B.C. Premier on a Rampage

Smoky Lake Signal Article No. 230 (August 1, 2012) Whispering in the Wind An interesting thing happened to me while writing this article, the power went off and my plans had to change abruptly. I had to quickly learn my wife’s portable, battery operated computer system and at 71 that wasn’t easy. Hopefully this re-write will make it through the system before the copy deadline. B.C. Premier on a Rampage – Wants More Money! Premier Christy Clark of British Columbia threw a monkey wrench into federal-provincial and inter-provincial relations last week when Ms. Clark demanded more “benefit” and less risk from the construction and operation of the proposed Northern Gateway Pipeline; a $5.5 billion project that would ship bitumen from Alberta’s oil sands to Kitimat B.C. and then onward to Asian markets. According to some research done by the B.C. government; 8.2 per cent of the Northern Gateway’s projected $81 billion tax revenue would go to B.C. over a 30 year period. Said another way: $6.7 billion for B.C.; $4 billion for Saskatchewan; $32 billion for Alberta; and Ottawa would take in $36 billion. Premier Clark carefully states that if the Province of British Columbia doesn’t receive more “benefit” (from Alberta’s royalty levy) there will be no pipeline project. In one sense, Premier Clark has outlined her version of a National Energy Strategy, specifically as it relates to oil sands development in Alberta, in the meantime Premier Redford is moving forward on her version of a National Energy Strategy with the support of nine premiers and the territorial leaders (apparently without the participation of the Premier of British Columbia). To sum up, I think Premier Clark’s demands are ridiculous and divisive – and most important; extremely dangerous for the country – leads me to think that she has other motives. B.C. Premier of a Rampage – Wants to Get Re-elected! In early June of this year a poll was taken on Canada’s provincial premiers and their approval rankings – Saskatchewan’s premier, Brad Wall raked first with a 67 percent approval; second was Alberta’s premier, Alison Redford; and the premiers of Manitoba and Newfoundland / Labrador tied for third. The poll put Liberal leader and premier of British Columbia, Christy Clark’s rating at 30 per cent, a drop of 3 per cent from a similar poll taken in March of 2012 – only the Nova Scotia premier had a worse showing. Relevant is the ranking of British Columbia’s opposition leader, NDPs Adrian Dix, who ranked second most popular opposition leader in the poll with an approval rating of 58 per cent. To repeat, the poll was taken in early June, 2012 and the pollsters at that time indicated that if Christy Clark wants to hang on to power, she and the Liberals will have to find a way to close the gap before the next election (the election must be held in less than a year). Well, Christy Clark found a way to gain positive attention in British Columbia, the Northern Gateway Pipeline project. One pollster has already indicated that Christy Clark’s actions and rhetoric is going over well in British Columbia and could mean an approval boost of 10 or more points. Ten or more points is critical when fighting in an election – looking forward to an election in the early fall in British Columbia and a lot more Alberta bashing.

