Friday, February 09, 2018

The Case for Saying No to Alberta - They'll Only Piss it Away, They Always Piss it Away.

There are plenty of reasons that justify telling Rachel and Justin to shove that Kinder Morgan pipeline straight up their backsides.

Writing in The Tyee, Mitchell Anderson reminds us that Alberta with oil revenue is like a backalley wino on welfare day.

Rather than drinking more oil revenue Kool-Aid, Alberta should be more concerned with being saddled with massive cleanup costs when the market evaporates for the lowest-value petroleum on the planet. The Alberta government estimates that outstanding environmental liabilities now top $31 billion, yet security bonds cover only 0.5 per cent of that amount. Industry’s demonstrated desire to wash their hands of thousands of orphaned conventional oil and gas wells portends big problems if the bitumen market goes bust.

After squandering a resource bounty for decades and having virtually nothing to show for it other than public debt of $45 billion, the government of Alberta seems incredulous that British Columbians are less than enthused about dangerous diluted bitumen shipments off our coast. A spill of this toxic unstable emulsion, particularly in the confined airshed of Canada’s busiest port, would be catastrophic.

Premier John Horgan is correct to put the interests of British Columbians first, as Rachel Notley is doing with her own province.

It didn’t have to be this way. Alberta extracted $500 billion more petroleum than Norway, yet this small Nordic country has so far managed to sock away more than $1 trillion USD from the resource. If Alberta’s finances weren’t in such a shambles, perhaps there wouldn’t be a panic to punch a pipeline with such a dubious business case to the B.C. coast.

Alberta’s self-inflicted financial problems should not become B.C.’s environmental problems.

Mitchell points out that Norway, a country that has exported half a trillion dollars less oil than Alberta, is now sitting on the world's largest sovereign wealth fund. Why? Because when the Norwegians began realizing their North Sea oil bounty they listened to then Alberta premier, Peter Lougheed, who warned of the economic calamity that would befall jurisdictions that didn't treat windfall oil revenues cautiously, prudently.

Lougheed, very accurately, warned of boom and bust cycles. Boom cycles in which prices skyrocketed, like a sponge absorbing the easy money in peoples' pockets, wealth that evaporated overnight when the next bust cycle hit. Alberta prided itself on no sales tax, a benefit that really accrued to vendors who jacked up price tags commensurately. 

Little Norway listened. It didn't overheat its economy. It didn't squander its resource windfall. It didn't even invest that money in its own economy. It did everything that Alberta's reckless leaders didn't. An unbroken chain of fiscal sots, Rachel very much included.


Toby said...

Funny how so many Albertans don't want to hear about Norway.

The Mound of Sound said...

That's funny, isn't it. Why, Donald Trump loves the place.

Seriously though they never want to talk about how they do so much environmental damage for wealth they then just piss away. As Americans revere Lincoln, Albertans ought to revere Lougheed, probably their greatest premier and yet he's almost never mentioned while you regularly hear all about premier Mardi Gras Klein.

Anonymous said...

Notley keeps saying she's acting in the interests of Albertans in this dispute with BC. But that assumes that some of Alberta's best talents are best off propping up an industry that needs to die for the next generation to thrive.

Even if we assume continuing to prop up Big Oil is in the interests of Alberta, that's only true if the province recoups far higher royalties than it currently gets. Indeed, Notley knows this since she ran on a platform of hiking royalties which she quickly abandoned once elected.

We're in strange times indeed when Canada's Liberal PM and Alberta's NDP premier are far less foresighted than Pierre Trudeau and Peter Loughheed. It shows how far this country's politics have moved to the right.


The Mound of Sound said...

Strange times indeed, Cap. I find it amazing how many people mention their sense of general unease. Oh, I know. Soma. That's the ticket.

the salamander said...

.. this is really getting me aggro'd Mound. I love Alberta, but behaving like a dirty cop whining they don't get free coffee, donuts & the gas tank filled up is really starting to P me off. And let me add, I don't want to see see BC roll over on this.. or the rest of Canada. This is all dirty on the take politics. 'Public Servants' my ass.. this is about political party trough wallowing.. and wah we want the trough to be refilled right now.. we is hungry.

So easy to forget Ms Redford or Ms Christy of the Site C.. off goes Mr Wall to hang with family.. all ending up with big fat insider fed portfolios & here cometh Jason to reap the windfall.. learned the ropes from Steve & Ray & Laureen.. Forget corn fed fattened.. tax payer fed fattened is the new thing.. and feeding the raging over populated Asian 'economy' is the latest greatest sucker play