I am interested in pragmatic pluralist politics, citizen participation, protecting democracy and exploring a full range of public policy issues from an Albertan perspective.
Sunday, September 30, 2007
Neil Waugh and I Agree on EnCana's Bullying Over Royalties
Stelmach said he would not be intimidated by Big Oil. Encana should have listened.
This is twice Neil and I are on the same page in less than a month this has happened.
I must check tonight to see if it is a blue moon. Something strange is happening…like maybe power is shifting back to the citizens of Alberta. Both Neil and I obviously see that as a good thing. I am sure we are not alone. It is our oil and we deserve a fair share.
The Stelmach government is our trustee to get this done for all Albertans now, and in the future.
EnCana Agrees with Premier Stelmach and Calls for "Cooler Heads"
Well, I agree, cooler heads and balance are good things and necessary under these circumstances. I suggest they, and the rest of the energy sector, consider that there is already balance in what is being proposed by the Royalty Review Panel for royalty and taxes.
The recommendations in the “Our Fair Share Royalty Report” are also the result of cooler heads…and some pretty competent and experienced head on good people too. They recommended a “balance” that would put Alberta just below the average for all other competitive oil and gas producer markets. How about reconsidering your strategy EnCana and considering that there already is a balance in the “Our Fair Share Report” recommendations?
Consider some other aspects that bring about balance in doing business in Alberta, like the “side benefits” of a stable government that is obviously somewhat incompetent – but it is not corrupt. That governance incompetence has played in your favour in the past too, don’t you think? You can’t ignore the sweetheart relationships the energy sector seems to have had with regulators but that is about to change - big time.
Then there is the minor advantage of an independent judiciary that is there to settle disputes using the Rule of Law. Then we have the helpful facts that Alberta has an abundant, healthy, young and skilled workforce and a pretty stable and strong currency. Those elements provide for some certainty in a risky business.
And the real kicker – we charge a mere 1% royalty until you recover all your cost – regardless of how outrageous they may be – and you even get to unilaterally decide what and who you will pay for such project costs. In fact you can even fix your own prices for bitumen between your producer side and your upgrader operations without any need to worry about how it might impact the owners of the resources.
Where else on the planet can you get that kind of certainty, a positive business environment and risk sharing for the energy sector with a such a vast amount of known deposits all in one place? The Middle East offers you the political benefits of Iraq, Iran and Saudi Arabia. Eastern Europe is a good place – if you don’t mind the political instability and the business “culture.” How about Africa or perhaps Russia is more attractive for you? They are well known entities for how they do business, if you don't mind kidnappings.
Don’t rule out the serious alternative of Hugo Chavez’s Venezuela is your first alternate choice to do business. Apparently some in your industry think Alberta and Venezuela have a lot in common so they must be a legitimate alternative. The USA is more expensive and past its peak and do you think Norway is going to treat you as well as Alberta’s 1% risk share royalty rate? Get serious!
Cooler head are definitely needed coupled with a big dose of realism and a serious focus on the bigger picture. That bigger picture includes all of us Albertans and people all over Canada actually. So when you think about balance don’t just think about benefiting yourselves. Also think about how well you have been meeting your other legally required and oft ignored related duties and responsibilities. That also has to factor into what we define as balance.
A more considered and reflective analysis of what you could and should be doing to meet your obligations for restoration and reclamation of sites, roads and seismic lines in order to continue to justify your social license to operate as tenants in the public realm of Alberta’s non-renewable resources would be in order. Remember, the way you have been doing business means you actually cut down more trees than the entire Alberta forest industry.
Balance those elements into your equation as to balance and fairness too as you cool down and think seriously about how to move forward. It is time to start thinking about how you can adapt to get along better with Albertans as your partner as we work out this complex and critical issue together. Name calling, cheap shots and silly tactics and intimidations and unfounded allegations all must be a thing of the past or else they will backfire on you big time.
Saturday, September 29, 2007
EnCana Cash Flow up 55% to over $2.5B at June 2007
EnCana saber rattled this past week about reducing investment in Alberta by $1B in 2008 because of the “Our Fair Share” Royalty Review Report. Ironically the management at EnCana was telling a different story at a Peters and Co investor’s conference in Toronto a week earlier. Here is an EnCana quote from Mr. Graham president of EnCana's Foothills division in a September 11, 2007 National Post story:
Now I wonder how EnCana can square that circle of impressive performance in the face of low gas prices and higher operating costs already in place and accounted for in their impressive results with the sudden need to cut $1B from their 2008 capital budget a week later. Can this threat be interpreted in any other way except to say it is posturing and intimidation.
The Editorial Board of the Calgary Herald from a city that is smack dab in the eye of the Alberta economic storm, is the voice or reason and responsibility today too. Slowing down Alberta a bit is a necessity and the marketplace is doing it but that is no reason not to increase the citizens fair share of their resource revenues now too.
Could it be the drilling contractors woes outlined in their recent news release on the “Our Fair Share Royalty Review” are self induced and market driven and not really about possible government policy at all?
