Last week, for the first time since she became premier, Christy Clark sounded like a leader instead of a salesperson. She went on record about the proposed Enbridge pipeline, asserting that B.C. would have to derive clear economic benefits from the northern B.C. project beyond the jobs that its construction will provide.
The response by Alberta premier Alison Redford was as predictable as it was wrong-headed. She turned a cold shoulder to Clark’s demand, claiming that Alberta would not agree to sharing its oil royalties. That’s not exactly a surprise — if Alberta was taking a reasonable cut of oil revenues, or using it more responsibly, tossing a few percentage points B.C.’s way wouldn’t be such a big deal. But they aren’t.
Take a look at what Alberta has done compared to Norway. With roughly the same amount of gas and oil production, the two jurisdictions have taken vastly different approaches. Maybe it’s because Norway is a country and Alberta is a province, maybe Norwegians are just smarter. But while Alberta’s vaunted Heritage Savings Trust Fund (HSTF), started when Peter Lougheed was premier, now stands at about $16 billion, Norway’s Oil Fund, or global pension fund (GPFG), now holds more than $614 billion. Its investments make it the largest stockholder in Europe.
Not to say Albertans haven’t benefited from oil royalties — the provincial government funnels billions into infrastructure and services so that it can hold down income taxes and keep Alberta a sales tax-free province. Essentially, it tosses surplus budget money into the HSTF. By contrast, Norway puts all of its royalties into the GPFG and has severe restrictions on how money can be removed from it, an amount that is capped by legislation.
Now generally I am not in favour of taking money out of taxpayers’ pockets and saving it for the future. I believe that taxpayers should get the benefits from their taxes and future generations can pay their own way. But money from resources is different. No generation can take credit for the existence of a resource and none should assume the right to hog the benefits. In Alberta, taxpayers are getting a whole lot of services they aren’t paying for at the very same time they are enjoying the benefits of jobs created by the oil and gas industry. They also will suffer only a small proportion of the environmental damage from resource extraction and use. I think it’s a greedy plan, one that is shortsighted and narrow-minded.
With China eager to invest in oilsands development and the Enbridge pipeline designed to get the product to the world’s fastest growing and now dominant economy, Alberta seems hell-bent-for-leather to help add to global climate and environment issues. China hasn’t been a leader in clean energy technology and providing it with a larger chunk of Canadian resources isn’t going to help.
Meanwhile, to the south, Americans are showing a little more restraint. President Obama put the brakes on a plan to connect the oilsands with a Nebraska pipeline, concluding that the environmental studies had been sadly lacking. Unless Mitt Romney assumes the oval office this fall, environmental considerations are likely to take a greater amount of attention in the U.S.
Enbridge, rapidly becoming known as a company with leaky pipes, just might have become its own worst enemy when it announced recently that it was adding $500 billion in improved safety technology to the northern pipeline plan. It didn’t take long for critics to start asking why that $500 billion wasn’t available before opposition to the plan started growing.
In the end, I suspect, the Enbridge plan will get B.C. approval. We will be tossed a few billion dollars over a long period to get our co-operation, Alberta will continue to grow the HSTF at a modest rate to enable voters to buy more stuff and China will get the oil it so desperately wants.
Unless a populace has the discipline that Norwegians have shown, it inevitably gets mired in a short-term race for jobs. It isn’t a way to build for the future but historically we haven’t been very good at that in North America and there isn’t any evidence we are about to start now.
Lorne Eckersley is the publisher of the Creston Valley Advance.