We Don' Need No Steenking Pipelines

Fourth Time Lucky?

All is not well up Alberta's Athabasca poop chute.  The Tyee's Mitchell Anderson writes that the Wild Rose hangover is just setting in.

So what does Alberta have to show for some 24 billion barrels of conventional crude and bitumen that have so far come out of the ground? The province is currently over $12 billion in debt and is projected to run a budget deficit of $500 million this year, the seventh consecutive year in the red for a province that prides itself on having a sharp fiscal pencil.

Resource prices often go through boom and bust cycles, and this is certainly not the first in Alberta, as evidenced by a certain iconic bumper sticker. Yet to fully grasp Canada's colossal lost opportunity, we need to look toward our Norwegian neighbours.

Norway, like Canada, was scaling up its petroleum industry in the early 1970s. It endured the same cyclical rides in resource pricing, and negotiated terms with many of the same foreign companies.

Yet Norway now has over $1 trillion socked away in its sovereign wealth fund, a dedicated repository of all petroleum revenues. Even if oil was worth nothing tomorrow, the country would still have no public debt, fully funded social programs that we can only dream of, and a very large nest egg to transition to a new economy.

So where is our nest egg? The Alberta Heritage Fund was started almost 15 years before the Norwegian oil fund, yet the province has not contributed a dime of resource revenues since 1987. This moribund fund has only two per cent of the value of Norway's pile of cash, which is now the largest sovereign wealth fund in the world.

The difference is what Alberta had that Norway didn't have.  The Norwegians didn't have Ralph Klein.  They didn't have Ed "Special Ed" Stelmach.  They didn't have Alison Redford and they sure as hell didn't have Sideshow Steve Harper or Joe Oliver.  They also were spared the sophomoric and ultimately self-destructive ideology these morons inflict on all and sundry in their rush to maximize bitumen extraction at any cost.

The laissez-faire approach to resource management in Alberta has been a fiscal disaster compared to what might have been. In 2012, the province collected a mere $4.04 in royalties per barrel of oil equivalent. That same year, the Norwegian taxpayer raked in $46.29 on their petroleum production -- more than 10 times as much. How did they achieve such vastly better results? By embracing a profitable public involvement and oversight in their resource economy that would be abhorrent to the Fraser Institute worldview that has taken root in Alberta.

While it is true that Norway's Brent crude is worth much more than the low-grade bitumen currently wrung out of the oilsands, Alberta has also produced enormous amounts of conventional crude since oil was discovered in the Turner Valley southwest of Calgary 100 years ago.

Ignoring the oilsands altogether, Alberta has produced 18 per cent more conventional crude and natural gas than has Norway, and the province didn't have to venture hundreds of kilometres into the North Sea to get it.

Anderson sees a glimmer of hope in the recent election of Jim Prentice to become the province's premier.  He thinks Prentice might just be the first sane Alberta politician to come along since Peter Lougheed.  Maybe, we'll see.

Remember, these are the same people who are telling the people of British Columbia to stand aside and let them run hazmat pipelines across our province so that armadas of supertankers can ply our pristine but treacherous coast.  I don't think so.