The $6 Billion Blunder: Oil Obsession Has Alberta Looking Lonely

The government of Alberta’s continued reliance on the tar sands as the province’s main economic driver has put Premier Alison Redford in a very awkward position recently. With the market for foreign oil drying up in the US, her government is facing a $6 billion budget shortfall. For the first time in many years, Alberta is being forced to reach out for a little help from its neighbours, but the reception has been chilly.

The trouble began last year, when British Columbia Premier Christy Clark discovered that putting her unqualified support behind Enbridge’s plan to run its Northern Gateway pipeline through the province would constitute political suicide in an election year.

Whatever Clark’s motivations may have been—environmental or political—the result is that now they are in the midst of a struggle that Maclean’s Magazine calls, “the greatest political rivalry since former Newfoundland Premier Danny Williams ordered the Canadian flag removed from every government building in a dispute with the feds over offshore energy royalties.”

Then late in January, Redford met with Ontario’s new Premier Kathleen Wynn and by all accounts, relations were similarly strained. Several municipalities in Ontario have expressed concerns over the environmental dangers involved in Line 9, which was constructed in the 1970s and may not be up to carrying the highly corrosive bitumen being put out by the tar sands.

To be fair, this mess isn’t all Redford’s doing. Given Alberta’s history, it’s not surprising that other provinces might be wary of her advances. As Parkland Institute director Trevor Harrison pointed out last year in an op-ed piece for the Winnipeg Free Press, Alberta’s energy policy has historically leaned towards isolation and contempt for the rest of the country’s wishes.

In 1982 while serving as mayor of Calgary, Ralph Klein ran into a similar problem attracting investors to his city because of the open contempt he showed for the eastern workers seeking jobs in the province’s newly developing oil patch. With characteristic bluntness, he called them “bums" and "creeps” and blamed them for the rise in crime in his city. 

During his 14 years as Premier, the famously cantankerous Klein steered Alberta through much of the oil boom, but showed little interest in sharing or saving the wealth, preferring instead to spread it around in the form of “prosperity bonuses” of $400 to each Alberta resident in 2005. It’s sobering now to think that if that money had been saved, the interest alone might have gone a long way to digging Alberta out of its current financial hole. It’s even more frightening that, while the rest of the world was beginning to accept the hard lessons of climate change and oil dependence last year, the Alberta Wildrose Party promised a new round of bonuses beginning in 2015 should it have been elected.

Klein also had little interest in federal calls for reducing greenhouse gas emissions. In 2002, as part of a campaign to keep then Prime Minister Jean Chrétien from ratifying the Kyoto Accord, he famously dismissed warnings about climate change by wondering whether the first ice age was caused by “dinosaur farts.”

The message from the Alberta government has always been, the oil is ours and how we mine it, refine it and sell it is no one’s business but our own. Now that position is simply no longer tenable. In a recent address to the Alberta people, Redford laid out the challenges before the province and promised to find a way out without crippling social programs or, magically, raising taxes.

What she didn't say was that Alberta can no longer afford to make policy as though it were cordoned off from the rest of the country. It needs the help of other provinces to export its oil and that means taking into account the concerns of those who have not been blinded by a couple of decades of short-sighted prosperity.

But it is not enough to simply look for new markets; if Alberta is to free itself from this uncomfortable cycle of boom and bust, Redford must begin to rethink this reliance on the tar sands and find ways to diversify the economy. The question is, can the province let go of decades of rhetoric and take a new road?

In her address, Redford said that oil and gas “are our assets.” I disagree. In the 15 years that I lived in Alberta I learned that, as well as being a province of extraordinary resource wealth, it is a province rich in industriousness. Redford’s constituents are willing to work hard to secure their future, so why does she, like her predecessors, insist upon leading them down a path that puts them at the whim of politics and world markets?

Why not skip that inevitable pain and redirect some of that skill and ingenuity into clean, renewable energy industries that we know have a future? 

Image Credit: Government of Alberta.