It finally happened. Someone broke the free market and the NDP government has to fix it.
Weird, eh?
Albertans spent the last few weeks being whip-sawed between companies (Cenovus) who said the market was broken and companies (Imperial, Husky, Suncor) who said the market was just fine, thank you very much.
Cenovus wanted the government to mandate production cuts to increase oil prices. Imperial et al wanted the government to stay out of the market because they’d invested in refineries and upgraders in Alberta and have a built-in hedge against low oil prices. They can convert cheap oil into refined oil products. The lower the price, the better their profit margins.
Tonight, Notley announced a mandatory 8.7 per cent cut in production which will be adjusted as excess storage is drawn down. This measure is expected to increase oil prices and add $1.1 billion in government revenue.
Conservatives who rail against governments meddling in the free market and picking “winners” and “losers” are delighted with Notley’s plan, notwithstanding the fact that by their definition she’s turned Cenovus into a “winner” and Imperial, Husky and Suncor into “losers”. Progressives who are accustomed to being beaten up if the government so much as looks at the market sideways don’t know how to react.
Notley’s rationale
Why did Notley do it?
She set out her reasons as follows:
- Alberta companies can’t move their oil because government after government in Ottawa failed to build pipelines and the existing pipelines are full. Yes, past and present federal governments could have done a better job, but we shouldn’t let industry off the hook. Had producers built upgraders and refineries in Alberta decades ago they’d be making money now just like Imperial, Husky, and Suncor. Also, they’d have neutralized the concern that pipelines carrying bitumen aren’t as safe as conventional pipelines and at least one of Trans Mountain, Energy East or Northern Gateway may have been approved by now. The industry shares responsibility with the federal government when it comes to “you broke it, you fix it”.
- Record amounts of oil are being shipped by rail, but it’s not enough to reduce the glut in storage which is driving down prices. Alberta is getting around $10 a barrel; oil sold on the global market gets five times as much. True, but this doesn’t address the fact that oil is a global commodity and the price of oil is influenced by everything from OPEC cutting production, burgeoning North American shale, uncertainty in US-Chinese trade relations, slowing global growth, changes in interest rates, and traders fiddling around in financial markets trying to anticipate what’s going to happen next.
- The long term solution is building more pipelines, the short term solution is acquiring more locomotives and rail cars. Okay, but why is it the Alberta government’s (read: taxpayers) responsibility to pay for crude-by-rail? Cenovus signed three-year rail car deals to ship 100,000 bbl/day to the US Gulf coast. It’s already moving oil on CN from the Bruderheim Energy Terminal. Other companies could have done the same.
- We need an immediate solution, the government had two choices: (1) do nothing and let the free market sort itself out as Husky, Suncor and Imperial had urged, or (2) listen to Cenovus (and other advisors) and impose mandatory, industry-wide production cuts until the storage glut is reduced and prices rise. What’s interesting about the second alternative is three weeks ago Cenovus was NOT demanding mandatory industry-wide production cuts, it was satisfied with voluntary cuts. In its third-quarter update to investors it said it expected price differentials to ease in the coming months as North American refineries came back onstream after scheduled maintenance, oil-by-rail ramped up and Enbridge’s Line 3 Replacement project went into service. One wonders what happened between then and now to cause Cenovus to dramatically change its tune?
Given the lack of consensus in the industry, Notley reframed the issue. She said the government must do what’s best for the 4.3 million Albertans who own the resource. It has an obligation to get the “most value possible” and this means the imposition of mandatory production cuts.
To put all this into context, the Notley and Trudeau governments have offered what some would call “corporate welfare” to the tune of:
- $4.5 billion (expected to rise to $12 billion) to buy Trans Mountain and expand it once the necessary approvals come through
- $350 million in capital costs and $2.6 billion in operating costs over three years to buy locomotives and rail cars for crude-by-rail transportation
This is on top of federal changes to capital cost write-down rules which will give oil companies immediate relief and provincial incentives–$2.1 billion to the petrochemical upgrading sector and an additional $1 billion investment in the petrochemical feedstock infrastructure program—to fund diversification.
Never mind. Ms Soapbox understands why Notley did it. The role of government is to act in the best interests of its citizens, Notley went with a utilitarian solution choosing the alternative expected to produce the greatest good for the greatest number. At this point we need to trust her judgment and support her decision.
But let’s not stop there.
Bailing out an industry should come with strings attached.
