Business as usual for patch after Tory win
With a divisive election campaign over in Alberta, it’s time to get back to business as usual for the oil and gas industry.
The four-decade-old Progressive Conservative dynasty was able to survive a staunch challenge from the political right and endured Monday as Premier Alison Redford delivered a 12th consecutive majority government for her party.
Despite some electionnight drama — Energy Minister Ted Morton lost his seat — it is essentially status quo for the oilpatch.
“I’m not sure we’re going to be doing an awful lot differently,” Redford told a news conference the morning after she became the first woman to be elected premier of Alberta.
Redford’s comment referred specifically to lobbying for the Keystone XL pipeline to the U.S., but could have just as easily been an assessment of her approach to the industry.
Redford has already pledged the province won’t increase oil and gas royalties or make major energy policy changes without consulting industry.
Despite running budget deficits for the past five years, there was essentially no talk of oil and gas royalties during the campaign. A decision by then-premier Ed Stelmach in 2007 to hike royalties, he subsequently flip-flopped, drove a wedge between industry and the Conservative government it helped spawn the Wildrose party that so challenged the Tories.
Talk of royalties is essentially taboo in Alberta’s political circles these days.
Oil and gas, like all industries, craves policy stability. To that end, the oilpatch would have been thrilled that neither energy nor environment emerged as major issues in a 28-day campaign to govern the province that has world-scale oilsands resources and equally large environmental challenges.
A headline in the Toronto Star proclaimed “Oil industry the big winner in Alberta election.”
While that sentiment underplays the significance of the unlikely 61-seat majority government Redford delivered to a party that’s governed Alberta since before the OPEC oil crisis in the early 1970s, it’s not without merit.
“The election provides a lot of stability,” said Travis Davies, spokesman for the Canadian Association of Petroleum Producers. “It really gives Alberta an opportunity to continue on the path it had been on, to set the tone to demonstrate leadership for policy and regulation which enables responsible oil and gas development.”
The oil and gas industry is the biggest component of Alberta’s $260-billion economy. It’s also a key driver of the national economy and accounted for more than half of the 92,000 jobs created in Canada last year.
The upstart Wildrose found considerable support among the small-government, lower-taxes types that populate the oilpatch, but it’s safe to assume most oil and gas producers are pleased with the articulate and moderate Redford as premier.
In the election, voters essentially had the option of a rightof-centre and business-friendly government or an even more right-of-centre and businessfriendly government.
Not surprisingly, the Calgary Chamber of Commerce was supportive of the new government while Greenpeace said if Redford “truly understands the science behind the climate crisis” it means tackling the “tarsands” issue.
The Greenpeace comment was a clear jab at Smith, who said during the campaign that she questioned climate change science. Redford pounced on the remark to paint Smith as a polarizing figure with views that would harm Alberta’s attempts to secure allies for oilsands development.
“When I go to Washington, and I talk to people in the White House, on Capitol Hill, and I’m trying to talk to them about why we need Keystone, they don’t want to hear that I don’t believe in climate change,” she said during the campaign.
To support industry, Redford pledged $3 billion in funding over 20 years for an energy research group called AOSTRA 2, after the Alberta Oilsands Technology and Research Authority created by former Tory premier Peter Lougheed in 1974.
The commitment to science fits with Redford’s vision for a pan-canadian energy strategy that will help Canadians see the importance of Alberta’s energy industry. She also committed to a balanced budget in fiscal 2013-14 and no new taxes for three years.
Along with finding Morton’s re- placement, Redford is focused on working with other jurisdictions to ensure there’s appropriate regulatory oversight, markets for the growing crude volumes from oilsands and enough workers to ensure billions of dollars in energy investments that are planned proceed.
Redford, an international human rights lawyer, made the case in the campaign she could work with others more effectively than Smith and characterized the options for voters as a choice between a party that would put up walls and one that would build bridges.
Given the global attention, Redford’s ability to bridge the considerable divide between various elements in the energy debate could well define her term as premier.