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The biggest challenge the Notley Government’s royalty review committee faces may turn out to be persuading the Alberta oil patch that, as they say, the past is a foreign country.
Review committee chair Dave Mowat tried to make that point less poetically last night in Edmonton, telling the 125 or so well-behaved folks who turned up for a community consultation at Grant MacEwan University that “you’re not changing the world by seeking social licence to market Alberta’s petroleum products, you’re recognizing how the world has changed.”
In other words — ahem! — oil prices are down because of external factors beyond Alberta’s control, the province’s biggest traditional market sees supplies of petroleum products increasing and demand declining, a huge number of people in that market don’t want to buy oil they see as part of a planetary problem and not part of the solution, and a significant number of people in Alberta demand change to the province’s royalty structure and they proved it by electing the NDP.
So the demands made by some of the participants in a noisy session the night before in Calgary that everything stay the way it was because people with a stake in the oil industry wish it could stay the way it was is not just politically unpalatable, it’s practically impossible.
“It’s just a different world now,” patiently explained Mr. Mowat, president and CEO of ATB Financial, who was chosen by Premier Rachel Notley’s government to lead the review that was a key platform promise of the NDP’s spring election campaign. “It requires us to be thinking of the next 10 years as opposed to the last 10 years.”
Well, Mowat is almost certainly right, but that will nevertheless be a hard sell to the likes of some of 300 the riled up Calgarians who scribbled things like “just stop the NDP madness, make us a competitive force” on the sheets provided during the committee’s Monday exercise in the form of public participation disparagingly known in some circles as dot-mocracy.
Judging from the media reports of the Calgary exercise, the Edmonton meeting was pretty tame in comparison — with a few politely phrased comments and questions, several expressing the concern Albertans could end up being stuck with the costs of cleaning up after energy companies that are for all intents and purposes being given our resources in return for creating a few jobs.
Oil patch insiders did pretty well for themselves when they bankrolled the Wildrose Party and used it in 2011 to help roll back then-premier Ed Stelmach’s 2009 royalty rate increase. If Stelmach had stuck to his guns, the profits would have continued to roll in anyway until 2015, and he’d likely still be premier today.
Instead, the budgeting incompetence of the former Tory dynasty under Jim Prentice, who like our prime minister seemed to think oil should be marketed by shoving it up the world’s nose, was exposed by the drop in the international prices fetched by oil, and Notley was elected premier. The political penalty for her government is potentially as severe if she fails to deliver at least a modest royalty increase — the screeches of the industry notwithstanding.
Indeed, while the top dogs in the patch keep the pressure on the Notley Government not to raise royalties too much, they’re almost certainly privately relieved that the review is taking place now when oil prices are low and they can make a plausible argument to increase royalties too much.
In late August the Canadian Association of Petroleum Producers was urging the government to get on promptly with the review — presumably while the low prices persist, no sure thing with the Russians and U.S.-led Western coalition sparring edgily over what happens next in the Middle East.
Mowat was accompanied last night by two of the four-member panel’s other members — Beaverlodge Mayor Leona Hanson and respected energy economist Peter Tertzakian. Former deputy minister Annette Trimbee, now president of the University of Winnipeg, was not at last night’s session.
Albertans who missed the four public engagement sessions — meetings were also held in Fort McMurray and Grande Prairie — can still offer their thoughts on the committee’s Letstalkroyalties.ca website.
This post also appears on David Climenhaga’s blog, AlbertaPolitics.ca.
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