Alberta can win friends for oil sands, new Energy Minister says

May 8, 2012

Facing increased scrutiny from across Canada and abroad, Alberta needs a "social licence" and strong environmental performance to continue growing its oil and gas industry, the province's new energy minister says.

Ken Hughes was the most prominent rookie MLA in Premier Alison Redford's post-election cabinet shuffle on Tuesday, taking on one of Alberta's most crucial portfolios. He'll be juggling the demands of government, the public and industry while the province's oil industry is under the microscope.

But his appointment is also the latest signal that Ms. Redford hopes to shift Alberta's role within North America, reaching out to friends and foes alike while aiming to boost the public profile and image of its energy sector.

For Mr. Hughes, 58, that begins with environmental issues – it's no longer sufficient simply to dig up oil sands bitumen and sell it, he said on Tuesday, adding that Alberta must prove to people beyond its borders that "we are conducting ourselves appropriately so that we have a social license to continue to develop our resources."

He told The Globe and Mail that Alberta has no choice in the matter.

"There are strategic challenges we face around our ability to develop the natural resources we have, do it in an environmentally appropriate way and tell the rest of the world how we're doing that in an environmentally appropriate way," Mr. Hughes said. "...This is a great gift we have received. It's not of our own creation, but to make the most of it is our obligation. The fact we are so fortunate imposes upon us a higher level of obligation of performing well."

His appointment caps a frenzied few weeks for the former chair of the province's health board, one-term Progressive Conservative MP and Harvard-educated insurance entrepreneur who was elected to Alberta's legislature last month in a hotly contested Calgary race.

He has worked in the energy sector, but insisted familiarity is an asset and that he's "not captured by the energy industry." He was also part of Ms. Redford's transition team after she won the PC leadership last fall, and the Premier didn't hesitate to hand him such a prominent posting.

"I will say Ken was one of my very first considerations, and I settled on him very quickly [for the portfolio]" Ms. Redford said.

With environment minister Diana McQueen, who on Tuesday also took on oversight of the province's sustainable resource sector, the trio will be the faces of Alberta's shifting role in Canada. Ms. Redford has championed a Canadian energy strategy that would knit together the renewable and non-renewable energy sectors of several provinces – and, presumably, help push a pipeline through to the West Coast.

Mr. Hughes will take a lead role in that, and is free to reinvent his position – Ms. Redford's caucus has no former energy minister. He said it's important for Alberta to reach new markets, through pipelines, but demurred when asked about whether he'd consider raising the carbon tax.

He also declined to speak about his predecessors' record on environmental performance.

"Look, we are where we are today. What we need to do is ensure that, going forward, we are developing our resources in as environmentally appropriate a way as we possibly can," he told The Globe.

Mr. Hughes comes with baggage. He was the inaugural chairman of Alberta Health Services, a health super board created four years ago that has been a lightning rod for controversy. He said the electorate wouldn't have voted for him last month if it were a major concern.

Wildrose leader Danielle Smith said he oversaw the "complete failure of our healthcare system" to deliver services.

"I have to say, I think Mr. Hughes has a lot to answer for," Ms. Smith said, later adding: "Having him in the most important position – the energy portfolio, which is the most important ministry for the health of our economy – has me concerned, there's no question."

A spokesman for the Canadian Association of Petroleum Producers said Mr. Hughes' business experience and ties in both provincial and federal government will serve him well. "It's obviously an important portfolio for us in Alberta," CAPP spokesman Travis Davies said.

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