Hunter Royalty Review Reaction Shows Some in the Oil Patch Just Don't Get It!

What is it that some oil executives and certain investments brokers in the oil patch do not understand about the natural resources belonging to Albertans? Based on media reported comments in the past two days, since the release of the Hunter Royalty Review Report, it appears that some of them don't understand anything around that reality.


The Hunter Royalty Review Report evidence indicates oil industry types seem to think that they are the one who control and dictate the provincial energy resource policies...from top to bottom. From some of the Hunter Royalty Review Report findings, it looks like that has essentially been the way things have been operating in the oil patch with the Klein government apparently just going along with it. I hope the former Premier and his Ministers of Energy will be able to prove to Albertans that this is not - and has not - been the case.

Someone in the Calgary-centric energy investment community is also reported as saying in an
E-mail to clients entitled “Caracas on the Bow River” that if the Hunter Royalty Review Report "is enacted investment decision will be impacted." Duh! Isn't that is what this is all about? The impact is about the appropriate rents and rates Albertans should get from granting a social licence to oil companies to operate in OUR resource base and who is most appropriate to be trusted to develop those resources. This broker claims the Hunter Royalty Review Report “…reads a bit like a Chavez-style manifesto.” Boy is this attitude off base and out of touch with reality.

Then we have news reports of some energy CEOs meeting in London calling for a new National Energy Program demanding an increased federal role in their industry. Interesting timing in the face of a royalty review don't you think?


It was the NEP that killed the Liberals in Alberta 25 years ago and the myths remain. If that were to ever be seen as a possibility then Peter Lougheed’s predictions of a constitutional crisis that would make the old NEP look like a picnic would actually come to pass. Harper needs to win Quebec and not lose Alberta in the process. It is not going to be smart politics for Harper to be revisiting the NEP of Trudeau times especially since he is an old-style Reformer at heart. Stranger things have happened. Harper has flip-flopped before - think Income Trusts!

The oil and gas industry, the Alberta Department of Energy and past Energy Ministers since 1995 have a lot of explaining to do about how they calculated, accounted for and ensured the right royalties have been paid. That reassurance is something that needs to be done in addition to settling the question of how the rates should change and how much they should increase.

Perhaps the Auditor General Report on Royalties due in mid October will shed some more light on this or at worst point to more clouded mystery of perpetually poor accountability that needs to be fixed.

In any event this situation will either lead to Stelmach's finest hour as Premier or his final hour as Premier. Everything is at stake. Stepping up to the plate and hoping to hit a single will not cut it.


Stelmach has to step up to the plate and point to the fence and then swing for a home run. Nothing less will do. Hunter has given him a perfect pitch with this report. Over to you Ed - and here is a tip - keep you eye on the ball!


All eyes in Alberta are soon going to be watching the Premier. They ready to cheer or boo - depending on how well he deals with this. No pressure Ed...it is just about good government and appropriate politics.

Will Peter Lougheed's Comments Set the Alberta-Ottawa Agenda?

UPDATE: AUG 18 - I recommend you read Blogger and lawyer Robert Janes take on the implication of the Lougheed comments. His URL is http://rjmjanes.blogspot.com/2007/08/environment-clash-predicted.html

You have to love it (or be terrified depending on which side of the issue you are on) when a news story takes on a life of its own. Such is the case with the former Alberta Premier Peter Lougheed and the comments he made at the recent Canadian Bar Association earlier this week.

I promised on Wednesday to comment further on Mr. Lougheed’s speech once I had read it. I have requested a copy but have not read it because I can’t. His office replied to my request as follows: “Unfortunately a copy of the speech is not available as Mr. Lougheed delivered the speech by reference to his personal notes.”

Fair enough, he is a gifted speaker and very knowledgeable on the subject matter. He has commented on issues of the pace of oil sands development and the ecological and social impacts and implications before. His comments last Tuesday at the annual gathering of the Canadian Bar Association. I checked the CBA website and it does not even identify Mr. Lougheed as being on the program of their meetings in Calgary this past week. Hummm!

One can't help but wonder about the forum, timing and the motivation behind Mr. Lougheed's comments. For me, this initiative of Peter Lougheed is pure political theatre of the highest order, and I applaud it. His political instincts are as sharp as ever. You have to admire how he has skillfully and politically positioned issues, created an event and defined relationships in one carefully constructed stream of consciousness.

Even without a written text, one can conclude Mr. Lougheed’s remarks were not made as an aside nor were they impromptu. That has never been his method of operation. These remarks have to be his considered opinion and that opinion is foreboding and politically charged.

Already John Baird, the federal Environment Minister is in full damage control. When Lougheed says the emerging and inevitable fed-prov battle looming between Alberta and Canada “will be ten times greater than in the past.” Baird’s pull quote in the Edmonton Journal today says it all. “Our government would never do what was done with the national energy policy of the early 80’s.” Ouch!

While Lougheed is reported as “surmising” about such matters in his speech, everyone should realize that he is not unschooled in such matters. He was Alberta’s Premier in the days of the National Energy Policy, which is believed by many to be the sole source of the demise of Alberta’s economy and destruction of our emerging political clout in the 80’s.

So here we have, it one man with great influence and respect, making some significant personal observations at a forum where he appears not even to be on the program. Serendipity or opportunism? Does that matter? His comments focused on some of the most serious issues of the day. The rapid and pronounced media uptake with front page headlines of his warnings have resurrected past ghosts and bogeymen.

In one carefully considered trip to the podium Peter Lougheed has actually done more to set the future political agenda of Alberta and focus it around the critical relationship between the energy economy and emerging ecology issues. He has also done much to frame the politics on this policy concern in terms of good old Canadian jurisdictional wars between Alberta and Canada.

The major difference is that the constitutional and jurisdictional wars Lougheed sees this time has Ottawa controlled by Harper, a power controlling, centralizing Conservative. In Lougheed’s NEP wars he dealt with Pierre Trudeau, a centralizing and power controlling Liberal Prime Minister.

One wonders, based on reports of Lougheed’s comments this week, if he sees this change in leadership as a distinction without a difference when it comes to taking on Alberta...or is Ottawa just Ottawa where Alberta is concerned?