EDITOR’S LOG

Alberta Oil - - CONTENTS - NICK WIL­SON nwil­son@al­ber­taoil­magazine.com

Al­berta has its en­ergy strat­egy, Canada still doesn’t

A SPECTER HAUNTED AL­BERTA,

the specter of tax – a Trudeau in Ottawa and the NDP in Ed­mon­ton had spooked the oil patch. Al­ber­tans re­mem­bered the rigs leav­ing in the early ’80s when then-prime min­is­ter Pierre Trudeau in­tro­duced the Na­tional En­ergy Plan and drove drillers out of the prov­ince.

Be­fore Pierre there was Peter – Premier Lougheed raised roy­alty rates in the early ’70s, and had the same rates for oil sands pro­duc­tion as for con­ven­tional oil. Af­ter the first Prime Min­is­ter Trudeau came Premier Ed Stel­mach, whose ill-fated 2007 roy­alty re­view deep­ened the oil patch’s sus­pi­cion of what it saw as med­dling politi­cians squeez­ing the bar­rel too tightly to fill govern­ment cof­fers. So the in­dus­try had good rea­son to be ner­vous when an NDP govern­ment got elected, hiked cor­po­ra­tion tax, and promised to get a “fair value” of oil rev­enue via yet an­other roy­alty re­view.

In­stead, oil firms got a govern­ment that lis­tened to them about it. The re­view panel con­cluded that un­der the cur­rent sys­tem Al­ber­tans do in­deed get their “fair share,” and rec­om­mended that the govern­ment leave it alone, give or take the odd tech­ni­cal tweaks. And that’s ex­actly what Premier Rachel Not­ley’s done.

But she’s done more. The Not­ley Doc­tine on en­ergy is tak­ing shape – co-or­di­nated, in­te­grated poli­cies. De­tailed sup­port for petro­chem­i­cal pro­duc­tion will be fol­lowed by yet-tobe-an­nounced help for refining and up­grad­ing. Re­plac­ing coal power gen­er­a­tion with re­new­ables and gas is also in the works. The strat­egy sup­ports gas pro­duc­tion and com­mer­cial­izes stranded NGLs and methane.

The most con­tro­ver­sial part of the Not­ley Doc­trine is, as the Premier puts it, “tak­ing car­bon out of the bar­rel” by in­creas­ing the car­bon tax (yet there’s no Cana­dian car­bon tax on the for­eign crudes im­ported by East­ern re­finer­ies), which she ar­gues will help get oil pipe­lines to tide­wa­ter. This hits oil pro­duc­ers’ bot­tom lines. The long-game, she hopes, will buy “so­cial li­cence” for pipe­lines and slash trans­port costs to new mar­kets east and west. Will it work? Only FIDs and per­mits will tell.

It will, how­ever, re­quire the co­op­er­a­tion of other provinces and mu­nic­i­pal­i­ties. B.C. says it doesn’t want the Trans Moun­tain pipe­line ex­pand­ing. Not­ley im­me­di­ately pushed back. So what’s the fed­eral govern­ment do­ing about it? The se­cond Prime Min­is­ter Trudeau’s elec­tion prom­ise was to sup­port each prov­ince’s en­ergy poli­cies. But when two provinces are at log­ger­heads, this isn’t much of a pol­icy – it looks like fence-sit­ting dressed up as plu­ral­ity. Canada needs a co-or­di­nated, in­te­grated, na­tional en­ergy strat­egy – and the lead­er­ship to push it through.

Prime Min­is­ter Trudeau should work with Premier Not­ley – to­gether they could drive the ghost of gov­ern­ments past back into the shad­ows.

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