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Monday, January 21, 2008

Poll Shows Stelmach is Strong but Darkening Clouds Exist

Alberta is all over the front pages and above the fold stories in the Globe and Mail. The Strategic Counsel poll is showing Premier Stelmach is doing much better in the minds of ordinary Albertans than with the energy industry C-suites in downtown Calgary. This is good news going into an election that will be called in about 2 weeks. I will do s specific post on this poll and

The Report on Business story is a bit more unsettling as it looks like the Alberta Minister of Energy is weakening on a strong stance on royalties with the Alberta oil and gas industry. The Stelmach government has to be careful to do any such review with the industry in public and not behind closed doors.

The Klein government had an all too cosy back room relationship with the energy industry and did not do a very good job of protecting the interests of the resource owners…ordinary Albertans.

Stelmach has recently instituted an all party legislative committee process. That is the proper place for the energy industry attend in public to make it case about the “unintended consequences” they are facing as a result of the royalty review decisions. The fundamental question is should the royalty rates which are rents, be used as a means to subsidize uneconomic high cost drilling and why shouldn’t the higher producing wells pay a higher royalty?

There is a difficult political situation around the trust level of Albertans have over how well their government has managed our natural resources and the growth in Alberta during the Klein years. Any hint of returning to the behind closed doors and back room deals between Alberta Energy and the industry on our resource management will come with a significant political cost to the Stelmach government.