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Danielle Smith’s $100-Million Gift to Oil Companies

She lobbied for it. Then as premier delivered. Big bucks for well cleanups that firms already were obligated to do.

David Climenhaga 10 Feb 2023Alberta Politics

David J. Climenhaga is an award-winning journalist, author, post-secondary teacher, poet and trade union communicator. He blogs at AlbertaPolitics.ca. Follow him on Twitter at @djclimenhaga.

The awful “RStar” scam is a done deal in Alberta. Which means multibillion-dollar oil corporations will have at least $100 million of their royalty payments forgiven to compensate them for cleaning up dirty old oil and gas wells they’re already legally obligated to clean up.

The old fixeroo for that dirty deal has been in place ever since Danielle Smith was chosen last year as leader of the United Conservative Party, and therefore as premier of Alberta, with a little help from $1.4 million in donations from some of her anonymous friends.

Less than a year ago Smith was employed as a lobbyist for the scheme.

So it isn’t hyperbole to say this, it’s a simple account of the facts. In her role as a lobbyist, Smith wrote a nice letter to then-energy minister Sonya Savage promoting the dubious scheme.

As soon as she was sworn in as premier, she wrote implementing a pilot for the scheme right into current Energy Minister Peter Guthrie’s mandate letter. He would, she instructed, “develop a pilot program to effectively incentivize reclamation of legacy oil and natural gas sites and enable future drilling.”

“You’ve got someone who was a paid lobbyist to promote this program,” Mount Royal University political scientist Duane Bratt told the Canadian Press wonderingly. “Then that paid lobbyist becomes premier and produces that same program she was lobbying for.”

Well, trust me, the UCP isn’t even mildly embarrassed by this. Nor are they embarrassed by the fact that the wells in question have been sitting around for 20 years or more with no effort to clean them up, instead of within the year and a half or less that’s normal in most jurisdictions.

So, short of not re-electing the UCP in May, or whenever, there’s nothing that will stop this ugly deal, which is sure to be made permanent over time, depriving Albertans of the returns they’re owed on their resources.

University of Calgary political scientist Lisa Young describes it as “raiding the kids’ piggy banks to give money to their rich uncle as a thank you for not burning the house down.” And since Alberta is a petrostate now utterly captured by the fossil fuel industry, even a victory by the Opposition NDP can’t be taken as a sure thing it will be gone.

The big surprise was when a report from one of Canada’s big chartered banks forcefully criticized the plan, which now that it’s moving toward implantation, has been given a nice boring bureaucratic name by the UCP — the Liability Management Incentive Program.

According to the Scotiabank report, Canadian Natural Resources, Cenovus Energy, Paramount Resources and Whitecap Resources are expected to benefit the most from the giveaway. “In their last quarterly reports, those companies recorded a combined net income of nearly $5 billion,” the Canadian Press noted.

However, the report warned, “while we see the potential for select companies to benefit from the program, we believe it has the potential to generate negative public sentiment toward the sector.”

Do you think? Again, though, the UCP doesn’t care about that. Smith is as confident as ever she can talk her way out of anything. “We have to try something different,” she cheekily told a reporter in a news conference, omitting to mention that the Alberta government has never tried to enforce the industry’s clean-up obligations.

The Scotiabank report authors continued: “Moreover, we also believe the program goes against the core capitalist principle that private companies should take full responsibility for the liabilities they willingly accept.”

Now that’s something different!

There are those, of course, who might be justifiably skeptical that taking responsibility is a core principal of capitalism, at least when liabilities extend to the environment.

As Karl Marx not so famously said of capital’s relationship to agriculture, and could as easily be said of resource extraction, “all progress in capitalistic agriculture is a progress in the art, not only of robbing the labourer, but of robbing the soil; all progress in increasing the fertility of the soil for a given time, is a progress towards ruining the lasting sources of that fertility.”

But this is 2023. Who cares what some old guy thought in 1867?  [Tyee]

Read more: Energy, Politics, Environment

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