Redford toasts oilsands deals, but future rules raise concerns

Premier Alison Redford raised a glass of scotch to “my friends from the oil and gas industry,” in a jokey Christmas greeting on This Hour has 22 Minutes.

That was funny. Today, it might even be real.

Extra seasonal Scotch is surely being consumed after Ottawa’s approval of the CNOOC takeover of Nexen.

The feds also banned further oilsands takeovers by statecontrolled companies except in “exceptional circumstances.”

The new rules were essential, both for credibility and Canada’s national interest.

But the basic $15.1-billion deal with the Chinese government company will go ahead. So will the $6-billion takeover of Progress Energy by Petronas, Malaysia’s state-owned company.

For the Alberta PCs, the CNOOC approval brings a huge sigh of relief.

The oilsands are key to Redford’s economic plan. Expected oilsands expansion and royalty growth are the main reason, the year after next, the PCs still project a $5.5-billion surplus.

The political risk was serious as well. After the province’s aggressive courting of investment from Asia, federal rejection would have made the Redford government look damn foolish and rendered future pitches meaningless.

Early this year, Prime Minister Stephen Harper and Joe Oliver, his energy minister, went to China to make the same case for investment. Turning down CNOOC would have soured the Chinese for years.

In the Alberta government, a massive amount of work was done to ensure that all questions raised by the deal were clearly understood — about labour practices, job protection, security, environmental standards and much else.

Politicians were carefully briefed on the government line. Deviationism was strongly discouraged.

As much as they worried about rejection of the deal, the provincial crew also fretted over approval with no credible limits on future state investment.

That could have further damaged Alberta’s already bruised “social license” to operate the oilsands.

But there was another, contradictory worry that shows how complicated this stuff can be.

The province is jumpy about the prospect of overly strict controls that challenge Alberta’s ownership rights.

That’s why Redford, in a statement issued late Friday afternoon, said she wants to understand what Harper means by “exceptional circumstances.”

“As owners of the oilsands resource we believe we have a stake in the decisions that affect the development of those resources,” she said.

“We will seek clarity on how ‘exceptional circumstances’ will be defined.”

Harper had other worries, which were plain to see in a running poll that the CBC flashed across the screen as he spoke. More than 80 per cent of viewers were opposed, even to this deal.

Generally, though, the prime minister did a masterful job of managing the tricky national politics.

The Canadian government didn’t divest itself of many interests over the years, he said, only to have them bought up by foreign governments.

And the oilsands, he claimed, could very quickly slide into ownership by “one government.” (Guess who?)

Harper added, though, that foreign state firms could still meet the exception test. And they may continue to buy minority interests in oilsands companies.

Alberta oil and gas assets are already owned by state-owned companies from Norway, Japan, South Korea and the United Arab Emirates.

Three other Chinese companies — partly state-owned — have offices in downtown Calgary to run their Alberta holdings.

Now the CNOOC deal is clearly an escalation by a Chinese outfit wholly owned by the Beijing government.

Overall, Harper and Redford have handled this about as well as they could.