CHANGES IN ALBERTA

Smoky Lake Signal Article No. 229 (July 25, 2012) Whispering in the Wind Two important “political” events occurred just two days ago with another unfolding as this column is published. Collectively, these three events will end up showing the effectiveness of Canadian “cooperative” federalism – or show that “cooperative” federalism is just not working. NEXEN Inc. Takeover China’s state owned China National Offshore Oil Company (CNOOC) put in a bid on Monday to take over the interests and assets of Calgary based, NEXEN Inc. for $15.1 billion. The CNOOC will have to go through a lot of hurtles but in the end I don’t see any Canadian foreign investment review process turning down the application. For many in Ottawa it is particularly welcome news and demonstrates that Prime Minister Harper’s strategy of diversification of markets is working. The Prime Minister also wants Alberta’s oil sands development to be the cornerstone of Canada’s national energy strategy that identifies Canada as being an international energy “superpower” with locked in markets – the logic fits in perfectly with Premier Redford’s call for a National Energy Strategy. Nevertheless there are consequences for supporting the NEXEN takeover and the loss of some control over Alberta’s (if you will Canada’s) oil sands resource base. In my view the NEXEN has to be put into some sort of context, here is my first attempt: 1. Two studies that I have read about indicate that about two thirds (or about 71 percent) of oil sands production in Canada is owned by foreigner entities. 2. The Peoples Republic of China through state owned companies have invested something like $11.7 billion in oil sands production (between 2007 – 2011) which is about 16 percent of total investment of $73.6 billion (between 20907 – 2011). The NEXEN takeover price is $15.1 billion, one could conclude that China’s interest in Alberta’s oil sands development has increased to somewhere around 30 percent. 3. The NEXEN news releases regarding the CNOOC bid stress the fact that a good deal of their activity is international in scope, but it should be pointed out that NEXEN has significant interest in oil sands development: they have a 7.23 percent interest in Syncrude; have an operating project at Long Lake that NEXEN own 65 percent and CNOOC owns 35 percent. In total NEXEN has something like 300,000 acres of leased land in the Athabasca region with something like 3 – 6 billion barrels of recoverable oil sands resource. If the China National Offshore Oil Company is successful in the purchase of NEXEN, the CNOOC plans on opening a head office in Calgary which would control their North and Central American operations. CNOOC will also register on the stock market, something I find strange? British Columbia Demands More Benefit and Less Risk On Monday the British Columbia government released it’s conditions regarding their support for the proposed Enbridge Northern Gateway Pipeline project which, if approved, will move bitumen from Alberta to Kitimat, British Columbia and then onto Asian markets. For the British Columbia government the demands are quite straight forward; they want a greater share of the benefits (currently estimated at 8 percent) and a greater spread on the potential environmental risks attached to the project (both marine and pipeline). The Alberta government has rejected both demands indicating that the government of British Columbia, in making demands that will pit one province against another. The real question is going to be how Prime Minister Harper is going to deal with the aboriginal questions; where the proposed pipeline route will be going through hundreds of reserves. Council of the Federation Meeting The Premiers of Canada are meeting this week in Nova Scotia and there appears to be a lot of frustration regarding the apparent cool relationship between the Premiers and the Prime Minister. That coolness is not only reflected in the lack of First Ministers Meetings (none have been held for years) it is also reflected in the PM’s reluctance to have national discussions on topics like healthcare, education and of course, a national energy strategy. Premier Darrell Dexter is hosting this years meeting and suggests that there is some “consternation” amongst the premiers in that the Prime Minister is not engaging the provinces when the provinces are directly impacted by decisions made in Ottawa. What transpires at this meeting in Nova Scotia is not only going to be interesting the question is going to come down to will Prime Minister change his mind and do some NATION BUILDING with the premiers?

Smoky Lake Signal Article No. 228 (July 18, 2012) Whispering in the Wind After a two week holiday it has not been easy to get back into the groove of writing a weekly column; largely due to the hot weather and my unexplainable passion for the game of golf. Fortunately the Smoky Lake area saw some much needed rain on the weekend and that allowed me to set down some thoughts on what has been going on (or not going on) in the news. Smoky Lake Area A few weeks ago I wrote about Smoky Lake’s potable water issues and thought that the Highway 28/63 Regional Water Commission would explain why water is not flowing from the recently built (and completed) water delivery system. My understanding is that the bottleneck is a result of Capital Region Northeast Water Services Commission over-dedicating water supplies to industrial subscribers in the region south of Redwater – which likely means more pipeline capacity will have to be added if potable water is to flow into the Thorhild-Smoky Lake region. Two questions immediately come to mind: when will additional pipeline capacity be realized south of Redwater, and who is going to be paying the bill? Another bit of information has come to light that I found quite disappointing, if not disturbing; Dean Pickering resigned his position as Smoky Lake’s Town Manager. I personally found Mr. Pickering to be a very capable administrator and hope that the town council’s selection group finds someone with equal capabilities and qualifications. National Energy Strategy Even before she became Premier, Province of Alberta, Alison Redford was a strong advocate for a national energy strategy – from my perspective it was one of the key elements in her successful bid for the leadership of the Alberta PC Party and then her subsequent success in last April’s general election. More recently Premier Redford has taken her message for a Canadian National Energy Strategy into numerous political discussions within Canada, the United States and most recently, into the Peoples Republic of China. From what I have read there is some support for the concept (even in the private sector) but a real lack of detail and that is why Prime Minister Harper is a little cautious in offering the federal government’s “gung-ho” support for Premier Redford’s ideas. There is no doubt in my mind that the Prime Minister likes and supports some of the building blocks of a Canadian National Energy Strategy but doesn’t want to be involved in some of challenges attached to the development of a common regulatory framework in the provinces, never mind the problems attached to and dealing with the many aboriginal issues related to the construction of pipelines. For Premier Redford, her priority wish list is clear – the construction of two bitumen pipelines from Alberta to satisfy United States and Asian markets. If I were to summarize: Premier Redford has a brilliant economic idea that should be pursued with vigor – in the end, there will be a Canadian National Energy Strategy – and in the end, that Canadian National Energy Strategy will have to include environmental sanity, resource upgrading, diversification and economic consolidation. For Prime Minister Harper, it is time that he get off his ideological high horse and reject the idea that it is CENTRAL PLANNING and accept that the process being discussed is a form of NATION BUILDING.

