Drew Anderson, Local Journalism Reporter, The Narwhal

Naheed Nenshi, the NDP leader of Alberta’s Opposition, is accusing Premier Danielle Smith of a scheme that could increase power bills for Albertans “so she can build AI data centres for her foreign billionaire friends.” 

The comments come from a news conference organized by the NDP in response to reporting by The Narwhal on a leaked document — labelled a “cabinet report” and bearing the Alberta government logo — that appears to show the provincial government is planning to take control of Alberta’s natural gas pipeline system to increase both supply and demand. 

The document outlines plans to wrest regulatory control over the province’s main natural gas transmission line, called the Nova Gas Transmission pipeline, owned and operated by TC Energy, away from the federal Canada Energy Regulator, and to create two new government-owned corporations. One of those Crown corporations could force companies to build natural gas pipeline expansions based on government priorities, while the other could build and operate the pipelines itself. 

Those moves, according to the document, would raise prices on ordinary Albertans and businesses, but would bring in more royalties for the government. 

“Let me reiterate this: Danielle Smith is rolling out the red carpet for data centres, and that will cause higher electricity prices, and she doesn’t care if it spikes your electricity and your heating bills,” Nenshi said.

Detailed questions were sent to several Alberta ministries prior to publication of the original story, but the government did not respond by publication time. 

Late Friday afternoon, the office of Minister of Energy and Minerals Brian Jean sent a statement to The Narwhal in response to a follow-up email asking for comment on the original story.

“Governments routinely examine a wide range of policy, regulatory and legislative options when considering complex issues, and internal materials do not represent government decisions,” it said.

“An increasing number of project proponents across a variety of industries have raised concerns about accessing industrial quantities of natural gas in several regions of Alberta. We are working with industry, including the natural gas infrastructure owners, to better understand these issues and identify practical solutions that support future growth and investment.”

The document on which the reporting was based was leaked to The Narwhal by a source within the Alberta government, whose identity is being kept confidential due to personal and professional risks stemming from the leak.

The moves could cost billions of public dollars if the government builds its own pipelines, according to the document. The document estimates it will cost more than $160 million just to institute the changes and fight anticipated legal battles with companies such as TC Energy, or potentially First Nations. “There may also be litigation risk from Indigenous communities and organizations where they believe that they have not been meaningfully engaged from early on in any proposed projects,” the document reads.

Sturgeon Lake Cree Nation Chief Sheldon Sunshine said his community, which is fighting a massive data centre proposal in northern Alberta led by celebrity investor Kevin O’Leary, is “outraged” by the details outlined in the document, which he says he has independently reviewed.

“For years, our Nation has been fighting for meaningful consultation and effective regulation of hyper-scale data centres — including the massive O’Leary Project,” he said in a statement sent to The Narwhal. Sturgeon Lake Cree Nation is not specifically named in the leaked document.

“Now we find out that the United Conservative Party government is trying to artificially drive up the demand for natural gas to lure even more of these data centres to Alberta — all while knowing that this would trample our Treaty Rights and send electricity prices soaring for all Albertans.”

The document estimates building a pipeline to meet government expectations could cost as much as $6 billion. The capacity from that new pipeline could provide enough gas for six gigawatts of power generation for data centres, according to the document. A recently rejected AI data centre near Olds, Alta., would have required a 1.4-gigawatt power plant and used as much power each day as the City of Edmonton.

According to information on TC Energy’s website, the company has invested approximately $15 billion into the Nova Gas Transmission system since 2015, with double the capacity increases outlined in the document.

The document points to the need to feed natural gas to AI data centres as a primary motivation for the moves, but also highlights desired growth in the oil and gas sector, saying “the Government of Alberta is actively courting hyper-scale data centre capital and other investors.”

Nenshi, who said he has now seen the leaked document himself, was blunt. 

“This report makes it clear that their strategy all along was to do whatever they could to increase natural gas prices, to promote the government’s own bottom line due to their own fiscal mismanagement,” he said. The document suggests the moves could increase royalties to the government while consumers could end up paying higher prices for their natural gas and electricity bills under the proposed plan.

Document leaked by whistleblower for whom Canada affords little protection: expert

According to David Hutton, a senior fellow with the Centre for Free Expression at Toronto Metropolitan University, whistleblowers who leak sensitive information to the media run a considerable risk, from losing their jobs, friendships or families through divorce.

He said Canada is “back of the bus” when it comes to protections. 

“International experts have done surveys of various countries and rated them, and we come out at the bottom,” he said in an interview. The federal government has a whistleblower program, but Hutton said there’s never been compensation awarded through it. 

Provincial laws are similar to the federal protections, including Alberta’s, and “are really not of any value,” he said. 

He stresses how crucial it is for public-interest information to see the light of day. As The Narwhal has reported, this is becoming increasingly difficult in Canada as multiple levels of government tighten freedom of information legislation. 

“Research done over decades now has consistently shown that tips from whistleblowers account for usually more than 40 per cent of all of the frauds that are uncovered [globally],” he said, highlighting one aspect of information that is shared.

There is no indication of fraud in the leaked document in Alberta.

The plans outlined in the document single out TC Energy, which owns and operates the largest gas pipeline system in the province, as a likely source for legal action pushing back against the plans, due to the impacts on its business. 

The company did not respond to questions for the original article or for this follow up. 

Nenshi said he has not yet spoken with representatives from the company after the revelations were made public, but intends to. 

“To actually say government wants to step in in order to hurt people, and that government is strong-arming a company to make billions of dollars in investments that they don’t want to make, with the threat of competing with them if they don’t?” he said. “That’s textbook bullying behaviour. It’s also bad economics and it’s bad business.”

Document points to constraints imposed by feds, says Alberta seeks to ‘achieve greater control’

The document points the finger not just at TC Energy, but also at constraints imposed by the federal regulation of the natural gas transmission network.

“Federal regulatory oversight … is now compounding Alberta’s gas access challenges,” the document reads, adding this oversight “has caused growing concern about the pace of infrastructure development for the [natural gas transmission network].”

The document suggests moving TC Energy’s Alberta pipelines back under provincial regulatory control and under the authority of one of the new government corporations.

Some pipeline networks within the province are already under provincial jurisdiction, including the ATCO distribution network that interconnects with TC Energy’s system. ATCO operates approximately 8,500 kilometres of pipelines in Alberta, whereas the Nova Gas Transmission pipeline, the province’s main natural gas transmission line operated by TC Energy, is about 25,000 kilometres.

“Without provincial regulatory oversight, the Government of Alberta is limited in its ability to compel federally regulated pipelines to invest in capacity expansions,” reads the document.

“Due to the federally regulated [natural gas transmission line] system being fully subscribed, the province cannot guarantee the timely expansion of gas transmission capacity required to support new demand.”

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This story is available for use by Canadian Press clients through an agreement with The Narwhal. It was originally published in The Narwhal, a non-profit online magazine that publishes in-depth journalism about the natural world in Canada. Sign up for weekly updates at thenarwhal.ca/newsletter. 

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