No more whining
Given that Alberta taxpayers are investing in infrastructure and propping up the market for industry players who were too short-sighted to invest in upgrading in Alberta, we are entitled to expect something in return, starting with no more whining.
Corporations must put real muscle into reclamation, particularly cleaning up abandoned and orphaned wells, they must enthusiastically support the government’s climate change plan and be willing to pay higher taxes and royalties so Albertans get their fair share when the good times roll.
Furthermore, all those executives who will be able to deliver value to their shareholders thanks to the Alberta government’s intervention, should be happy to pay slightly higher personal income taxes than the rest of us. (The target compensation for Cenovus CEO, Alex Pourbaix, is $6.5 million, he can afford it).
One final point, the UCP and Alberta Party supported Notley’s decision. It would be nice if they revisited their belief that the private sector is more efficient than the public sector because if the free market messed up energy markets this badly, heaven help us if we let them privatize education and healthcare.
If we’ve learned anything from this experience it’s this: sometimes the invisible hand doesn’t have a clue.
Susan on the Soapbox 
Brilliant column!
YES!
Thanks Phil and Rocky!
Cons are hypocrites on a regular basis. On some days they worship on the altar of “free” enterprise/markets and blame the ND’s for interfering with the economy, and loved Ralph when he handed out mining project approvals for production like there was no tomorrow, and cheered the elimination of the Wheat Board. Then when the typical cycles of boom and bust trip up their zealous greed they switch religions and and support supply management of select agri-food industries like dairy, eggs and poultry meat and now oil. But hey what do you expect from the Used Car Party.
Douglas: So true.
Douglas, you’ve made a very important point. I would have loved to have been in the back rooms listening to Jason Kenney rationalize why he, the leader of the “free-market coalition” with the mission to revive the “conservative movement” here in Alberta and the nation had to support the NDP government’s decision to impose mandatory production cuts. Conservatives say the free market gets it right most of the time and in those few instances where the market is broken, government interference in the market is justified. The problem with that argument is in this case industry was divided, Cenovus said the market was broken, Imperial et al said it was not. So my question to Kenney is why did he choose to believe Cenovus and not Imperial. They can’t both be right. Notley’s decision was based on what’s best for Albertans (ie. $1.1 billion in resource revenue), what was Kenney’s decision based on?
It’s the usual procedure – privatize the profits but socialize the risks and the costs.
That is what the rich and powerful call Capitalism – it is no wonder we are on the verge of 2008 Sequel – with Donald Trump at the helm this could very well be the very last slump experience
Nice thinking. 100% agreed.
Susan: Again, I must thank you for another great column, that is full of facts. I still see many people blaming Rachel Notley and Justin Trudeau for not helping get a pipeline built, that went to the B.C coast. There are also people who are upset, and think we should have a refinery here, and that our oil should benefit Canada first. They are upset about the government wasting around $4.5 billion on buying the pipeline. Jason Kenney also said he supported the government purchasing the pipeline. He also said he supported the carbon tax. My question was why didn’t the CPC help get a pipeline built, that went to the B.C coast, when oil prices were greater, and they had a majority government? Jason Kenney was also part of that government. Also, the Alberta PCs did help get a refinery built. It was a petrochemical (bitumem) upgrader. The Alberta PCs, excluding Peter Lougheed, (who had oilfield experience, and knew oil was a volatile commodity), failed to grasp the fact that oil is a volatile commodity, and is subjective to price swings. They blew $35 billion on this petrochemical (bitumen) upgrader. It is a sinkhole of debt. It is unlikely that this will ever be paid off, due to oil prices remaining low since 2014. To me, that is far worse than the federal government spending $4.5 billion on the pipeline. The Alberta PCs, excluding their government that was run by Peter Lougheed, were really good at throwing millions and billions of dollars at corporate welfare, with a plethora of failed business ventures. I cannot see the UCP being any different. With oil prices, I do not see them rising to their high levels, prior to 2014. Not when Saudi Arabia keeps flooding the market with cheap oil, and the U.S has shale oil deposits. The Alberta oilsands can’t compete with these things. Furthermore, what many people don’t realize, is that building a pipeline will not make oil prices rise. There already is a pipeline thst goes to the B.C coast, and oil prices are still very low. Also, a past Conservative government in Canada, made it so that most of Canada’s oil has to go south, to America. Brian Mulroney’s Conservative government abolished the NEP. In the early 1980s, people were upset about the NEP, saying it was hurtful to Alberta and the West. Now, they seem to favour something like it. I also see comments on YouTube and letters to newspapers, in particular The Sun, which love to put down Rachel Notley and Justin Trudeau, for being ineffective on this pipeline file. I wrote a letter to The Sun, countering what people were saying in their letters, that were published on December 1, 2018. It explained some of the same things that I put in my response to this blog, like the CPC being negligent on the pipeline file, when they had greater oil prices and a majority government, and the Alberta PCs blowing $35 billion on that petrochemical (bitumen) upgrader. I doubt that it will be published, and if it is, it will be heavily edited, including omitting the major cost of the upgrader blunder, by the Alberta PCs. This is very interesting times we live in, and I hope this issue with the pipeline and all things related to it, can be resolved. I think Rachel Notley is right when she says that she must do what is right for the 4.3 million Albertans who own the resource. Peter Lougheed had the same attitude, unlike the other Alberta PC premiers, who thought oil companies should take Alberta for a ride, with accepting bad oil royalty rates, and not develop the resource in a more responsible way, etc. I think Rachel Notley is doing the best she can under difficult circumstances. She is very similar to Peter Lougheed. I can’t say the same about the UCP.