Smoky Lake Water?

Smoky Lake Signal Article No. 227 (June 27, 2012) Whispering in the Wind Having sustainable, reasonably priced WATER for Smoky Lake’s communities are two great objectives that few would argue with. But circumstances in the area have actually degenerated with a lot of confusion regarding the facts and differing opinions as to what measures are going to be required to fix what appears to be a politically mismanaged set of circumstances – a situation that for the moment, appears to be out of control. Here are a few facts that are not in dispute: the waterline from Redwater to Waskatenau was completed a couple years back; the waterline from Waskatenau to Smoky Lake was just recently completed; but surprise, surprise there is no water available to fill the waterlines. Alberta’s “Water for Life” Strategy The Government of Alberta enacted a “Water for Life” strategy in 2003 and by that strategy, introduced a new, innovative “watershed planning approach” to deal with water and land use management issues. Critics have applauded this new approach to protect Alberta’s watersheds but have reservations related to how this new approach was being implemented, monitored and governed. From my perspective, recent revelations and actions by two relatively new governing bodies (the so called water commissions of northeast Alberta) are clear examples on how governance of a reasonably well thought out policy initiative, the “Water for Life” strategy, can get screwed up when it comes to the implementation and governance. The Water Commissions To implement the “Water for Life” strategy and to administer the water flows from EPCOR’s water treatment facilities in Edmonton going into north east Alberta, two water commissions have been established to manage the distribution system. First is the Capital Region Northeast Water Services Commission (which includes the various counties and municipalities south of Redwater and includes major centers like Fort Saskatchewan and Gibbons). The newer, second water commission has been labeled the Highway 28 / 63 Regional Water Commission (includes the County of Thorhild and the County of Smoky Lake and the various municipalities within those two counties). From my perspective, having a single water authority that oversees a safe, sustainable, reasonably priced water distribution system is not only necessary, it is critical. To have two independent water commissions overseeing a single distribution network is a recipe for sub-region price discrimination and unfair distribution practices – a true recipe for disaster. The Issue As I already pointed out the establishment of two (independent) water commissions puts the Thorhild and Smoky Lake regions at a major disadvantage when it comes to discussing the fair, reasonably priced distribution of water into the more northern area communities. From what I understand, the waterline capacity that’s presently going into the Capital Region Northeast Water Services Commission was, in part to be directed to the Highway 28 / 63 Regional Water Commission for residential use participants. Since the waterline capacity that was to be directed to the Highway 28 / 63 is being used by the Capital Region’s commercial participants – if I understand the conditions for the dedicated waterline, commercial use is a no – no? So the conclusion has got to be, build another waterline, but at whose expense and is there additional capacity available through EPCOR? In the meantime things are getting a little tense between the two water commissions – Gibbons councillor Doug Horner expressed his sentiments with a rather curt comment, “All our member communities would suffer so someone in Smoky Lake could wash their car.”