Tuesday, May 22, 2018

This Way It's Easier to Make Sense of Rachel Notley.

It's easier when you think of Rachel Notley as that distant cousin who shows up blotto at the family reunion, snarling at everyone.

Alberta's outgoing premier is laying it on hot and heavy as Kinder Morgan's disingenuous deadline for the Trans Mountain pipeline is just over a week away.

Oh yeah, without that pipeline Alberta's going down and so is Canada. And, if Alberta's goin' down it'll damn well take British Columbia with it. Gimme another shot. Now, dammit. British Columbia - you bastards had damn well better roll over, and now. Mess around buddy and we'll cut off the gas. Think we won't? Just try us.

This would all be much more impressive coming from a premier of any province other than Alberta. Because we know what they would do with this imaginary windfall, if delusion could be transformed into reality. We know what they would do because we've watched them do it again and again and again. There's even a phrase for it. They'll just "piss it all away."

That's the theme of their favourite bumper sticker, "Dear God, Please Give Us Another Oil Boom and, This Time, We Promise We Won't Just Piss It All Away." Only they will and they do, again and again and over again.

They've let the better part of two trillion dollars of fossil energy slip from their fingers and they've got a 43 billion dollar deficit to show for it.
While Lougheed encouraged development of the oil sands, he took an interventionist approach with industry, making the oil companies abide by laws, regulators and legislators. When the industry boomed in the mid-’70s, Lougheed raised royalty rates, while the federal government hit it with taxes. 
But by 1993, the balance of power was shifting. Both Premier Ralph Klein in Alberta and Prime Minister Jean Chr├ętien were desperate to ramp up oil sands production to boost the economy. In return, the oil industry wanted less regulation, oversight and taxation. 
Chr├ętien and Klein obliged. Royalties were dropped to one per cent and taxes rolled back, while environmental regulations were weakened
Norway, by contrast, listened to Lougheed and, even though it never moved as much oil as Alberta, it now has the world's largest sovereign wealth fund to show for its prudent management of its windfall revenue.

Alberta and Ottawa have done everything imaginable to put lipstick on this pig. They've gutted fisheries regulations and navigation laws, they've lavished direct and concealed subsidies on the industry to the tune of $46 billion a year by the IMF's calculations, they've deferred royalties and clean up costs that are at this point probably unrecoverable. They've handcuffed themselves to a now dead hooker and it's making them nervous, desperate, irrational.

No pipeline is going to save Alberta from itself. That ain't gonna happen. They've screwed the pooch years ago. What's done is done. They're just not ready to give up yet and they don't mind who they take down with them. For them, British Columbia is a handy whipping boy and that's what they need now more than ever.


This post brought back memories of Alberta's "boom" days.  Here on the island we always knew when Alberta was riding high.  They would come out to the coast in the summer with new everything and ready to spend.

Who can forget Ralph Klein who, in 2004, dipped into Peter Lougheed's nest egg so he could claim bragging rights to having paid off Alberta's debt.

Of course it was really more like paying an outstanding VISA bill. It might have felt good at the time but it didn't last.

And then there was Ralph's handout, a $400 cheque issued to every man, woman and child in Wild Rose country. I never saw one of those but I'm told it looked just like this:

Chunk by chunk that fund evaporated. The provincial economy expanded, overheated, then the bubble burst until all that could-have-been/should-have-been wealth had been pissed away. Rinse and repeat and repeat again.

Klein begat "Special Ed" Stelmach who begat Alison Redford who begat Jim Prentice who actually mused about introducing a sales tax (what a bizarre notion) before he was trounced by Notley and her NDP. Windfall resource revenues have gone from being a source of future prosperity into an unreliable crutch to see the province through its immediate profligacy. It takes a unique sort of political leadership to allow a government to become addicted to revenues from a soon-to-be stranded asset. A certain junkie mentality seems to set in. Right now, Rachel is jonesin' and she's got it bad.


the salamander said...

.. but c'mon Mound, they have the Stampede ..

The Mound of Sound said...

and extraordinarily delicious beef, Sal.

the salamander said...

.. Truth
but we've migrated to PEI
potato finished beef
as our best pick

Anonymous said...

Socialize costs and privatize profits has always been the Enron (now KM) way. And boy have they found a pair of marks in Trudeau and Notley. Unfortunately, it's the rest of us who'll be paying to lard KM's coffers.


rumleyfips said...

You may have already read this.

No suitors emerge for Trans Mountain pipeline stake as Kinder Morgan deadline looms

Trans Mountain has : no cash, no investors and 1/3 of capacity unsold. No wonder noone is interested in the Kinder Morgan Money Pit.

The Mound of Sound said...

The next few months promise to be interesting. Trudeau could easily overplay his hand which might leave lasting scars on the country. Notley could ramp up her aggression. Who knows, we might see Carr's army deployed to quell dissent in British Columbia. I think anyone who says they know how this ends is delusional.

rumleyfips said...

Sorry, that should how come out as a link. It can be google at Global news.

BJ Bjornson said...

“It takes a unique sort of political leadership to allow a government to become addicted to revenues from a soon-to-be stranded asset.”

Have to disagree with that. Near as I can tell, the really unique governments are the ones that manage to not get addicted to easy revenues they can use to lower taxes and otherwise buy popularity with. Most succumb and just hope they are long gone when the taps run dry and the hangover begins.

The Mound of Sound said...

BJB, you're right. Petro-politicians do tend to have a remarkably short-term, usually myopic focus. Even supposedly prudent Thatcher succumbed to the windfall wealth of North Sea oil.

I guess the Norse really are the exception. I'm surprised they haven't put Peter Lougheed's visage on the Krone.