Thanks for your comments Dwayne. You raise an important point when you ask why the CPC didn’t get these pipelines built when they had the chance. It seems to me they (and the oil companies) made two stupid mistakes (1) they didn’t recognize that having only one customer, the US, was a huge mistake, and (2) they thought more pipelines into the US were such a good idea that no one would object to them. They seemed to think it would happen just because, to quote Jean-Luc Picard, they said “make it so”. I believe this is why Harper blew a gasket when Obama refused to issue the presidential permit for Keystone XL. Harper said it was a “no brainer” that this pipeline had to be built, but he couldn’t be bothered to make it easier for Obama to accept KXL by doing things like aligning Canada’s energy policies with Obama’s climate objectives, Had he done so that pipe would have been built by now. I’m not saying another pipeline to the US is the panacea, but I do believe all the people who blame Notley and Trudeau for failing to get pipelines built need to look in the mirror.
I absolutely agree with your last two sentences, Notley is very similar to Lougheed, and we can’t say the same about the UCP.
How about requiring the petroleum industry to reclaim and revegetate some of the 220 sq km of mine waste pits that have existed for 40 years, before approving new mines? Wouldn’t that slow down production and increase oil prices?
Excellent point Carl.
A little over a year ago (Oct. 15/2017) Graham Thompson wrote an article in the Edmonton journal about Kevin Taft’s then new book about Oil’s Deep State. Here is but one interesting quote from the article:
“Taft is not the first author to criticize Alberta for being a willing hostage to the oil industry, but he doesn’t call the province a petrostate. He calls it an “oil deep state”: “Petrostates are conceived in petroleum, while oil deep states are captured by petroleum.”
In other words, we had democracy in Alberta until we discovered oil.
Taft’s argument is exhaustively researched and presented with a confidence that will irritate his critics. And there will be plenty of those.”
Susan…I am not a conspiracy theorist. That is why, when I do decide to comment on one of your posts, I too prefer the “exhaustively researched and presented with confidence” facts-based (and circumstances) approach. This topic – the capture of at least three political parties in Alberta (UCP, Alberta Party, and now NDP) – is what I think everyone needs to address. We can address the media’s role in this captured state (Braid and Varcoe’s submissions to the deep state, post policy announcement) as well, but for now, I think every reader of your blog (and this comment section) needs to contemplate what people in the rest of Canada know about our province.
Your restatement of Notley’s reasons (and your cross-examination of her assumptions) as well as the “No More Whining” conclusion, while spot on in terms of analysis, does not speak to the fact that politics in our province is corrupted. The rest of the country knows this, and refuses to be captured as well (Mr. Harper’s lot being one of the best examples of the “puppeteering” of politicians by the Cenovus’ and CNRL’s).
Somehow the NDP got elected, and they had their chance to run the province in a way that did not perpetuate the “captured state” ethic that the Progressive Conservatives had evolved into. And as the next election looms, rather than truly standing up for all Albertans by putting Democracy first (Utilitarianism as a philosophical stance, shares little with democracy and much more with tyranny – despite the claim to “most benefit”), they too capitulated. The rest of Canada sees this, knows this, and will “squeeze” this province because “being captured” is anathema to being Canadian.
