Oil industry’s clout will wane, Taft tells SACPA
For many years, oil executives have ruled Alberta. “The oil industry runs Alberta for its own interests,” author Kevin Taft told a Lethbridge audience.
But that will soon change, he said Thursday, because many nations have begun moving toward a post-petroleum economy.
And projects like pipelines, that might have proven profitable in the past, may not proceed.
Taft, a former leader of the Alberta Liberals, credited former Conservative premier Peter Lougheed with creating policies which saw Albertans getting a fair share of the resource profits. He reminded participants at the Southern Alberta Council on Public Affairs that Lougheed believed Albertans should “think like an owner.”
But governments that followed have dropped royalty rates as low as one per cent, Taft said. And faced with a recession, Premier Rachel Notley and her cabinet reviewed those rates but decided to leave them alone.
Alberta now gets more revenue from liquor sales and gambling than it does from its oil resource, he said — and that resource income will continue to fall.
“Alberta is in for a tough time,” Taft warned. “This is only the beginning of what will be a very long process,” as fossil fuels become less and less important.
Oil-dependant communities will suffer most, he noted.
“Be thankful you’re not living in Fort McMurray.”
As the oil industry’s economic impact shrinks, he suggested, so will its political clout.
At its peak, Taft said, oil executives like Pat Black became Alberta’s minister of finance or energy, and then returned to Calgary’s power towers. Later, when former premier Ed Stelmach said it was time to reconsider oil royalties, he was escorted out of office.
“Democracy in Alberta has been captured by the oil industry,” with negative impacts on such public services as health care and education. It was raising the issue of climate change that led to Dr. David Swann’s firing as a medical officer of health, Taft noted.
And the province’s universities have been told to follow the party line. Particularly at the University of Calgary, he said, “there have been so many controversies over so many years.
“Very good academics have left the U of C because they’ve run up against the power of the oil industry.”
Asked about Lethbridge’s campaign to keep oil companies from drilling inside the city, Taft said those issues are still under the control of the Alberta Energy Regulator — a non-government authority that’s paid for by the industry.
And “He who pays the piper calls the tune.”
Taft told a questioner the economics of oil pipelines has already changed. He said the Energy East line — designed to ship western oil to eastern Canadians who depend on imported crude — was abandoned for economic rather than political reasons.
As for the contentious Kinder Morgan pipeline expansion, Taft suggested “We should be downplaying the rhetoric about this.”
In reality, he said, it’s about a Houston-based company that wants to ship raw bitumen to overseas refineries. But it’s now expected that “peak oil” demand will be reached within the next few years, Taft said, and then begin a long decline.
And as oil companies fade away, Albertans will eventually be left with a $20-billion environmental cleanup bill.
“That’s more that the Heritage Trust Fund.”
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