On the same day that the Health Minister unceremoniously fired the Alberta Health Services board for refusing to revoke $3.2 million in bonuses, the Energy Minister announced the appointment of the Alberta Energy Board.
Hmmm. I wonder whether in a year or two this newly minted board will find themselves pilloried in the press as utter incompetents or hailed for valiantly balancing resource growth with strong environmental commitment…
…and my mind drifted to Machiavelli’s landmark treatise, The Prince. The fundamental premise of The Prince is that successful governments must be willing “to act ruthlessly to attain their ends.”
This begs the question: what are their ends? Serving the public interest? Serving corporate interests under the guise of serving public interests? Staying in power at all costs? Machiavelli would argue it’s the latter. And his little book The Prince provides a how-to manual on how to succeed.
The PC government might not have The Prince at its bedside table but the creation of the Alberta Energy Board under the new Responsible Energy Development Act indicates that it’s somewhere close at hand.
The new Alberta Energy Regulator and its Board
The government “streamlined” the regulation of the oil, natural gas, oilsands and coal industries by creating the Responsible Energy Development Act (REDA) and folding the regulation of these industries under one regulator, the Alberta Energy Regulator. The new Regulator is responsible for all regulatory functions previously performed by the Energy Resources Conservation Board as well as the regulation of public lands, water and the environment.*
Now here’s the Machiavellian bit. The government used REDA to erase the Regulator’s independence. This was achieved with three clever statutory changes.
One: REDA gave the Energy Minister the power to issue “directions” to the Regulator to ensure its work is consistent with government priorities and policies and the Regulator must comply.**
If the Regulator refuses to comply, its Commissioners will be fired à la the Health Minister’s recent firing of the AHS board (who incidentally were not under a statutory obligation to comply—a convenient example of what happens when you cross your Minister).
Two: REDA created a brand new board to be “responsible for governance and the general direction of the Regulator’s business and affairs.”***Gerry Protti, the Chairman of the Board (more on him later) said this “corporate-style board” will set the direction for the organization’s business, approve regulatory change (??) and set performance expectations for the Regulator.*
Excuse me? The Regulator is a quasi-judicial body with broad powers including the ability to take away an individual’s property rights. Its predecessor, the Energy Resources Conservation Board was answerable only to the courts. Why, pray tell, must this Regulator be answerable to a corporate-style board of directors who are statutorily obligated to take their directions from a single shareholder—the Minister of Energy? ****
What’s next? A corporate-style board to oversee the activities of the Court of Queen’s Bench?
Three: By replacing the Energy Resources Conservation Act with the new and improved REDA, the government vapourized Albertans’ ability to challenge industry applications on the grounds that they’re not in the “public interest” (fancy that).
Public interest has become a matter of policy to be decided behind closed doors by the Minister of Energy and industry representatives. If they decide it’s in the public interest to exploit Alberta’s natural resources at breakneck speed, so be it. The Minister will pass this policy on to the Regulator as a directive and the Regulator must comply. Forgive me for being uneasy about this. It’s just that the Energy Minister does not have my phone number on speed dial and won’t get my input.
Who’s running the show?
The government website proclaims that “Under the Responsible Energy Development Act, the new regulator will operate at arm’s length from the Government of Alberta, under the direction of an appointed board of directors and chief executive officer.” And who might that be?
Let me introduce the Chairman of the Board: Mr Gerry Protti. Mr Protti comes to us from his post as president of the Energy Policy Institute of Canada, a non-profit organization “concerned about Canada’s energy future.” The Institute is supported by Encana, Canadian Oil Sands Limited, Suncor and Shell. Previously Mr Protti was the VP of Corporate Affairs at Encana and a founding member of the Canadian Association of Petroleum Producers (CAPP), the industry’s lobbying arm.*****
Let me also introduce Mr Jim Ellis, the CEO of the Regulator. Mr Ellis was the Deputy Energy Minister prior to accepting this position. Mr Ellis sees his role as “balancing the need for consistency and regulatory certainty while bringing new environmental regulatory responsibilities into the [Regulator].”**
To be fair Mr Ellis’ comments indicate he sees a need to balance the interests of the industry with the government’s responsibility to protect the environment. One can only hope that his concern for the environment isn’t eclipsed by Ministerial directives to the contrary.
The energy industry thought it had died and gone to heaven. The rest of us thought we’d just died…
…then my mind drifted back to Machiavelli’s The Prince (you knew I’d get back there eventually).
The Machiavellian Outcome
In Machiavellian terms Albertans live in a “hereditary principality”—the Prince’s family has ruled the population for over 40 years. Hereditary principalities are very stable provided the Prince doesn’t neglect long established institutions or fail to adapt his policies to major events.
And there’s the catch.
By enacting REDA the government shredded the checks and balances necessary to ensure that Alberta’s resources are developed with an eye to the public interest. Machiavelli would call this a “neglect of a long established institution”.
Furthermore the ferocious protests over oilsands development demonstrate an increased desire for environmentally sustainable resource development. Machiavelli would characterize this as a “major event” and would point out that appointing an industry insider to chair a corporate-style board that oversees a quasi-judicial regulator, creates less transparency not more, and is a “failure to adapt”.
If Machiavellian principles hold, the PCs are looking down the gun barrel of regime change. The next election will usher in a new prince who will (hopefully) review the lessons of the past and recognize that Albertans will no longer tolerate the “corporatization” of their government.
Let’s face it; it may be career suicide to cross a Minister, but it’s political suicide to cross Machiavelli.
*Daily Oil Bulletin June 17, 2013
**Responsible Energy Development Act, section 67
***Government News Release June 12, 2013
****Thanks to Jill Browne for pointing this out.
*****Huffington Post Online May 7, 2013