I loved your closing statement because I think it says even more than you intended: the “invisible hand” is now clearly in the open. It has a clue – self-interest – and it has its influencers at every political table in order to socialize costs, and capture profits regardless of who sits in the Premier’s chair. I don’t think it matters a lick whether the question of privatized vs. public is debated until we talk about the fact that certain companies in our province are infested deeply on both sides of the continuum. This is not a “too big to fail” question. It is a question around who “owns” the politics in the province. As long as the rest of the country recognizes what is happening, while people within the province ignore the core issue, we look like fools.
“does not speak to the fact that politics in our province is corrupted. The rest of the country knows this, and refuses to be captured as well”
Ontario may not be ‘captured’ by petroleum interests but their democratic process seems to be captured by climate deniers and short term profits for the rich. B.C. elects a NDP govt and approves the Site C dam. Trudeau rejects electoral reform and buys a 65 year old pipeline etc. That’s my short list of democracy for public benefits vs. profit driven multinational corporations.
Carl, let’s take the two jurisdictions you have chosen to hold up as comparisons: B.C. and Ontario. Here is a breakdown of the party’s in power from 1968 forward in each province: BC – Social Credit, NDP, SC, NDP, Liberal, NDP coalition. For Ontario: Conservative, Liberal, NDP, Conservative, Liberal, Conservative. Now Alberta, for the last 47 years: Progressive Conservative, NDP.
The current parties’ in power will always have voters who put them in office. But based on this historical evidence, it would appear that the “majority,” shifts, in other jurisdictions outside of Alberta. Again, not here is debate if there are privatized interests protecting their profits across Canada. I am stating clearly (and the historical facts confirm this) that what are “normal” shifts in the rest of the country, are non-existent (relatively speaking) here. That should be a flag. Kevin Taft labelled this a “capture” and did a brilliant job of backing his claim up with facts. I’ve put a few more here. Time to look at the real problem.
DHT and Carl: I understand the argument that Alberta has been held hostage by the oil and gas industry for decades and many people had hoped Notley’s NDP government would break us free. Where I struggle with this argument is the underlying assumption that she should have done so in her first term in office. It seems to me she focused on strengthening public services while at the same time trying not to alienate the industry which a major source of revenue to fund such services. I believe her government is sincere in its desire to transition the province out of fossil fuels but she knows it will take time to get enough Albertans (voters) on side to accomplish that. It took us 40 years to get into this mess, it will take us more than 4 to get out.
So much for non-partisan political partnerships working in Alberta’s best interests.
Already, Jason Kenney, who favoured the idea of mandatory restrictions on oil production along with Notley, has lashed out at her government for not restricting oil production by 400,000 BBL/day vs 325,000 BBL/day and for not making the cut-off point for small producers 25,000 BBL/day vs 10,000 BBL/day. Kenney’s rancor also includes falsely claiming that Notley has been played by Justin Trudeau on carbon pricing, putting a cap on oilsands emissions and the phasing out of coal. And for added amusement, I’ll just leave this quote here from Kenney and company from yesterday’s UCP news release, “I appreciate that in this instance, the government was willing to listen advice (sic) from the UCP, as well industry (sic) and experts.”
This tells you exactly what kind of premier Kenney would be—polarizing and divisive immediately come to mind. Kenney needs to learn how to spell “humility” before he’s worthy of earning political gravitas from Albertans.
All I can say to your comment J.E., is that choosing “Kenny and company” as your target of choice, simply verifies the kind of “misdirection” in thinking/acting happening around what is actually our “captured” province. There are sides to every debate, but when both sides are being “pulled” by the same infiltrating masters, then differences in cutback totals are like jingling keys. Rachel IS now, NOT the lessor of two evils. Rachel had three years to completely distance herself from “business as usual.” She made some moves that signalled a shift, but then co-opted the market with her social licence strategy. Dependency on resource royalties is our kryptonite. The rest of Canada saw right through this, and acts as a containment force. All the tv ads about the benefits to all Canadians falls on cynical (rightfully) ears. Until Kenny, Mandel, and now Notley, can grow a set, and speak publicly about how corrupted things have become (maybe this is the “Humility” of which you speak), which includes their role in that coming about, all the finger pointing is puerile (sorry).
I agree with you DHT in terms of Rachel Notley and she is just as captured by oil interests as the PCs were. We refuse to take the hard road and sacrifice for a better future and so we are paying the price ahead of time. This is just the tip of the iceberg, wait until someone cares for the garbage these oil companies leave to us as a gift. Does anyone actually believe they will deal with it?
DHT Rachel Notley is the lesser of the two evils. Jason Kenney has a poor track record. It is foolish to think otherwise.