For the record it was someone at Peters and Co. who sent an email to their client’s in response to the “Our Fair Share Royalty Review” suggesting Alberta was like Venezuela. A comment that was kindly considered as “over the top.”
Harper on "Nation" - Quebec Style!
In the meantime I have neglected to post our regular op-ed for LaPresse in Montreal. We can see Dion is having his challenges in Quebec and Harper is trying to pander to soft nationalists…with some success I might add. So here is what we said about Steve’s musings in Australia a few weeks ago about Quebec and Canadian politics. Strange he didn’t say this at home!
La Presse septembre 2007 Ken Chapman and Satya Das
Only the insular deny the distinction of Quebec, and only extremists would posit that Quebec constitutes anything other than a distinct society within Canada.
Yet there is certain unease at Prime Minister Stephen Harper’s proclamation this month in Australia, regarding what he calls the Quebecois nation.
It is unprecedented that a Canadian prime minister would make such a reference in a foreign country. And it is all the more satisfying that it comes from an Albertan prime minister, given the unjustified reputation our province suffers as a hotbed of bigotry. Our Albertan and Canadian capacity for accommodation manifests itself in Harper’s affirmation of a societal reality. It is pleasing that this should come as Quebec itself is conducting a brave dialogue with citizens about accommodating its own minorities.
So why our unease? Because “nation” means different things in English and in French. One worries whether the Prime Minister leaves himself open to interpretations that may raise unrealistic expectations, particularly among Quebecois who might view Harper’s declaration as a prelude to sovereignty-association.
Consider what he said in the Australian parliament, in French:
« Le Canada est né en français, à Québec, il y aura 400 ans l’année prochaine, et cela se reflète jusqu’à ce jour par la présence des francophones et de la nation québécoise au sein de notre pays uni»
In English, in the presence of Australian Prime Minister John Howard, he also used the phrase « the Quebecois nation. »
There is an enormous gulf between the implications of the word, in the two languages. The French and English begin with the same core meaning, using “nation” as an evocation of shared culture, history and values; implying a certain homogeneity of experience.
Then comes the gulf. The French use of the word “nation” is more appropriately translated as the English word “polity.” Polity in English means a process of society organising itself into civil government, a political entity that evolves a constitution or charter or other codes of law to perpetuate its being. And within that there is an unspoken “next level” that such a nation must of course be the master of its own destiny.
Yet the English sense of the word nation, as in “the Quebecois nation” of Harper’s usage, is closer the word “people” as in “the Quebecois people.” It is understood as one might mean “the Latino people” while referring to a socio-cultural description, rather than any specific Hispanic country. In the sense that Harper uses it in English, “nation” is much closer to “people”, without the French overtone of a polity that merits autonomy or even sovereignty by its very existence.
This is why we can speak in English of a Quebecois nation, in a way that we cannot speak of the Albertan nation. In Anglophone and Allophone Canada, the province that could most aptly bear the designation of “nation” would be “the Newfoundland nation”, particularly because of an established history of cultural and ethnic homogeneity.
And it is why we can understand, despite the brutal rhetoric of some of the intervenors, why it is necessary for the Quebecois nation to have its dialogue about minorities.
It seems quaint and even archaic to those of us in heterogenous Alberta, but we recognise that it is a good and useful thing for Quebec to discuss the boundaries of pluralism, because it may lead to a better understanding of the virtues of embracing otherness. This accommodation is the vital precondition to flourishing in the borderless world, and we must respect the sentiments of those Quebecois who are impelled to cling to the past, even as we disagree fundamentally and vigorously with their retrograde perspective.
As Quebec continues its internal dialogue, though, it might be unwise and even misleading to expect that a Canadian Prime Minister who uses the word “nation” in both English and French would knowingly promote secession or separation.
With the advent of the Clarity Act we have a process to establish nationhood and to leave the Canadian nation. Thus when Harper uses the word “nation” in both official languages we do not really need to pick one meaning over the other. But we must understand the difference — and live with it in our uniquely Canadian accommodation.
Friday, September 28, 2007
EnCana Says It Will Lower Investment If Royalties Rise.
Very low natural gas prices and the extremely high cost of drilling would not be a factor at play at all here would it? In any event given the market factor realities perhaps prudent business management practices would suggest such a strategic move is wise in any event; royalties notwithstanding.
Besides, this pull back and slowdown would help the overall Alberta economy to catch up to the growth pressures. We would have more trades, labour, material and other services available for all the projects that our municipalities so desperately need. They have money too. Right now the prices the municipalities have to pay for these projects are way out of line because of this over heated economy. This EnCana's move may be a blessing in the bigger picture.
Premier Stelmach is telling everybody in the patch to slow down and catch their breath. I would also add – if you have alternatives then bring forth some sound arguments with verifiable evidence to support them. If you have a better idea on how to get Albertans a fair share for their resources, that also shows a way towards more responsible sustainable development with enhanced resource stewardship – I will be the first to support it. We are looking for win-win here so be sure your ideas deliver on that goal too.
In the meantime don’t try to use intimidation tactics with either my government or with the citizens of Alberta - who are your landlords. Besides it's bad PR and it sucks as an example of Corporate Social Responsibility too.