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The Sad, Timid Failure of Rachel Notley

Instead of change, Alberta’s first NDP premier brought the same old kowtowing to big oil.

Mitchell Anderson 11 Sep

Mitchell Anderson is a freelance writer based in Vancouver and a frequent contributor to The Tyee.

Imagine if you decided to sell your soul and no one wanted to buy it?

That seems to be the undignified position that Alberta Premier Rachel Notley finds herself in eight months away from electoral oblivion. In stark contrast to the reform-minded warrior swept to power three years ago, Notley has morphed into a fossil fuel sycophant, trumpeting the same industry wish list championed by the provincial Conservatives for 47 years — and soon to be advanced by premier Jason Kenney.

After abandoning promises of getting tough with the oil industry and ensuring Alberta’s resource wealth is processed locally to capture more employment and economic benefits, Notley has become an avatar of the late Ralph Klein, threatening to cut off oil to elsewhere in Canada and cancelling Alberta’s participation in the national carbon pricing plan. She also demanded that Ottawa restart negotiations with the First Nations who just won their legal challenge to the Trans Mountain pipeline, and that the case be immediately appealed the Supreme Court. Good faith, rule of law and tackling climate change be damned.

Has her genuflection to the petroleum sector cut any ice with Albertans? If opinion polls are to be believed, committed voters favour Kenney’s United Conservative Party almost two to one over the NDP.

While it is perhaps premature to perform a postmortem on the Notley government, there must be a growing realization within her caucus that meekly tweaking the knobs on the provincial economy after almost five decades of Conservative rule was a doomed governing strategy.

Albertans are entirely correct to believe they have been ripped off for decades on resource wealth. Since 1972 the province has produced over 17 billion barrels of conventional crude oil worth almost $1 trillion, assuming a price of $40 USD per barrel. (Alberta sweet crude was at over $80 in 2014.) Where did the money go?

Under our constitution this is Alberta’s oil, not Canada’s. For all the whining about western alienation, the fact is that successive Alberta governments have conjured the almost unimaginable alchemy of somehow converting $1 trillion in resource bounty (not even counting bitumen or natural gas) into $47 billion of provincial debt.

Notley now plays the same dog-eared card used by so many premiers before her — that this is somehow all the fault of Ottawa and the rest of the country. The oil barons of Texas must be clinking glasses of bourbon in celebration of how easy it was to divide and dupe such Canadian bumpkins.

Not even Ottawa ponying up $4.5 billion for a 65-year-old pipeline is apparently enough to balm imagined Albertan wounds. But does the province really need a mythical pipeline to tidewater to realize a better return for its resources in new markets? Such a pipeline has existed since the 1950s, the one bought from Kinder Morgan by the federal government. In spite of relentless and erroneous commentary to the contrary, 100 per cent of crude tanker exports from Vancouver over the last two years were bound for the U.S. — not Asia.

A larger pipeline will do nothing to increase the size of vessels that can squeeze through the narrow Second Narrows channel in Canada’s busiest port. The market has already decided that sending a partially filled, medium-sized tanker carrying low-value, high-sulfur diluted bitumen across the Pacific Ocean is a money loser, no matter what the average Alberta voter wants to believe.

What could Notley have done instead? For starters her government could have launched a publicly owned energy company by buying an existing corporation, and finally dealt itself a seat at the table. After the price crash in 2016, oil companies were a bargain, with droves of technical and management talent walking the streets of Calgary. Besides having a provincially owned company as a lucrative source of public revenue, how can the government credibly oversee such a complex industry without having a player on the field?

Notley also chose to strike a toothless royalty review panel, which arguably made a pathetically poor resource revenue system even worse. Her government instead should have scrapped the outdated colonial royalty system altogether and adopted something closer to the highly successful program in Norway that taxes profits, not production. Norway has over $1 trillion in its resource revenue fund and is still ranked higher than Alberta as a place for petroleum investment by none other than the Fraser Institute.

The Alberta Federation of Labour even invited former head of the Norwegian Petroleum Directorate Rolf Wiborg to address members during the last election. In this speech, Wiborg proclaimed his long affection for Alberta since doing his graduate work there in the 1970s, advised the province to implement reforms to follow Norway’s example and offered to help if he could.

Did Notley’s newly elected government reach out to Wiborg to help enact a strategy more bold than the meek failure soon to be rejected in the next election? Apparently not, and a golden opportunity for real change was wasted.

Canada does not have an oil infrastructure problem nearly as much as it has a political courage problem. Norway succeeded where Canada failed because they had the guts to do so. Alberta voters will seemingly soon vote for the same flavour of familiar capitulation they have known for almost half a century.

Canada remains the second wealthiest nation on Earth based on per capita resource endowment, just after Saudi Arabia. Our Achilles heel is the enduring indulgence that provinces alone manage those resources. Again and again regional governments are played at the negotiating table by more powerful adversaries threatening to take their capital elsewhere, including to neighbouring provinces. Canada plays as a team on the hockey rink. Why nowhere else?

With most conventional oil gone and the world needing to transition quickly to low carbon energy, Alberta’s opportunity to capitalize on a vast resource endowment has now slipped away, with apparently nothing learned. Must our remarkably fortunate country also remain a nation of rubes and soul-sellers? We can and should aim higher.  [Tyee]

Read more: Energy, Politics

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