From Straight Goods, two interesting articles on Alberta and its oil.
Numero Uno notes that Ontario’s oil addiction is fueling Alberta’s polluting ways, and reviews a bomb-throwerish book whose basic thesis is that Albertans are stupid for polluting so much and not giving a shit. Of course, it’s not as if our entire country isn’t car-dependent to a fault, and it’s not as if that isn’t feeding into the nasty state of affairs in Alberta. And it’s not as if there aren’t conservative politicians all over it doing their damnedest to keep it that way–because, they say, jobs depend on it. (Someone kindly clue them in to the radical notion that protecting the ecology is also good for the economy–environmentally-friendlier technology CREATES jobs. Someone also inform them that green politics are taking hold in Alberta even as the pollution problem goes from bad to worse–precisely because there IS a pollution problem, and the ranchers aren’t so happy with the oilpatch. Remember, farmers feed cities!)
Numero Dos is even more interesting. Finally, word is getting out that the way Alberta’s oilpatch does business…is not sound business. Alberta’s public sector is suffering because oil is treated as a private-sector purview, which it shouldn’t be. And the fact that the oil industry is still crying poor, has Ricardo Acuña of the Parkland Institute calling foul:
For example, one of the report’s most flawed recommendations is that no changes be made in the practice of only charging a royalty rate of 1 percent until a project’s construction expenses have been paid off.
Although this policy may have made sense 20 years ago when there was little-to-no industry interest in the oil sands and the price of oil was low, there is no reason for it when oil is at $80 per barrel and international corporations are literally lining up to buy oil sands leases.
Industry would have us believe that there is tremendous risk involved with oil sands projects. The realities are: that we know where the resource is; the cost of production is less than $25 per barrel; the demand for the resource is virtually guaranteed; and the market price will go nowhere but up in the foreseeable future.
Where exactly is all the risk?
The panel’s recommendation to increase the base royalty rate from the existing 25 percent to 33 percent is a step in the right direction, but still grossly inadequate. Although this move would increase Alberta’s total share (royalties and taxes) of tar sands revenues by some 40 percent, it would still leave the province firmly entrenched in the bottom half of jurisdictions around the world in terms of rent collection.
With countries like Norway and Venezuela obtaining 78 percent and 90 percent respectively, Alberta is far from being a leader in this regard. And contrary to industry threats of late, these countries are experiencing no shortage of oil companies wanting to invest in their resources.
Not only that, but Venezuela is experiencing a boom as a result of government investment of those oil revenues–into communities, co-operatives, agrarian reform, environmental protection initiatives, scientific research, healthcare, education, national defence…the list goes on and on. Instead of letting Big Oil make out like a bandit forever at Venezuela’s expense, Chavecito has them paying to play…and play they still do. The few who refuse, will soon find themselves out of fields to export, as the Middle Eastern stocks wind down, the war in Iraq grinds on, and Africa becomes too unstable. And by the time they find it out, they’ll be kicking themselves for being so damn greedy and unreasonable.
Pierre Trudeau’s energy plan, it turns out, was not only bang-on, but ahead of its time. Looks like Alberta could learn a thing or two from Venezuela–and if Albertans are smart, they’ll stop slagging off on Trudeau, too. It’s time to renationalize Petro-Canada in its entirety and restore it to what he intended it to be. And dust off the ol’ NEP–it could end up saving at least one province’s badly underfunded ass.