Fossil fuel captured provinces are at war over climate policy.

Alberta Premier Danielle Smith is betting her political future on warring with Ottawa over energy policies, and a working group between her government and the feds is poised to be the theatre for this conflict.

A draft text of the working group’s term of reference obtained by Canada’s National Observer reveals how the battle could shape up. But within days of the rules of engagement being agreed on by the two governments, Smith said she has no intention of finding common ground on promises Ottawa has made.

“Under no scenario will the Government of Alberta permit the implementation of the proposed federal electricity regulations or contemplated oil and gas emissions cap,” she said in a statement Wednesday. “Ottawa has no constitutional authority to regulate in these areas of exclusive provincial jurisdiction.

“We would strongly suggest the federal government refrain from testing our government's or Albertans' resolve in this regard.”

Smith’s office did not return requests for comment asking to clarify what steps she might take in light of the suggestion Ottawa “refrain from testing” her.

The Supreme Court of Canada has ruled that combatting greenhouse gas emissions is within the federal government’s purview when Alberta, alongside Saskatchewan and Ontario, fought the carbon tax. Environment and Climate Change Minister Steven Guilbeault previously said he expects Alberta will similarly challenge the oil and gas emissions cap when it is introduced in a potential rematch over jurisdiction to fight planet-warming greenhouse gas emissions.

“We need to make sure we have all our ducks in a row to ensure we're on solid legal ground because it will get challenged,” Guilbeault told Canada’s National Observer in July.

When the working group was announced earlier this summer, Prime Minister Justin Trudeau described it as a way to find “common ground” as his government attempts to shepherd a series of energy and emissions reduction policies from promises to legislation. But Smith has been clear her red lines will make common ground difficult to find, and her stated intention with the working group is to force Ottawa closer to Alberta’s position.

The six-page terms of reference draft for the talks says the group, capped at 10 individuals per side at any given time, is expected to work together for eight to 12 months. It notes the working group discussions do not prevent either government from pushing legislation forward during this period.

Guilbeault said the terms of reference put into writing the federal government’s commitment to “open discussion and exchange of information.”

However, he stressed the discussions will not derail the delivery timeline for federal climate goals. “The Government of Canada remains committed to climate and economic action as we pursue a net-zero electricity grid by 2035 and an oil and gas sector emissions cap,” he told Canada’s National Observer in a statement.

Environmental advocates fear the working group’s talks, which could last up to a year, might translate to further delays to forthcoming regulations. The oil and gas emissions cap was first promised in 2021, and draft regulations were previously signalled to be ready by spring 2023 with final regulations ready by the end of the year.

Despite assurances Ottawa remains committed to capping oil and gas sector emissions, a potential delay has Aly Hyder Ali, oil and gas program manager with advocacy organization Environmental Defence “very concerned.” He said Smith is so determined to avoid an emissions cap at the same time the federal government has committed to introducing one that it is difficult to see how the two sides can meaningfully collaborate.

“Right off the bat [with this working group], I'm trying to understand, but I'm failing to do so, how they go from extreme positions to somewhere in the middle where the federal government is still able to keep the promises that it's made,” he said. “Premier Smith has been quoted multiple times in her own statements and elsewhere that she is not going to accept any emissions cap — forget a weak one, forget a strong one — she's not going to accept any oil and gas emissions cap.

“So I'm left scratching my head with what the purpose of this working group is, what it intends to do, and how it helps Canada meet its climate commitments and address these catastrophes that we're seeing.”

He called the oil and gas emissions cap a “make-or-break regulation,” and noted that despite Alberta being the country’s largest fossil fuel producer, the legislation would apply across the country, meaning there’s more to consider than just Alberta’s preferences.

A poll from Abacus Data earlier this year found across the country, a majority of Canadians believe the oil and gas sector should be regulated to reduce emissions. Support was highest in Quebec, a province the Liberals need support in to stay competitive if Trudeau wants another term.

According to the draft terms of reference, there are six expected outcomes on the table. A “shared information base and agreed actions” for the “eventual decarbonization” of the province’s electricity and oil and gas sectors; an “investment framework” to help attract decarbonization investments initially focused on carbon capture, hydrogen and small modular nuclear reactor technologies; potentially using carbon credit trading for Alberta and Canada to claim emissions reductions in other countries; a “shared understanding” of jurisdiction on emission reduction legislation in the context of an energy transition; and a “framework for resource partnerships” to include Indigenous groups in energy resource projects.

“The terms/scope of this working group — if acceptable to the federal [government] — say a lot about what we can expect from the Trudeau government as a response to the climate emergency,” University of Alberta professor Laurie Adkin told Canada’s National Observer.

“The terms reinforce the policy tools that have failed, to date, to radically reduce emissions, promise further subsidization of the oil and gas sector, put our eggs in the basket of expensive, unproven technologies, treat decarbonization as a purely technological problem, and ‘industry’ as the only relevant stakeholder, and reproduce the status quo relationship with Indigenous nations in which they are excluded from the tables where policy decisions are made.”

Throughout this year, Smith has ramped up attacks on the federal government. Earlier this week, she used an alert urging Albertans to reduce their electricity as justification to invest further in natural gas power generation, even though a major contributor to the energy shortfall was a powerline under maintenance.

Speaking to a friendly audience of fellow conservatives in March, she called federal climate policy an “existential threat” to Alberta. She has also repeatedly attacked the federal government for proposing a just transition plan that she says signals the end of Alberta’s oil and gas industry.