Some sectors of oil industry ‘dragging their heels’ on climate in favour of profit: Trudeau

Prime Minister Justin Trudeau and Alberta Premier Danielle Smith found themselves at loggerheads yet again Wednesday after he suggested that at least some in the oilpatch have prioritized profits over securing a long-term future for its workers.

In an interview on Real Talk Ryan Jespersen, Trudeau said that parts of the oil and gas industry, by “dragging its heels” on decarbonization, had in fact turned its back on oilsands workers. Those remarks caught Smith’s attention, who fired back on social media, calling his comments “absurd” and accusing him of using Alberta as a punching bag to win votes.

Trudeau made the comments to Jespersen when the prime minister was asked why many workers in the oil industry feel like the federal government doesn’t have their backs.

“In some sectors, some of the oilsands companies have been really innovative and are leading the way on that. And that is great. And we are encouraging them, and we’re investing with them. We’re supporting them in decarbonization investments,” Trudeau said.

“But those who are crossing their hands and saying, ‘You know what, the world’s still going to need oil for another decade so, another few decades or so. It’s still going to need every drop that we can produce.

“‘So why would we raise our costs right now and invest in innovation, when we can just do the same things we’ve been doing for decades and make profits — and the fact that we’re going to leave people with a dirty mess and no jobs, because we haven’t prepared for the jobs of the future?'”

When asked by CBC News as to specify which companies Trudeau was referring to in the interview, a spokesperson in the Prime Minister’s Office said they had nothing to add beyond those comments.

During his interview on Real Talk, the prime minister went on to say that the companies that are “dragging their heels” might suggest that such a problem is one for the next generation to handle, while the job of companies today is to draw profits.

“That is what is hurting oilsands workers. They’ve been fooled by people who are saying, ‘Oh no, no. Climate change is a Liberal or a Chinese plot. You don’t have to worry about it. Just keeping doing things exactly as they were a decade ago, two decades ago,'” Trudeau said.

“That’s not preparing for the future that Albertans, like all Canadians, know is changing.”

In the interview, Trudeau also criticized provincial leadership for what he said was a hesitant approach towards climate change and stressed the importance of Alberta’s role in leading Canada’s transition to renewable energy and meeting climate targets.

“If you can build the technology necessary for an oilsands refinery, you can build the technology necessary for a hydrogen plant. These are things that Albertans will have great jobs in in the future, if the Alberta government gets out of its ideological opposition to doing things that are good for workers, good for the planet,” Trudeau said.

Trudeau was in Edmonton to announce $175 million in funding as part of the federal Housing Accelerator program, which is intended to be used to build 5,200 new housing units in the city over the next three years. 

Smith says PM’s interview was ‘absurd’

Smith on Wednesday held a televised address in which she suggested Alberta would trim spending with an eye toward growing the Heritage Savings Trust Fund in an effort to wean the province off resource revenue by 2050.

She was quick to respond to Trudeau’s interview on X, formerly known as Twitter.

“We know that Albertans do not take his absurd claims seriously; however it is sad to see this Prime Minister, like his father before him, try to use Alberta as a punching bag to win votes in other parts of the country,” Smith wrote.

“Instead of attacking our province, Mr. Trudeau could have informed our government about his visit to Alberta and extended an invitation to meet with me to discuss our amazing energy sector and workers.”

The premier also suggested Trudeau had called Albertans “fools.” In the interview, Trudeau said Albertans were getting fooled by right-wing politicians.

“If the Alberta government … gets out of its ideological opposition to doing things that are good for workers, good for the planet, maybe not good for classic oilsands companies, except that they’re also investing massively in decarbonisation, and renewables, this is the dynamic that quite frankly, Albertans are getting fooled by right-wing politicians,” he said.

In her post on X, Smith also said that “next time the Prime Minister visits Alberta, I hope he calls my office to arrange a meeting as he did with the premiers of Ontario, British Columbia and Manitoba. I await his call.” 

A staffer in the prime minister’s office said Smith’s office was given a heads-up that the prime minister would be in Alberta. When asked to follow-up, a spokesperson in the premier’s office said her comment stood.

Oil and gas industry has seen profits soar

The oil and gas industry has seen its profits soar post-pandemic — 2022 was the most profitable year in the history of the oilpatch, and oil and gas sector CEO compensation jumped double-digits.

Alberta oil output has also hit a new record as producers ramped up for the completion of the Trans Mountain expansion project, which was bought by the federal government in 2018 when the project’s future looked cloudy. That project, which has suffered massive cost overruns, is expected to add over half a million barrels per day of Canadian oil export capacity when it comes online.

Companies are always going to prioritize profits and shareholders, said Keith Stewart of Greenpeace Canada.

“Anyone who claims otherwise is trying to fool you. And Albertans aren’t fools. … They can see electric vehicles coming in, and the way that’s going to reduce demand for what they’re selling right now,” Stewart said. 

“They should be skating to where the puck is going, rather than getting left behind and replicating the experience of Newfoundland with the cod industry.”

CBC News has requested comment from the Pathways Alliance, a consortium of Canada’s biggest oilsands companies. Oilsands companies are currently working to develop a proposed $16.5 billion carbon-capture project.

CBC News has also requested comment from the Canadian Association of Petroleum Producers.

Richard Masson is an executive fellow at the University of Calgary’s School of Public Policy and chair of the World Petroleum Council-Canada, which hosted the World Petroleum Congress in Calgary last summer. The theme of that international meeting was on the energy transition and “the path to net zero.” 

Masson said the oil and gas industry is working hard to move forward with mitigating emissions, but faces challenges due to unclear regulations and lengthy approval processes.

“This is a really complex problem. It’s going to take all of the efforts of the federal government, the provincial government, and the industry. And if we don’t get it right in the near term, we’re going to be left behind,” Masson said.

On Thursday, Rebecca Schulz, Alberta’s minister of environment and protected areas, accused the federal government of dragging its feet on passing an investment tax credit for carbon capture and utilization and storage projects.

“We are implementing a plan to meet global energy demands that aspires to carbon-neutrality by 2050, and it’s time for Ottawa to stop working against us and start working with us in the best interest of Albertans and all Canadians,” she said in a statement.

Political analyst Lori Williams of Calgary’s Mount Royal University said while the prime minister and Jonathan Wilkinson, the federal minister of natural resources and energy, have historically not appeared to be particularly willing to go toe-to-toe with Alberta premiers on some of these issues, that calculation may be changing.

“It might make some sense, politically, or just even understandable to respond to attacks that have been happening for an extended period of time. I’m not sure that this is the most effective way of dealing with some of the differences between the two levels of government,” Williams said.

At the same time, Williams said some of Smith’s characterizations of Trudeau’s comments were not accurate.

“She claimed he called Albertans fools, and that’s not at all what he said. He was warning about being fooled or deceived by certain initiatives or claims,” Williams said. 

An Alberta-Ottawa working group has been meeting since last September, with a stated goal of finding consensus around emissions reduction and energy development.