Alberta is Now a Geo-Political Energy Focus

The recent news report of a meeting held in Houston about a year ago around increasing oils sands production in Alberta on a faster track with streamlined environmental processes has been interesting but mostly it has turned into a political farce.

The political attempts to frame the issue by the Harper Cons by trying to make Dion’s knowledge of this meeting or not is misdirection of the real issue here. It is not about something that trite. It has much more significant import and implications.

There is no doubt Alberta is now the centre of serious geo-political interest and concerns because of the oils sands. On the investment side we have Japan, France, USA and China all participating in projects now, with India showing interest as well. On the environmental side it is the lightening rod for GHG emissions and climate change issues.

On the security of supply for the USA in particular we are the closest, safest, more reliable and politically friendly source of fossil fuels they have. The market competition is getting heated too especially from China and India who are both in need of a secure supply of imported oil.

If the Americans ever cost out what they are actually spending in cash and lives or a barrel of Iraqi oil as opposed to saying the goal is to bring democracy to that nation, they will abandon to “struggle” sooner than later. We have Venezuela nationalizing its oil production and Russia destabilizing parts Europe and Central Asia with threats to cut off supplies to certain nations.

Now Israel is reported to be studying a kind of small surgical nuclear deployment on Iran, as if there were such a thing. The House of Saud in Saudi Arabia is not that secure politically either. Then we add terrorism taking place around the world and looking to emerge in North America. The world is a very complex place when you look at it in terms of the politics of energy.

Quiet, little, stable, safe, secure, close, open, eager and friendly Alberta all of a sudden looks pretty good to Uncle Sam. Alberta, along with Canada, would no doubt be glad to oblige and service more of the American energy demand. We have to ensure it is going to be in our best interests when we do this. That is what we better start getting our heads around…what exactly is in our best interest and how do we best serve it under mounting USA pressures to accelerate oil sands production?

We have pretty much botched the deal so far. We have insufficient production infrastructure like upgraders, refinery capacity, transmission power lines, roads and pipelines to handle the current oil sands production of 1 million barrels per day. We have failed refused or neglected to provide the necessary social and public infrastructure to meet the human needs like housing, health care, school, recreational services and cultural facilities for people working in this industry.

We have now turned most of the province into this same overheated economic engine that is about to blow a gasket given the pressure it is under. We have to provide a much better quality of life for people especially in places like Fort McMurray and Grande Prairie. That means making the investments needed and to take a more moderate, longer term and purposeful approach to the development of the oil sands.

We have talked loosely in Alberta about possibly ramping up oil sands production to 3 million barrels per day within the next decade. We have no sense yet of if we can, at what infrastructure cost and social costs never mind the unknown cumulative costs on the society and environment.

If the Houston talks was really about a target of 5 million barrel per day to meet American demand, we Albertans, our political, business, environmental a social leaders have some serious thinking to do. We have some big decisions to make and we better start planning to do right - and right now!

UPDATE: Finance Minister Flaherty is courting China as a market for oil sands. Dubya is not going to be amused.

Hancock is Staying the Course on Smoking Issues

Interesting news release from AADAC on the focus of National Non-Smoking Week.

The Stelmach government is much more open than the previous regime. Some challenges to be sure but so long as Ministers stick to commenting on their departmental areas, offering personal opinions and spending some "political capital" is a good thing to my mind.

We don't have to agree with the positions they take but it good to see what Cabinet Ministers are thinking on important policy issues and where they want to go with them before it all goes behind the closed Cabinet doors. If they get shot down in Cabinet so be it.

This is the more open political aproach and how I would like to see it operate. Not knowing what is going into a policy discussion/decision, what is going on about it and wondering if anything will ever come out of it does not help to inform the citizenry and give them confidence.

Hancock is being taken on by Ty Lund and Lloyd Snelgrove on the smoking ban idea for "talking out of turn.?" They may disagree with the position he takes but surely he ought to be able to say something about his personal positions on heath and wellness issues as the Minister responsible. A Minister would be out of line commenting publically on policy issue outside their portfolio area but that is not what is happening here.

Hancock says a smoking ban in public places will help prevent death and disease and reduce the costly demands on the health care system over time. Prevention and wellness have to be more than words if we are serious about health care reform.

