Please Premier Stelmach - Do Not Delegate Royalty Issue to Energy or Finance

The news out of Banff today reasonable notes that Premier Stelmach says the oil industry representatives will be able to take their issues with the Royalty Review Report up with the Finance Minister and the Minister of Energy.

Then Stelmach says “… the two Ministers will bring that forward to caucus.” It is the latter comment that scares me.

It would be prudent for the Premier to be personally in on any and all meetings with the oil industry. He needs to hear first hand what they have to say. It would also be appropriate for the details of the oil industry problems and presentation materials to be released publicly too…ideally in advance so the resource owners can know what the industry has problems with and why.

This is not the stuff of deal making behind closed doors, In fact as a show of good faith it would behove the oil industry representatives to go a step further and act as if the Lobbyists Act was already in force and make every effort to voluntarily comply over their issues.

There are indications in the Royalty Review Report that the Department of Energy had difficulty being forthcoming with the Review Panel because their data was seen as unreliable. The Royalty Review Report is reported as saying the Department of Energy is in a difficult conflict position because it wears so many hats. For those reasons alone it would be advisable for the Premier to keep control over this file and not delegate it to Energy but keep them involved.

As for delegating it to Finance that too would be a mistake. One has to merely remember the current Minister was once kicked out of the PC Caucus for making up stories about knowing where there were alleged "skeletons." Has he even kept his promise to disclose his leadership campaign contributions – and it has been 10 months. The Premier would be legitimately cautious about the credibility of any briefing from that Minister about such a critical aspect of Alberta’s future.

I hope you proceed with caution Mr. Premier and hear out the industry concerns. They better are based on facts supported by current evidence and not on a 1997 report like in the earlier presentations of some industry submissions to the Royalty Review Panel.

And please Mr. Premier, what ever you do, get your information on this critical issue first hand.

Whose Oil Is it Anyway?

I have been harping on Albertans to read the recently released Royalty Review Report for 2 days now. Here is the link to make it easier.

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.

C.D. Howe Institute Ranks the Best and Worst Elementary Schools in Alberta

The C.D. Howe Institute has just released a report on the ranking of the Best and Worst of the 2,240 Elementary schools in Alberta. This review and ranking actually takes into consideration the socio-economic aspects of the individual schools environment.

Rankings are always difficult to do and often mislead as much as they enlighten. In something as complicated and varied as elementary schools in a diverse province like Alberta those ranking problems tend to get amplified.

As Alberta Teachers Association President, Frank Bruseker, has oft said of other school rankings, they essentially measure the house prices in the neighbourhoods where the schools are located. That is a powerful way to say school performance is very strongly influenced by the socio-economic realties of the local neighbourhoods.

Full disclosure, I am a Member of the C.D. Howe Institute so I have a bias in fabour of their work. That notwithstanding, this review and ranking report on Alberta Elementary Schools is worth a serious read.

Does EUB Spying, Muncipal Funding Fiasco and Royalty Rates Review Mean Trouble and Turmoil in Alberta?

Boy what a week – Quebec by-elections, real threats of recession in the States, a run on a British Bank, the US dollar in meltdown and then we have Alberta’s governance in turmoil in the face of a municipal funding fiasco, two damning reports on EUB and spying and the recent Royalty Review report just released.

MUNICIPAL INFRASTRUCTURE FUNDING FIASCO:
There is plenty of consternation in the Edmonton region over the municipal funding for infrastructure. I have had my ear bent by a number of Edmonton politicians and officials on how unfair and damaging this funding approach will be to stability in the Capital City and the surrounding region. I need time to read and reflect on what happened and how it happened and to better understand the implications. Expect the City of Edmonton to take on the Stelmach government and all the other local regional governments surrounding the city. This political and governance turmoil is at play now because of the obvious unfairness of this municipal infrastructure funding model. Edmonton now has a central municipal election issue that will heat up significantly over the next month. Stelmach needs rural support and one of the major cities to retain power. He will not retrieve anything in Calgary and risks losing all of Edmonton with this municipal infrastructure funding formula.

EUB PLAYS "I SPY WITH MY PRIVATE EYE:"
I want to post on the EUB private investigator issues but need to find the time to read the two reports. The political responses to the reports are important and need comment. My sense is the government is under reacting and the opposition is over reacting. The implication for how citizens are treated by such agencies boards and commissions is critical and the security and protection of public officials is equally important. This is not about a trade-off of competing values. It is about what is a reasonable and responsible exercise of judgment and authority by public officials. More to come later.

ROYALTY REVIEW REPORT COULD AND SHOULD ENERGIZE THE STELMACH GOVERNMENT:
The Royalty Review is even more vital to the future of Alberta economically and politically. This report needs a thorough read and study. The importance of this report and the political, industry and citizen reaction cannot be over stated. It is foundational to the future of Alberta and not just the rates and payments. It is just as important to consider in terms of the relationship and roles of the development and management of this public-owned resource. How is the public’s government to behave as proxy for the citizenry? How is the oil and gas industry doing in the execution of its responsibility? How does it fulfil its various societal outcomes, ecological integrity and sustainable economic duties within the social license to operate responsibly and sustainably in this non-renewable energy resource sector?

IT IS TIME FOR CITIZENS TO READ AND REFLECT AND TO BE RESPONSIVE
Again I need time to read and reflect and respond to the reports and their recommendations. I encourage anyone who takes their citizenship seriously to read and reflect on these reports and to let their MLAs know what they think about the implications and impacts in each case. These reports identify issues that are all too critical to leave to politicians, government administrations, appointed agencies and industry self-interests to deal with alone.