Energy companies need to engage early with NDP by Trevor McLeod, May 13, 2015, Calgary Herald
There is great consternation in Alberta’s energy sector following last week’s election of an NDP government. The energy industry, however, would be wise not to rush to judgment on Rachel Notley’s new team.
As people across Alberta clamour to figure out what the seismic political shift means, there is deep concern in downtown Calgary about some NDP policies. The fear is palpable when it comes to fiscal policy — the combination of another royalty review, increased corporate tax, carbon pricing and increased refining in Alberta has people fretting.
The premier-designate has gone out of her way to signal that she is willing to work with the energy sector. She has also indicated that she will build a government steeped in Alberta’s traditions — not one beholden to the federal NDP. Albertans have chosen Notley’s team and it deserves a chance to demonstrate it can govern effectively.
Frankly, the NDP will need all the help it can get; it did not have the benefit of recruiting candidates with either the expectation of victory, or the luxury of time. As a consequence, all but four of her 53-member (subject to recount) team has no experience in the legislature at all and have much to learn about how government business gets done. While the NDP policy platform sets the general direction for our new government, there is not much policy meat on the bones. Albertans who care about this province should seize the opportunity to help the new government shape policy.
… The faster the energy sector moves from fear and resentment to constructive engagement, the better off Alberta will be. In the wake of this political shift, it is easy to miss the opportunities presented to the energy sector by an NDP government. Public polling research conducted by the Canada West Foundation in 2014 indicated that public support for the energy industry is extremely low across the West. The polling revealed a widely held perception that the industry is interested in profits to the exclusion of all else.
There has also been a perception that governments and regulators have been in the pocket of industry — which has contributed to the negative perceptions of Alberta held in other parts of the country. The perception of Alberta’s government changed in last week’s vote; it will not be as easy as in the past to accuse an NDP government of being captured by the energy industry. [Time will tell whether anything improves in Alberta’s unenforceable energy industry and its legally immune, bullying and abusive “no duty of care” AER and wibble-wobble useless enabler Alberta Environment or whatever it’s called now]
The Notley government’s support for oilsands and pipelines — even if it is a more conditional and qualified support — will have wide-reaching implications for interprovincial relations in Canada. If premier-designate Notley seizes the opportunity to reimagine Alberta’s climate strategy — and she does so in a thoughtful way that respects Alberta’s economic interests [What is that supposed to mean? Bowing to bribery and kickbacks while allowing corporate non-compliances that enhance massive private profit-taking while violating the public interest and harming Alberta communities and families?] — then the energy sector could reap enormous benefit. She may actually be able to clear the political barriers that have riddled pipeline approval and construction for years.
It isn’t going to be easy, but the prize is worth the effort. Let’s hope the industry is able to move from fear to constructive engagement in short order.
Trevor McLeod is director of the Centre for Natural Resources Policy at the Canada West Foundation, a think-tank devoted to prosperity and quality of life in Western Canada. [Emphasis added]
Notley says royalty review will take place this term by James Wood, May 12, 2015, Calgary Herald
The NDP isn’t backing away from its election pledge to review Alberta’s energy royalty structure. Premier-designate Rachel Notley said Tuesday the royalty review will go ahead in this term of the incoming NDP government, though the exact timing is uncertain. The NDP plan to study — and potentially overhaul — Alberta’s energy royalty scheme has raised concerns in the oilpatch, with at least one company threatening to invest elsewhere because of the review.
But Notley said that’s not what’s she’s been hearing from energy industry leaders since she led the NDP to a majority in last Tuesday’s provincial election.
“It’s been quite the opposite. I’ve had some really good discussions with people. They’re looking forward to working collaboratively. They understand what’s in our platform and they believe it’s the kind of thing — if we come together and work collaboratively — we can ensure stability and good decision-making,” she told reporters in Edmonton. “My guiding principle is the economic health of Alberta, job creation and maintenance, and as a result of that the sustainability of the industry.”
The review is intended to determine whether Albertans, as owners of the resources, are receiving an appropriate share of the benefits from oil and natural gas. The NDP also wants to determine whether it can find incentives for more upgrading in the province.
Notley said a decision on the timing of the review will be made after a new cabinet and energy minister are appointed and the issue can be discussed more thoroughly. “It will happen within this term and it will be preceded by good, thorough discussions with all stakeholders, including industry. No one will be surprised by the way it unfolds,” said Notley, who has been reaching out to oilpatch executives.
Encana CEO Doug Suttles said Tuesday that Notley had called on her own initiative to discuss energy issues.
Suttles said he doesn’t expect quick policy changes given that Notley is still putting together her government. “The core of the conversation was, ‘Let’s make sure we talk as you consider alternatives. If we can in any way support with information or insight we’re happy to provide that,’ ” he told reporters at the company’s annual general meeting in Calgary.
The CEO of Bonterra Energy told some media outlets the company had originally planned to make all its investments in Alberta this year but the uncertainty around the NDP royalty review meant it is now looking at putting some of those dollars into Saskatchewan or British Columbia.
Alberta Party Leader Greg Clark, who won Calgary-Elbow for his party in last week’s election, urged Notley to move forward quickly with the review. The longer it takes to happen, the longer the industry has to live with the unknown, he said. [So What? For how many decades has industry been sucking billions out of Alberta? Nothing wrong with going slow and doing the review right to make sure all and any rip offs stop]
“Pretty clearly, they’re going to go ahead with (a review) but to think the industry could be sitting in this limbo for four years is not good for industry,” said Clark.
“What matters almost as much as a very competitive royalty regime is certainty around what the royalties are.”
The Canadian Association of Petroleum Producers declined an interview request Tuesday but said the organization is expecting to meet with Notley in the days ahead. “The current issues important to the oil and gas industry remain the same — enhancing the competitiveness for investment, including a stable and predictable fiscal regime … and protecting jobs,” CAPP spokeswoman Chelsie Klassen said in an e-mail. [Emphasis added]