J.E. I agree with you. It took Kenney a while to come around to supporting mandatory restrictions on production. He started with “let the market sort itself out”, then moved to voluntary restrictions (if the industry moved in concert it would have violated competition laws so that was a nonstarter) and finally came up with his plan to implement cuts which would have required him to take a private members bill to the Legislature to amend the Mines and Minerals Act to define “crude bitumen as petroleum”. Notley’s plan was simple and effective. She’s allowing the cuts to be administered by the Alberta Energy Regulator under the existing Responsible Energy Development Act. She didn’t need any additional fanfare to get this done.
Seems to me Kenney is miffed that Notley pulled this off and that’s why he’s quibbling with Notley’s numbers. If Kenney’s numbers are better for the industry as a whole than Notley’s numbers then he owes it to us to tell us why, failing which he should drop it.
Frankly, Kenney would be a disaster for Alberta not only because he has no heart when it comes to social policies but because he has no brains when it comes to economic policies. My friends in the industry are much more impressed with Notley’s leadership than Kenney’s leadership, and that’s saying something here in conservative Alberta where people tend to vote for the party label more than its leader.
DHT and Carlos, I understand where you’re coming from but I don’t see how Notley doing what you suggest in her first term in office would have changed things. If she’d been more aggressive in pushing forward a different agenda, she wouldn’t stand a chance in 2019 and Kenney would simply change it all back (in fact that’s his platform now) .
I had a boss once who said you play the cards you’re dealt. We’ve been dealt Notley or Kenney, there is no other political party or leader who is even on the radar so I’m with Dwayne and J.E. on this one. I will support Notley and hope she gets another term to continue her effort to wean us off fossil fuels, and build a more sustainable fiscal framework (ie sales tax, progressive taxes, a stamp tax on transactions, etc).
There are a number of delusions or rationalizations Conservatives have made to advocate for production cuts and the biggest one is that the Federal government somehow created the problem. Anyone who seriously scrutinizes this will realize it does not stand up.
First of all, the Federal government did not cancel either the Energy East Project or the Trans Mountain pipeline. The former was probably done in by the revival of the Keystone XL project, which made it somewhat redundant and the latter by court challenges – the Federal government can not just make those challenges go away or over ride them. I suppose the closest case one could argue is that the previous Federal Conservative government made things worse by its fiddling with and disdain for environmental regulations, but both Elvis and Stephen have already left the building but it is much easier for Conservatives to be mad at Trudeau than Harper. If anything, the real problem lies in the US with an excess of shale oil production clogging up pipelines and with the Keystone XL and Enbridge pipelines both facing delays also due to court challenges and environmental concerns (sound familiar?), but of course there is no potential political benefit for Canadian Conservatives to blame the US, rather than our Federal government.
Second, the energy industry did not handle things well and has a role in this crisis too. In the rush to expand oil sands production, everyone seems to have ASSUMED pipeline expansions would happen within a certain time frame, whether that was realistic or not. It is not the 1950’s any more and governments can not just role over everyone who has concerns about new pipelines or expansions of existing ones. Maybe some in Alberta live in a time warp bubble, but in the rest of the world there is also a real and growing concern about environmental issues, including climate change. It also would probably would have been easier to sell the Trans Mountain pipeline to BC if it was transporting refined crude, due to concerns about spills. Oh yes, but some say it is too expensive to refine in Alberta. However, those companies that are integrated are doing fine even with the current surplus of bitumen, it is those companies that do not have refining capacity that are hurting now. Lesson learned? probably not.
I suppose Conservatives will continue to spin their fairy tales about how this is all the current Federal governments fault, as that is most politically convenient for them. Perhaps if that is what it takes to get them to go along with the production cut, maybe we will end up humoring them this time. However, the reality is we ended up in this situation due to the actions or in actions of many parties, including industry, the US and the previous Federal Conservative government too.
David, I agree with everything you’ve said here. Sadly the desire to blame the Trudeau Liberals is so pervasive that even Notley is doing it. When she announced her plan to impose mandatory cuts she started by saying the lack of pipelines was the fault of government after government in Ottawa. She’s scathing in her comments about the Liberals’ lack of focus on the issue. While I agree that it took the Liberals far too long to understand how serious a problem the lack of pipelines is not just for Alberta but for Canada, I don’t think we gain much by joining the blame game. I had an opportunity to discuss this with a federal liberal politician recently, he said it’s all about politics, she says it because it would be political suicide to say anything else. He’s probably right.
