Friday, December 07, 2007

Thoughts on Bitumen Upgrading and Electrical Deregulation

There is an Anonymous commenter who has been pressing me to comment on bitumen upgrading and electrical deregulation. Here as some preliminary thoughts on bitumen and deregulation…but only top of mind comments. The matters are very complex and they really need to be addressed in a more comprehensive and non-trivial way.

The lack of capacity today for sufficient Alberta-based bitumen upgrading is due to the former government’s indifference toward planning. That and the single minded determination to pay down the debt and deficit as fast as possible instead of sticking to the original 25 year repayment plan. That was the other major misjudgement. Those were the central themes in the leadership of Ralph Klein.

Now we are in a downstream mess of lost opportunities in value-added processing because Alberta's leadership went fishing and golfing instead of planning and designing for our future. We Albertans knew what was going on and we should have been insisting on our government investing in preparation of what was an obvious and inevitable set of circumstances. We may have the same dynamics afoot over our political passivity about climate change. That is much more serious situation that we have to get right and right away.

It is not all Ralph's fault. Albertans kept his personal polling numbers in the 70s all through this time. We tacitly approved of this lack of planning because we were intoxicated by the accelerated rate of debt reduction and the rapid pace of energy sector growth.

We Albertans were wilfully blind or not smart enough to consider the consequences and we failed to prepare for the inevitable implications. We failed ourselves as we chose instead to get caught in the shallow charismatics of personality politics. True Ralph kept his promise but he only really made one promise and we needed more.

Albertans should have been shifting our political demands and leadership expectation much earlier than April 2006. What we need now is to move towards a new pioneering style leadership. Now, more than ever, we need political leadership that is capable of creating a capacity for positive adaptive change so Alberta can be responsible, sustainable as well as resourceful (sic).

Alberta public opinion sustained, for far too long, a leadership style that did nothing to help us change our ways so we could respond appropriately to our obvious emerging needs. We have failed to move our focus fast enough towards optimizing our readiness to deal with our easily foreseeable future.

The electricity market in Alberta is the newest ideologically driven political oxymoron. It is based on the shortcomings of marketplace politicians. California, with the same population as Canada, was too small for an electricity free market to work effectively. We knew it or ought to have known it but foolishly we rushed in anyway.

The folly of Alberta's "free market experiment" in electricity deregulation was lead by the ideology of the likes of Steve West. That far right ideology was based in the unfailing belief that the marketplace is the best place to resolve of all the public's policy problems. A least the ones that are worth paying attention to in the first place.

This deregulation decision has harmed Alberta's economy and impaired the capacity of individuals to improve their living standards. Furthermore it has done nothing to protect or enhance the Alberta environment.

Any effective public policy today has to contribute positively to all three of these elements in an integrated way before it should be adopted.