Oil sands – time for Alberta to make lemonade from lemons

Albertans have always been fairly independent in how they see their role within Canada’s confederation. Anti-federal sentiments rose to an all-time high in the 1980s when the then-Liberal government in Ottawa nationalized Alberta’s oils resources. Many Albertans lost their jobs and homes, and some were faced with such personal catastrophe that they saw no other way out than to take their own lives.

Since then, there has always been a rather strong opinion in favour of a “firewall” or secession in Alberta. Even at the best of times, polls show that there is always a steady contingent of around 50% of Albertans who would vote for outright independence if a referendum were held. Quite often, in fact, pro-independence is a much stronger movement in this province than even in Québec, but Albertans tend to be more quiet about their feelings on this issue than the always screaming, always-demanding separatists in Québec.

When Stephen Harper, born in Toronto but raised in Alberta, became prime minister for the first time in 2006, Albertans celebrated that after many decades, when the West wanted in, it was finally in. Or so it seemed at first.

It didn’t take long for Prime Minister Harper to antagonize his base back in Alberta, for example, by showering special favours on Québec and essentially becoming a “Liberal Lite” prime minister, rather than the pro-West, small-government fiscal conservative that Albertans, in particular, had thought he would be. This, among other things, has instilled in Albertans a belief that the West and Ottawa will always be at loggerheads, regardless of which party happens to hold power in the federal capital at any given time.

But now there are signs that Alberta and Ottawa might be headed for the ultimate showdown. Alberta’s lifeblood is its oil sands and gas industry. Even though there are other sectors in the Albertan economy too, compared to oil and gas, they are nothing if not fringe elements. Not surprisingly, then, whenever anyone so much as raises a veiled criticism of the oil sands, Albertans get so incensed that they would almost want to put a contract on such critic’s life.

Recent years have seen a lot of such attacks on the oil sands, mostly from environmentalists in connection with the theory of “man-made global warming”. Despite thousands and thousands of other more serious sources of pollution around the world, Alberta’s oil sands always seem to be singled out, as if they were the sole cause behind the planet’s warming climate.

Naturally, Albertans are especially sensitive these days when outsiders talk about the oil sands (or disparage them by, wrongly, referring to them as “tar sands”). Even usually-sedate Alberta premier Ed Stelmach is said to blow a gasket now and then when someone badmouths Alberta’s source of wealth.

That the production of oil and gas is connected to environmental issues cannot be, nor should it be, denied. The way oil is extracted from the oil sands consumes a lot of water – albeit much less now thanks to new technology than just a handful of years ago – and has also been known to contaminate rivers.

The human spirit has always been resourceful, and surely over time someone will find a new way of producing oil that is absolutely or virtually emission-free. It won’t happen overnight, but if the last, say 150 years of human engineering history are anything to go by, one can safely assume that it is just a matter of time. However, it may require a gentle, or less-than-gentle, push in the right direction first.

Alberta has already introduced a kind of carbon tax on its own oil industry, although it is extremely low and could certainly be increased so as to be taken seriously by the enviro-crusaders who repeatedly call for more action. But no matter what Alberta has or has not done, the federal government is becoming antsy and wants to start regulating Alberta’s oil and gas industry – against the will of the province, if necessary, and thus interfering with provincial rights the way Ottawa did about 30 years ago.

Everything so far appears to point to yet another major clash between Alberta and Ottawa and that the next time could be the ultimate one – the one that could very well see Alberta become either a loosely affiliated (“firewalled”) province or an independent country. For from the premier all the way down to the man or woman in the street, almost everyone seems to take offence with any outsider so much as mentioning the oil sands, which by itself is considered a criminal offence by many.

All this the-sky-is-falling talk, however, is somewhat premature. No one yet knows what the federal government would regulate, and how. Since Alberta has not done as much as it could have done, thus strengthening the hands of those who have made it their hobby to sully Alberta’s reputation in the world, federal intervention may be bitter medicine at first, but may well turn out to be a Godsend.

Assuming strict new federal rules and regulations, it is quite possible that the oil and gas sector in Alberta will experience some degree of deceleration. A sizeable number of Albertans may be thrown off the oil fields and straight onto the unemployment line. Since the provincial economy depends almost exclusively on this industry, as does the provincial government, everyone may be forced to tighten their belt.

But at the same time, it may teach the province a valuable lesson: if you build up, and then rely on, a monoculture, you set yourself up for colossal failure down the road. So what if the oil sector is forced to slow down? It would, hopefully, push Albertans to diversifying their economy and developing industries other than the fossil fuel sector. Maybe this would open up the vast empty space for more manufacturing and also services. It would also benefit a city like Calgary if more of its office space were occupied by non-oil companies – for example, think of publishing houses, software and computing companies, a wider range of business services, as well as more creative industries.

While a (forced) slowdown in oil and gas would end up costing a lot of jobs, Alberta’s labour market would likely develop more job opportunities for a greater number of Albertans who, so far, have had to “emigrate” to Toronto or Montréal because of a lack, or near-complete lack, of jobs in their professions or occupations in Calgary, Edmonton, and almost all other places in between.

The Harper government can be called many different things, but it won’t kill the goose that lays Canada’s golden eggs. Even Mr. Harper, misguided as he is on most other portfolios, understands and acknowledges the tremendous role Alberta plays in Canada’s economy (such as through providing jobs for Canadians from coast to coast) and in the fiscal well-being of the country (through tens of billions dollars injected into the federal equalization system).

Both sides, therefore, would do well to take a deep breath and listen to what is on offer first.

One thought on “Oil sands – time for Alberta to make lemonade from lemons

  1. I always said that what Harper has planned will make the old NEP look like choir boy stuff. They need to tax the industry to pay down their created federal deficit these non-conservatives, as you call them, now that they have 416 and 905 M.P. types elected. Funny how Sun TV run by a former Harper communications spokesperson with their commical bonehead rants and slants have not picked up on this. Oh well, you only get in life what you vote for or what you don't come out to vote for. I agree in the previous web columns what Bruce said and your warning to Wildrose Alliance people that they shouldn't celebrate at all who now has a majority in Ottawa as this is not in Alberta's or the West's best interests if they dare to plan such a scenario to get away with it conning people again.