Renewable Energy Projects Worth Billions On Hold as Premier Smith Continues to Champion Oil and Gas

Alberta Premier Danielle Smith has reaffirmed her commitment to the oil and gas sector. This comes in the light of a report suggesting that halting renewable energy developments might put at risk investments valued in the billions.

At Glance

At the Canadian Energy Executive Association conference in Banff, Smith commented, “There’s no need for a transition as we have no plans of moving away from oil and gas.” She acknowledged the sector’s efforts to curb greenhouse gas emissions but indicated no diversion from production.

On August 3, the United Conservative Party under Smith took a sudden decision, putting a stop to approvals for new renewable energy projects exceeding one megawatt.

New findings indicate that this seven-month hold on renewable energy initiatives has affected 118 projects, summing up to $33 billion in investments.

An in-depth study by the Pembina Institute, using public data, showed these 118 projects include 5.3 GW of wind, 12.7 GW of solar, and 1.5 GW of battery storage. Investments tied to these projects amount to slightly over $33 billion, spread across 64 companies or partnerships. Additionally, potential annual revenues of $263 million from taxes and land leases across 27 municipalities remain unrealized due to the hold. These projects, once underway, would generate the equivalent of 24,000 full-time jobs over a span.

Despite the current pause, Alberta was previously on track to become Canada’s hub for renewable energy. Just last year, Alberta was responsible for a staggering 77% of Canada’s added solar and wind capacity.

Explaining the pause, Nathan Neudorf, Minister of Affordability and Utilities, mentioned it was in response to issues regarding land use and decommissioning plans for renewable projects presented by rural municipalities. With previous experiences of abandoned oil and gas projects, municipalities are cautious. According to the Rural Municipalities of Alberta, they are still owed about $268 million in property taxes by oil and gas firms.

Paul McLauchlin, president of Rural Municipalities of Alberta, clarified that they never requested a halt in project approvals but had only voiced concerns. Their primary worry is the potential loss of fertile farmland for renewable projects. McLauchlin stated that while they support renewable energy, they want it executed correctly. He further emphasized the significant financial benefits municipalities gain from such projects, citing Vulcan County as an example which has reaped considerable revenues from renewables after facing financial troubles due to oil and gas enterprises.

Jason Schneider of Vulcan County detailed how the county lost almost half its budget due to the oil and gas downturn a decade ago. Oil and gas companies either went bankrupt or chose not to pay taxes, leading to a deficit of around $13 million for the county. However, Schneider highlighted how, in recent years, renewables have offered a financial respite to Vulcan County, enabling infrastructural advancements.

Schneider hopes to prevent a repeat of past issues with the burgeoning renewable sector. As renewable companies make private deals with landowners, municipalities often remain uninformed. Yet, during application phases, the Alberta Utilities Commission mandates companies to outline decommissioning and land restoration plans.

On evaluating, the Pembina Institute ascertained that a typical 100 megawatt renewable project brings in between $125 and $175 million in development and construction investments, creates roughly 300 jobs during its construction, and yields $1.5 million annually in long-term municipal revenues.

For instance, several proposed projects in Medicine Hat could yield up to $44 million yearly in tax and land lease revenues. Similarly, a 160 megawatt wind project in the Municipal District of Smoky River could generate about $1.9 million annually.

The report’s authors suggest that while the Alberta Utilities Commission’s current requirements for decommissioning and reclamation can be enhanced, putting a blanket pause is unwarranted and hinders stakeholders ready to invest.

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