Here is an excerpt from the Edmonton Journal story today on this:

Hancock said Thursday he offered his personal opinion on the issue when questioned this week by reporters, and he has no plans to keep quiet on important public policy issues. He also hopes to forbid tobacco sales in pharmacies and outlaw large smoking displays in stores.

"I'm not driving a personal agenda. I'm driving a government agenda," Hancock said. "You can't avoid talking about public issues in public, nor should you."

Works for me!

UPDATE JANUARY 20
Graham Thomson has perspective on all of this in his column today.

I see the Canadian Cancer Society is lining up behind Hancock on a smoking ban in public places too. See exceprts from their new release below:

Media Release
January 19, 2007
For immediate release
Canadian Cancer Society applauds Health Minister’s stance on smoking

Calgary… Premier Ed Stelmach’s change of heart on a provincial smoking ban came on the heels this week of Health Minister Dave Hancock’s pledge to make Alberta smoke-free. This could not have come at a better time -- January 21-27, 2007 is National Non-Smoking Week.

“Health Minister Hancock’s recent comments on pursuing strong provincial smoke-free legislation are welcome news to the Canadian Cancer Society,” says Dan Holinda, President/CEO of the Alberta/NWT Division of the Society. “We applaud the Stelmach government’s fresh approach to this issue and are behind them 110%. The new Tory leadership is taking the health of all Albertans seriously.”

Today, 10 Albertans will die as a result of tobacco, and this will happen every day this year. Tobacco use is the leading avoidable cause of disease, disability and premature death in Alberta, resulting in one in every five deaths. Second-hand smoke is responsible for 1,000 tobacco-related deaths annually across Canada.

One hundred percent smoke-free legislation will follow in the footsteps of the Premier’s pledge to improve the health of all Albertans and his welcoming of legislation on this issue reflects his desire for open and transparent government – a pillar he lead with during the race for Premier. If Albertans are interested in seeing the province become a smoke-free province, the Canadian Cancer Society urges them to write the Premier and show their support for a provincial smoking ban.

“Smoke-free legislation across Alberta will help protect all Albertans - not just minors and not just those lucky enough to live in cities whose council voted in favour of the health of their constituents,” says Holinda. “Banning powerwalls, or displays of tobacco products in such places as convenience stores and pharmacies, will help prevent youth from starting to smoke, and will also help prevent impulse-buying by smokers who are trying to quit.”

Evidence shows us that smoke-free legislation, restrictions on advertising and marketing of tobacco industry products, denormalizing the tobacco industry, higher tobacco taxes, and bans on where tobacco products can be sold are all a part of an approach that must be taken to reduce the burden tobacco places on the health of our communities and the healthcare system as a whole.

The Canadian Cancer Society is a national community-based organization of volunteers whose mission is to eradicate cancer and to enhance the quality of life of people living with cancer. When you want to know more about cancer, visit our website www.cancer.ca or call our toll-free, bilingual Cancer Information Service at 1 888 939-3333.

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For more information, please contact:
Lorie Boychuk – 403-541-5375
Canadian Cancer Society, AB/NWT Division office

Harper's New Green Con-version – Is it Environment Policy or Political Envy Driving the Conservative Eco-Agenda?

I am starting to wonder about the Harper Cons quick conversion to green. Is it the result of a real concern for the environment and a thoughtful purposeful reconsideration of an important public policy position? Or is it a just quick fix political response founded in fear and desperation and a large dose of green envy over Stephane Dion’s grasp of the issues.

Today Canada's Environment Minister, the Hon. John Baird spoke out and, according to media reports, appeared to do the usual Ottawa unilateralism with his disparaging and defensive comments on oil sands tax incentives in the news today. He says: "I cannot explain why the Liberal government of Mr. Dion made these changes," Baird said, speaking in French.

This is just altogether too cute because he is also trashing the Alberta government with these comments and he knows it - or at least he ought to know it. Doing it in French is the really cute part. Did he think Albertans would not hear about this if he only commented in French?

The tax incentive deals Baird is trashing was part a broader deal including more than just federal taxes. It was done in the mid 1990’s in collaboration with industry, Alberta’s PC government and the federal Liberals and covered royalties along with provincial and federal taxes.

This deal was done by the Chrétien government, and negotiated by Anne McLellan as Canada’s Minister of Natural Resources and Premier Ralph Klein and Syncrude’s Eric Newell. This is clearly not the “Dion government deal” as Baird tries to characterize it in the media today.