Susan I have to say I don’t totally understand all the factors regarding the “price of oil”. I do get a sense of the power of oil corporations, and their influence on governments. It seems to be such an arbitrary and/or controlled commodity. And then there are these mysterious players like OPEC, who for some reason determine whether economies rise or fall.
You asked the question about Notley, “Why did she do it?” (regarding her mandating production cuts “free market” oil companies). I’ll tell you why she did it. Because she said (I’m not quoting directly) we can’t keep our schools and hospitals, other public services and infrastructure operating without this income. Albertans have very definite expectations of what they want for themselves, their kids, their old folks. Where is the money supposed to come from?
We have to agree that in Alberta we have been a one-trick pony regarding oil for awhile now. We have enjoyed lots of benefits from it, but the chickens have come home to roost.
In a short government term Notley and her government have worked tirelessly trying to diversify our economy, move the “agenda” towards the well-being of every day citizens- not just corporations, and actually deal with climate change through carbon taxes and energy rebate programs, plus protect very sensitive environmental areas, which most people probably don’t know about.
Honestly, I don’t know sometimes how Notley and her government are doing it all, but am sure glad they are.
Elaine, you’ve nailed it. If there’s one thing we learned from the industry’s call for mandatory production cuts it’s this: Alberta’s oil industry is much more fragile than we imagined. Cenovus’s Q3 report to its shareholders and investors acknowledged widening differentials but implied it wasn’t a concern because the differentials would narrow in the next few months as US refineries came back on stream and oil by rail took off. Less than 2 weeks later Cenovus was all over the media calling it a crisis and demanding mandatory production cuts. The fact the industry would even ask for mandatory cuts shows you how dire the situation had become in a very short space of time. This tells me we’re living on a knife edge here in Alberta and the sooner we diversify our economy the better.
Susan: The amount of fiction that is written in the letters to the Edmonton Sun is staggering. With this particular topic about the pipeline, there are plenty of misinformed people. My letter has not been published. I don’t know if it will be. Not a surprise.
Dwayne, I suspect even if you were published in the Edmonton Sun, the Sun’s readers would dismiss your letter as “fake news”. They’re not exactly the sharpest knives in the drawer, are they.
Susan: Most of the letter writers to the Edmonton (and Calgary) Sun are in a world of their own. You would never hear them talking about the gargantuan scandals by the Conservative parties. They seem to act like nothing ever was wrong.
Cenovus being favored ahead of the others should come as no surprise , they were on stage with her when she announced the carbon tax for Alberta ,
Rock Blake Steven: that’s true, but Suncor was on stage with Notley as well. He said he was optimistic about the plan and thought it was a “game changer”. I think at the end of the day, Notley decided it would be more beneficial to the economy to help Cenovus and CNRL than Suncor, Husky and Imperial who are still making money, just not as much as they would have had the price differential continued to widen.
For 3½ years, the NDP has given Alberta clean, honest, good governance, bringing forth moderate, common-sense changes to improve the lives of ordinary working families. Let’s list some of them: consumer protections for both those in the most straitened of circumstances (payday loan regulations) to the true middle class (stronger new home buyer protections, & bringing the motor vehicle sales business watchdog into the public sphere); modest increase in AISH benefits, and the higher minimum wage; better protections for injured workers, stronger measures to prevent workplace injuries, and extending workplace safety protections to agriculture industry workers; better working conditions and protections for non-unionized workers; protections for victims of domestic violence who need to leave their homes for their own safety and that of their children; investments in evidence-based approaches to rural crime; and so much more.
Despite the irrational ranting of the alt-right UCP and its fellow travellers, they have not been “socialist”. They didn’t de-privatize or re-regulate electricity or natural gas utilities; they didn’t nationalize (or should that be “provincialize”?) the oilpatch or set up a new oil & gas crown corporation, like an “AltaPetro”. Sure, they haven’t privatized ATB, the “people’s bank”, but then, neither did the PCs before them.
The price they paid to do all of this, was to also adopt a common-sense, moderate, pragmatic approach to the oil & gas industry and climate change. There was no wholesale halt to oil & gas exploration and extraction, which is what the Greens would have done; but they are closing coal-fired power generation plants and they did bring in a modest, market-based incentive to reduce energy use. They have also demonstrated their full-throated support for Alberta working families by continuing to support getting oilsands product to non-US markets.
