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Wednesday, March 05, 2008

Stelmach is Right the Environment Does Trump the Economy

There is a very interesting Calgary Herald story today “Tory Landslide Worries Oilpatch” noting the continued “uneasiness in the oilpatch and unhappiness with the Tory government” and what is being called “the big disconnect.” The oil patch need not worry - but is has some adapting to do with Stelmach acknowledging that the "environment trumps the economy."

There is indeed a BIG disconnected but it is not only between the energy elites in Calgary and the Stelmach government. It is also between the energy sector and the citizenry and their expectations of their government performing its responsibility as stewards of our natural resources and environment. The oilpatch is in the centre of all of these BIG disconnects. It has to look in the mirror and realize it does not own the oil and gas. They are only licensees from the Alberta public, the real owners of the assets. The energy sector’s access license to operate is one thing but it also carries a duty of a social license to operate too. The former does not transfer ownership and the latter duty is a delegated responsibility to serve the common good – as well as shareholder interests. Jobs are only part of the social license duty. Using the best available environmental practices and technologies, and timely and effective reclamation, protection of wildlife habitat and being a good neighbor in the communities where they operate are other elements of a social license obligation on private enterprise.

There is a philosophical reluctance in conservative governments towards interfering in the marketplace. It is a philosophy I share. We know it does not work, and hence the “not touching the brakes” comments of Premier Stelmach.

We have lost billions of taxpayer’s dollars in the Getty era through government intervention in private enterprise, trying to pick winners and losers. The need for private enterprise to have as much certainty as possible is a responsibility of good government too.

However, uncertainty takes many forms, from interest rates, commodity prices, exchange rates, economic cycles, geo-political events, competition for materials and manpower, inflation, skills shortages are just some of the uncertainty influences at play in the Alberta economy. Royalty rates are a minor influence overall and they are being overplayed in the larger scheme of things.

Not touching the brakes does not mean retreating from setting and collecting a fair economic rent for non-renewable royalties. It does not mean being lax on updating environmental and enforcing regulations on industry. I think successive Alberta governments have lapsed into a resting on our laurels attitude about the environment. We were the first jurisdiction in Canada to originate a Department of the Environment…fine but are we still at the leading edge in terms of policy and practices for conservation of our water, land and air as well as biodiversity and habitat?

Are we the stewardship leaders we ought to be in areas like responsible and sustainable growth that not only protect the environment but actually enhances it as we grow and create wealth? No we are not…and there is no reason why we should not be other than where we put our attention and focus. As the home of the oil sands and the primary beneficiaries of that enormous and complex resource, I think there is an obligation upon Albertans to be environmental and ecological leaders.

Premier Stelmach also said “the environment trumps the economy” and he was right then too. When our government exercises its stewardship responsibility in serving that greater ecological responsibility with goals that stretch us and engage us, it will in fact impact our economy. Proper ecological stewardship by our government on our behalf may even “slow down” the growth or at least stretch out the development cycles so we can actually adjust and achieve the environmental advancements we need. These economic consequences will not be unintended and they can be planned. They will not be the result governments inappropriately interfering the in the marketplace. Rather it will be putting business and the marketplace in its proper perspective as in service of the needs of our society, and not the other way as seems to be the way it works presently.

These are some of the BIG disconnect challenges the Stelmach government faces but can address with its powerful mandate. I hope Premier Stelmach elevates the role and scope of the Department of the Environment and Sustainable Resource Development. It also must increase the accountability and effectiveness of the Department of Energy in meetings its responsibility as the regulator of the energy sector in Alberta. The overarching duty of the Department of Energy is to serve the benefit of Albertans now and future generations…not just be the advocate for the oil patch, as has been its wont.