Premier Stelmach is widely known to be embarking on a royalty review of Alberta’s oil sands resources. But nowhere does Baird acknowledge this and suggest there nees to be come coordination and communications on this. He is trying to blame Dion for something that Dion was not any part of. Baird is ignoring, or worse, he is oblivious, to the impact of his actions and statements on Alberta’s energy sector and the Government of Alberta.

It would be nice if there was some evidence of a cooperative spirit between Progressive Conservative Alberta and Conservative Ottawa on this issue. But as Ralph Klein said last year “It doesn’t seem to matter who is in control in Ottawa, it is still Ottawa.” That reality was sure evident today.

Obviously it is timely to revisit the royalty and tax regime but industry needs certainty. An open honet porcess with a collaborative spirit from the two orders of government and input from the oil sands operaters is needed if this is going to work.

The Cons can obviously do what ever they want with the federal corporate taxes payable from oil sands extractors. But this tax review is not going to be at Dion’s expense. It is looking more like yet another Harper broken campaign promise akin to income trusts. Here is what Pierre Alvarez, the head of the Canadian Association of Petroleum Producers is reported to have said today about the Harper Cons oil sands tax review: “… (he) was puzzled by Baird's comments about the tax regime, noting Prime Minister Stephen Harper had insisted in December there would be no changes.” Ouch!

In the days the tax regime was set up we had with oil prices in the “teens” and oil sands production costs around $20 per barrel. The deal was predicated on industry doing some serious risk investing in oil sands development, committing $5B over the next 25 years in exchange for the royalty and tax deal.

Well we know what happened. In the 10 years following since the deal was done and how successful it was. In fact industry invested about $27B in the first 5 years of the deal and we have about $100B of oil sands related projects in the hopper that is running much of Canada’s economy today.

Pitbull Baird was keen to try on the rhetoric to trash Dion but he missed his target today. Instead he ended up chewing up his leader’s credibility - and mostly in Alberta - and particularly in Harper’s home town of Calgary. Not a bad day’s work if you are looking for a career change after the next election.

Yes Minister Baird was cute and clever today, but he was definitely not wise…and at so many levels.

UPDATE January 19, 2007
Interesting to see the Edmonton Journal Editorial Board and Paul Stanway of the Edmonton Sun being on the same page about this today.

The Grand Content

As we parse and prod our way along the paths of politics and pathos, we often get caught in the trap. The "seriousness of it all" trap from which only humour can release us. Props to Les Brost for one again opening the trap.

Here is the link to show PowerPoint at its best.

What is Stephen Harper Thinking?

Nicole Martel is asking why Stephen Harper is doing so much to alienate his base in western Canada. First the income trust betrayal and now he is looking at non-renewable energy revenues as part of the calculation for equalization payment calculations, as a pander to Quebec. Saskatchewan and Alberta are upset as is Newfoundland and Danny Williams is speaking in Fort McMurray on January 27th. I am sure he will have some choice words for Prime Minister Harper on equalization formulas.

Top that off with rumours of a $1.4 Billion payment to Quebec to restore the Harper Cons position there. It won’t hurt Jean Charest either, which is a good thing with his pending election.

Wasn’t it just this kind of pandering to Quebec politics that started the Reform Party in the first place? Wasn’t Stephen Harper around then?

Then the recent Globe and Mail poll done by The Strategic Counsel is being parsed in the media for its meaning with a plethora of preconceived notions. The fact that Dion is in a horse race with Harper so shortly after a leadership change and so close to Adscam is amazing. Harper has dropped from 49% to 41% support in the west in the year since the last election. He is down 10% in Quebec from 25% to 15%. In Ontario Harper is at 32% trailing Dion at 45%.

The next election is being touted as far off because the tight race between the major parties. Lets face it the next election will be called when Jack Layton decides he is ready because he has the votes to sustain or bury Harper. So we have to watch just how much and how fast the Greens are closing in on him too.

In Ontario the Greens are up to 9% and the NDP are down to 15% since the last election. Enough said! Jack Layton can hear the Birkenstock footsteps right behind him and they are getting louder. That trend will determine the next election based as much on Jack Layton’s fear factor over Elizabeth May’s Green Party emergence.

Old line Reform/Alliance types must be shaking their heads and asking themselves “Stephen – what are you doing?”