They’ve been assailed by environmental absolutists for this, and assailed by the Cons for the carbon tax. Sadly, it is highly likely that this is an area where perfect is the enemy of good, and so they will probably be swept out of office next Spring as a result, leaving the climate-change denying, anti-every-lifestyle-except-straight, hard core Conservatives to undo virtually everything they have accomplished in a few short years. Had the environmental absolutists been more open to listening to what Ms Notley et. al. had to say about oil and pipelines, maybe TMX might have gotten built, or at least well under way, and we’d see a different result at the next election.
Be careful what you wish for… you just might get it.
Jerrymcgp. I’m going to frame this comment! Thank you!
Jerrymacgp enjoyed reading your comment but I remind you that had not been for what you call environmental absolutists, you would probably be now showered with acid rain, would be way more prone to skin cancer due to the whole in the ozone layer, would not be enjoying wales in the oceans and much more. It is thanks to these absolutists that we have managed to get very little done for our environment. Many of them have gone to jail and have worked countless hours to get what little we have been able to save so that we have a chance for recovery in the future.
Nothing gets changed in our society without the absolutists. Moderates achieve nothing. They just talk and talk about an issue until the absolutists force the changes. Why do you think politics is now moving to extremes?
Susan, I am afraid that describing Cenovus’ (and a couple of other players) deep state influence in our provincial politics as “hostage taking” is simply more misdirection (jingle, jingle…that HT metaphor is something that many simply dismiss, as they know this is literally not the case…it is worse…the captives are cooperators). And although one could claim that Ms. Notley’s decision is “pragmatic” (either politically or philosophically) I think the internally integrated oil companies in this province (as Cenovus has refining capacity in the U.S.) would question your assumptions. I don’t think the others would like to be labelled hostage takers (and I am not even defending them).
Your point that people cannot get elected in this province if they fail to pledge fealty to the actual company(s) that own the UCP, AB Party, and now NDP, is rather interesting. The NDP did not get voted in to be a “corrupt lite” version of the 44 year reign of political decision making that actually took place (and appears to be still taking place) at The Bow in Downtown Calgary. And Mr. Taft who I never knew personally, certainly did seem to possess integrity when it came to calling out corruption of good old Mr. Klein. Yes, Mr. Taft is not in office today, but Rachel was/is and is the leader of the majority, and if she was going to get kicked out after fours years, at least getting kicked out for making decisions based on integrity, would be more ethically defensible than “re-elect our version of corrupt-lite over full corrupt.”
Again, a pragmatist understands that in politics you don’t get everything that you want – unless you want everything …then you have people inserted and influencing the policy of all “electable” parties. Of course, a pragmatist also understands that that condition is only one thing: a form of tyranny.
In this case decision, there were a number of factors leading to the supply surplus and the price discount for a barrel of bitumen. But rest assured, Cenovus shareholders will always benefit more than the citizens of this province, regardless. Again, a pragmatist recognizes the options available, but when all options have been weighted to favour a couple of very deeply embedded interests, there really are no choices. In fact, that is kind of what Rachel told us. (again…sorry)
DHT I don’t believe the NDP got elected by pledging fealty to anyone, in fact a number of NDP insiders have told me they expected to grow their numbers and become a stronger opposition but never expected to become a majority government.
I agree with Jerreymcgp that they’ve done a remarkable job and that in this case “perfect is the enemy of good”.
Having said that it’s good to hear your views. We need to keep this conversation going.
A closing comment:
In everything I posted here, the term “now” was applied to the NDP as a party now willingly captured. The election results were surprising, and eventually a form of fealty WAS pledged masked as utilitarian reasoning. This is a fact further proven out by the results of the first minister’s meeting as reported in the Globe and Mail, where Rachael wanted to blame everyone but Cenovus for the “price crisis”.
Secondly, as is the wont of some, use of the colloquialism “perfect is the enemy of good” is an interesting application in this forum, where historically, certain political perspectives are constantly vilified. For example, I’ve pointed out the sense that “accusations of guilt without due process,” is not something that points to the capacity within every individual to carry with them both good, and not so good qualities. Yes, nobody is perfect, and only certain political personalities get a repeated reminder of this human nature here. And at the same time, politics scored with pluses and minus’ ONLY works when “capitulating to pressure from highly vested interests” is NOT part of the facts set.
