Naughty or nice? Province announces new coal mining initiative

Posted on January 16, 2025 by Taber Times

By Cal Braid
Southern Alberta Newspapers
Local Journalism Initiative Reporter

  Just before Christmas, the Province announced its Alberta Coal Industry Modernization Initiative (CIMI). 

Were they insinuating that most of us have been naughty enough to deserve a lump of coal in our stocking? 

A Dec. 20 news release about the CIMI made it clear that that two objectives are top of mind: earning royalties and preserving the pure water that flows down our eastern slopes. The subject gained a lot of attention in southern Alberta after Crowsnest Pass residents participated in a plebiscite to determine whether they wanted to bring back coal mining in the region. The November non-binding referendum found that 72 per cent of residents were in favour of it.

  The provincial release said, “The CIMI will guide responsible coal mining practices with a goal of ensuring that Alberta’s waters are protected from mining contaminants such as selenium. (It) also acknowledges the global critical mineral importance of metallurgical coal. Thoughtful coal development will result in increased investment and jobs for Albertans while respecting the existing property rights of freehold mineral rights holders.”

  The Province supports rules that will prohibit mountaintop removal mining and ban new open-pit mines in the foothills, while at the same time increasing coal royalties to fortify the provincial economy.

  The CIMI will be responsible for building a long-term legislative and regulatory framework that allows for coal development under some of the most stringent protections in the world, the release said.

  Brian Jean, minister of energy and minerals, said, “Alberta deserves a modern coal policy that balances responsible resource development with strong environmental protections. Our job now is to develop a policy that respects the natural spaces in the foothills and protects water while allowing for responsible coal development that can attract investment and create jobs.”

  Rebecca Schulz, minister of environment and protected areas, added, “Alberta has one of the best environmental management systems in the world. We have strong and effective monitoring and regulatory protections in place to protect our air, water and lands and these safeguards will only get stronger through this initiative.”

  Steel is an essential global component for infrastructure growth and development, and the Province wants that steelmaking coal to fuel economic growth. In the process, it pledges a commitment to a greater adoption of alternative energy sources and technologies.

  The province has an abundance of metallurgical coal that can be developed into steel that can return to Albertans in products like passenger vehicles, home appliances, farm and industrial equipment, and building materials.

  To ensure Alberta is fairly compensated for the development of its coal resource, the government will be raising the coal royalty rates significantly on new coal mines. Beginning in early 2025, Jean’s ministry will engage with the industry to discuss Alberta’s plans for higher standards for coal mining. It will set the new coal royalty amounts and to develop strategies that balance regulatory improvement and environmental protection, with an emphasis on water protection. New coal regulations and legislation will be drafted for government approval later in 2025.

  The CIMI claims that protecting upstream headwaters is its top priority. Coal mining will only be allowed at the highest standards. Those standards would include:

-Prohibiting mountaintop removal mining as a coal mining technique.

-Allowing no new open-pit coal mining in the eastern slopes.

-Any new coal mining proposals, regardless of location, must use techniques which use best water practices and prevent adding selenium into waterways.

-New proposals will either need to be underground mines or use mining technologies that prevent selenium leaching and siltation.

-The protections set out in law and in the 1976 Coal Development Policy for national parks, provincial parks, wildland parks, wilderness areas, ecological reserves, and provincial recreation areas will continue.

  Royalties are a huge part of the Alberta government’s revenue stream, ranging from the millions, to hundreds-of-millions, to billions. That royalty money funds services like health, education, infrastructure and others. The Province also has a heritage fund set aside for savings, investments, and diversifying the economy. In March of 2024, the fund was at market value of $22.9 billion, but Premier Smith wants to grow it to $250-$400 billion by 2050.

  To be clear: the Province collects royalties on resources extracted from Alberta land because it owns the vast majority of the rights to those resources. It grants companies the right to develop them in exchange for a royalty.

  The Alberta government sets the terms and conditions for development, including royalty rates. The royalty rate for each well or project is determined by production volume; resource market price; the drilling and completion cost allowance (for wells), which is based on the well’s vertical depth, lateral length, and the amount of proppant placed; and whether the project is in pre-payout or post-payout.

  Minister Schulz said the province has world-class environmental management systems in place and ever-improving. If that’s true, the CIMI will soon have a chance to prove it as the cash begins to flow like mountain water.