Danielle Smith Plans to Stick Taxpayers with Fossil Fuel Risks

According to the Council of Europe, “de-risking” means “the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk.”

But when Alberta Premier Danielle Smith uses the term, as she has been doing frequently lately, she obviously has something quite different in mind.

We’re going to have to wait a little longer to discover exactly what she’s planning, but it’s pretty clear that “de-risking,” Alberta style, is likely to involve providing public subsidies to either the electricity generation industry or the natural-gas extraction industry or both to overcome reluctance by bankers to invest in fossil fuels.

For example, Saturday on the free 45-minute advertisement that Global News provides Smith in the guise of a radio program called Your Province. Your Premier, she delivered a windy lecture on how you can’t develop wind and solar power without having an identical amount of natural-gas-powered electricity generation as backup.

Now, some experts might tell you the premier’s version of the facts is not precisely factual, but it’s the version she is peddling with her trademark mix of confidence, anecdotes that may or may not have actually happened and claims about technology that may or may not be true, with the blame for any problems always placed squarely on the Trudeau government.

To give Smith her due, she is very good at this. This is especially so on radio, where she long worked as a right-wing talk show host. She sounds very convincing if you don’t carefully parse the tales she tells.

So Saturday she described someone she talked to (unidentified, naturally) bringing forward “a perfect project” for a natural-gas electricity plant.

She continued, in tones implying she was letting her listeners in on a secret, that her contact “went to three different banks, and the banks said, ‘No, because of the federal uncertainty that you might shut this in, it might be stranded. We’re not prepared to fund that. But if it was a solar or a wind project, we would.’”

Did this really happen? Did it happen just as Smith described? It’s impossible to say.

“So that’s the problem that we’re facing,” she continued. “If I have to step in and de-risk those kinds of projects, so that they get built, so that we do have reliable power, we’re going to have to do that.”

“I don’t wanna do it! I’d rather solve this dispute that we have with the federal government so that they understand natural gas is an important transition fuel,” she went on.

After all, as she’d said in the lead-up to this yarn, which she also cited as a reason she “had to invoke” the Sovereignty Act last fall, “we believe in the market. We do!”

Indeed, it is true. The UCP does believe in the market. Except, of course, when it doesn’t.

Smith said much the same thing on Feb. 15 at that now-notorious black-tie dinner at the Ranchmen’s Club in Calgary where she bragged about homeless encampment rousts in Edmonton and boasted that the “left has their head explode almost every other day” as a result, to the cheers and chuckles of her well-heeled hosts.

In the recording of the upscale shindig obtained by the Progress Report, Smith complained that “nobody wants to invest in natural gas.… The banks won’t fund those kinds of projects.”

She blamed Ottawa, of course. “It’s because the policies are such that on Jan. 1, 2035, if you’re not 95-per-cent abated… you’re outta compliance with the law,” she claimed. “So no company is going to let their CEO go to prison, or their directors go to prison.”

Federal Environment Minister Steven Gilbeault has described Smith’s claims as misinformation. “I keep seeing critics falsely claim that we are banning all gas generation by 2035, upon threat of jail time,” he said in Ottawa last fall. “This fabrication is not designed to inform, it is designed to inflame. But while factcheckers play whack-a-mole with misinformation and insults around climate change, the cost of inaction keeps rising.”

Needless to say, this hasn’t stopped Smith. “They’re just not going to be investing in those projects,” she told the sympathetic Ranchmen’s crowd. “So don’t be surprised if we have to step in to de-risk this market. I don’t want to do it, I’m a free enterpriser.”

So you’ve heard it from the lips of the premier: Don’t be surprised if she steps in, Jason Kenney style, to “de-risk” natural gas development.

One way or another, though, you can be pretty confident Alberta taxpayers are going to end up having to pay the freight while the UCP tries to pick economic winners and losers.

Maybe it’ll cost as much as it did when Kenney, her UCP premier predecessor, gave away $1.5 billion for that pipeline to nowhere the last time Donald Trump was running for president. Maybe it won’t.

Meantime, though, as Smith explained on the radio this weekend, the rest of us are just going to have to live with “a little bit of belt-tightening.”

“I just didn’t want to run a deficit,” she explained.