I’m glad that my comments are appreciated. Unfortunately, I am not in agreement with Carlos that absolutist positions are the catalysts for progress, any more than I am prepared to accept Jerrymacgp”s alert around “wishful thinking” resignation: that Alberta can never get past itself because all it WANTS are a few bad choices from which to elect our representatives. This “being in the political middle” is a problem for people like me, who have SOME bottom lines – especially around corruption. We don’t make friends who either can’t, or won’t, step up and lead when tough calls have to be made FOR democracy – and not just the capricious self interests du jour.
I’m afraid that history will not look kindly on those who will accept weak/compromised principles in order to stay in power. And with that, I will try and find leaders who will call, Kenny, Mandel, and now Notley, what they are: willing captives.
DHT I am not sure what you tried to convey with your post but you do not have to consider to be unfortunate not to agree with me on the absolutist position. I do not expect people to agree with me, I am perfectly happy to just have an opportunity to discuss openly what I believe is the reality of our political system.
Yes I agree that I do vilify some political perspectives because I am of the left and I have been vilified, ridiculed and even ostracized most of my life. It is a defense mechanism to survive in the current so called democracy.
So the democracy you talk about, which I agree has to be defended, is in the eye of the beholder. For most people in Canada it means Liberalism and Conservatism. Everything else is excluded with the First Past the Post election system we use. I disagree with this system because my political views and those of many other Canadians are not represented in Parliament. The 2 major parties do not mind it at all.
Like you I agree that Kenney, Mandel and Notley are captive but I also believe that it is basically impossible in the current system NOT to be. This is why I believe that revolutions are needed to take us out of that rut. Moderates and centrists are not capable of changing that process, they just extend it. By the way revolution does not mean that we have to have wars – I just mean a great change that is usually carried out by people with some absolutist views – without it there is not enough inertia to make it successful.
The fact that the status quo politics is at the end of the rope is clear and the current governments are so captive that they cannot do much. Big Corps and the very wealthy love the status quo of course but revolution is on and it will become stronger.
https://www.cbc.ca/news/world/yellow-vest-protests-france-paris-tax-hikes-1.4938362
Canada will not be immune – it is just a matter of time – we are just too polite 🙂
Alberta’s oil industray may be on life suppport now but who knows what the picture is going to look like in a few years. I keep hearing how shale oil reserves in the US have been wildly overestimated. They may look good on paper but most of it is in small fields and not economical to drill. Meanwhile the five major shale oil basins are rapidly depleting.
https://srsroccoreport.com/top-u-s-shale-oil-fields-decline-rate-reaches-new-record-half-million-barrels-per-day/
So many great thoughts in all the posts that it becomes difficult to add any new thoughts to the discussion.
Personally I believe the market is a good tool but that is as far as I go. How we managed to make the markets the center of our lives and decision making is to me pathological. Constantly on radio and television we see the market levels and percentages and indexes and whatever else is very relevant to those on the decks of their yachts making more money a minute than anybody else makes in a lifetime. Somehow we learned to venerate that and make it acceptable and desirable.
Markets have always been broken. The idea that there is something fair or ethical about markets is only true for the winners and they are always the same. Interestingly enough they flourish in the so called Christian world. In the case of Stephen Harper somehow they were brain washed believing the market concept to have been given to us by God, whoever that is. We were lucky that apparently God spoke English and so we understand it very well.
According to the book ‘The thieves of Bay Street’, which by the way was never challenged, Canadians are robbed to the amount of 4 billion dollars a year by the financial services and people with close ties with the great market. It is astounding that we continue accepting it and make it the center of our economic system – is it any wonder that everything is now coming to a head at the same time? The most powerful politicians in the world are financed by these same people. We seem to now accept that this is the only way. We have been told over and over – there is no alternative – the invisible hand of the market decides for us. I would think the hand of the same God that told us about the markets.
AMEN – Endless growth is essential but Nature Bats Last 🙂
Another thoughtful piece that once again highlights the need to recognize that corporations do what they are meant to do – make profits for themselves and sharelholders and they operate under regulations that are imperfect, especially in serving the longterm public interest, including the ‘externalities’ such as climate chaos, environmental degradation and reclamation costs (NOT covered by industry and currently at roughly $260B). Jason Kenney declined comment when he learned of the shocking industry liability which, without adequate deposit, will likely fall to the public (as increasingly the Orphan Well funding now does).
David if the regulations are imperfect why are they not fixed? That is the important question. I have an answer but I would rather not repeat it again.
As far as the 260 billion I think that is a low number but it is for sure going to be our responsibility. Governments come and go and no one ever mentions what you politely refer to as deposits. If you take a close look at them I am sure you would call it something different.