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Blog: Path of my Life
by Karlin

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The Curious Question of Alberta's Oil Wealth

Low Royalty Rates as compared to other places is a gift from Albertans to the Oil Companies ; Why don't Albertans elect a government that will fight for them?

Date:   11/30/2008 1:15:07 PM   ( 6 y ) ... viewed 826 times

The Curious Question of Alberta.


"if Alberta's royalty rates were even close to most other developed nation's oil royalty rates, the Alberta government would indeed be swimming in money"


Countries around the world and other Canadian Provinces that have driven hard deals with oil companies ended up by getting good returns for the people there:
- Norway took control of their "Statoil" and is now the world's 2nd wealthiest economy, with a public pension plan worth about $500Billion ;
- Newfoundland and Labrador stood steady against the boycotts of big oil and eventually got a great deal for their public resources that propelled them from a "have-not" province to one that gives back to the rest of Canada now ;
- Venezuela also took public ownership of oil and are now raising millions of their citizens out of poverty.

Alberta gave away their oil to the oil corporations through royalty deals and the people of Alberta are mostly having a hard time now!! Unless they work at one of those tar-sands jobs in the northern, remote community of Fort MacMurray, the people of Alberta are struggling with the high prices of an over-heated economy, plus the economic ups and downs depending on the price of a barrel of oil, as well as with moldy old schools and hospitals, crumbling highways and other infrastructure.

All the oil wealth is going to the oil companies, and not just at the tar sands, but all over the Province of Alberta. The people, and the government coffers, are being left out of this bonanza. Those other places, mentioned above, all asked for higher royalty rates and they all got them. It is not true that there would be no investment if the rates were higher - they only have to be able to make money, the oil companies do not have to make "all the money".

In fact, I left Alberta 8 years ago because things were getting so rotten there. The smell eminating from the pet-food plant in my home town was one reason, but also the sheer weight of the sadness in seeing the environment of Alberta poisened - no more frogs and other amphibians, no more remote and wild forest, and the most concentrated production of greenhouse gasses in north america. Also, just living in a place where the political stench was so great was just too humiliating. There was something really really wrong with the way those Conservative governments kept getting elected.

So, here is the question:
Why did the people of Alberta elect all those Conservative Governments?

From some time before the 1960's, there have ONLY been Conservative Governments elected in Alberta. Premier Peter Lougheed had a long run of three straight terms, and Premier Klein was getting upwards of 85% support and then Ed Stelmach took over and is still getting huge majority results in elections now.

The "opposition" candidates vying for the top job were telling the Albertans that they deserved a better deal for their oil - oil is a publically owned resource until it comes out of the ground - but it just didn't seem to catch on. Were the people of Alberta so stupid as to turn down the option for becoming a much wealthier, overall, economy, instead of giving it all to the giant oil companies? Or was there some kind of corrupt electioneering going on?

It was probably a genuine result. The people of Alberta simply swallowed the idea that if the oil companies are doing well, then they will provide jobs for people, and there will be taxes paid on the profits the oil companies make. It was just not real, thats all. The money coming in to Alberta's government through the taxes paid on the profits of oil companies was, and is, a piddling amount compared to just a 10cent raise on the royalty rates, and if Alberta's royalty rates were even close to most other developed nation's oil royalty rates, the Alberta government would indeed be swimming in money. The number of jobs from oil activity amounted to a very small portion of the population, and about a quarter the number of jobs from renewable energy for the same amount of energy produced. Unemployment and "under-employment" are still big issues in Alberta, and the number of working poor is actually GROWING despite the huge dollars going in and coming out of Alberta's oil industry.

One more time: "if Alberta's royalty rates were even close to most other developed nation's oil royalty rates, the Alberta government would indeed be swimming in money." And that would mean a better life for Albertans. So why don't they elect a government that would fight for them?

Plus, the environment is pure poisen now. The native communities living near the tar sands are actually DYING from it. It is not being reported, their cries are not being heard, but it is a fact that their cancer rates, asthma rates, etc., are much higher than the national averages. And, as I mentioned earlier, the greenhouse gasses, which at least are contributing to global warming, are huge, and there is zero restrictions on oil companies to limit them - in fact, Statoil [from Norway] is now investing in the tar sands 'as a way to improve things there in Fort MacMurray and globally' with new technology that reduces the CO2 emissions - they are not doing it for the money, they are doing it to embarrass the other operators there to do a better job!!

I used to climb mountains in Alberta. The Sky was such a deep blue that it seemed almost black, as if from the mountaintops we could see into outer space!! Now it is all a light blue haze, even from the tallest and most remote mountains. From the front ranges you can see the smoggy haze over the more easterly parts of Alberta now. All this has changed there since the 1970s. Global warming is also evident, with warmer winter temperatures and much higher overnight lows as compared to just a few decades ago. The wildlife populations in Alberta are now nearly extinct of the more delicate species, and only the deer and coyotes seem to be able to thrive there now. The streams are almost void of fish in a place that used to be the origin of species such as the Bull Trout.

It is such a great sadness to me that I could not stay there. The "redneck" attitude is demeaning to anyone with a differing view from what the "official government attitude on the central issues" is, and that goes against the rugged individualism that used to be part of the people's mindset in Alberta. The fact that Albertans would allow their oil to be taken away at such a ridiculously low return to the public, to the government, is completely and utterly dispicable. Why DID they keep electing such a government?


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