister Sonya Savage and Jobs, Economy and Innovation Minister Doug Schweitzer.

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