Oilpatch And Premier Fight Political War

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The people and businesses that got the axe first were those hard-working folks in rural Alberta – the supposed bedrock support of the PC party.

There are two pillars that hold up the economy in much of rural Alberta – agriculture and energy. Agriculture may be both steady and a way of life, but it can be unreliable, thanks to the whims of the marketplace and weather calamities. The energy industry on the other hand has seen growth and some security with well-paid jobs and business opportunities.

Suffice to say, drilling and servicing wells provide some real economic impetus to many small towns across the province. That reality, in many cases, provides the basis to keep farming and ranching viable, or at least operating. It shouldn’t be that way, but a good chunk of those involved in agriculture also have jobs working the rigs, driving the service trucks and doing the workaday business of the energy business. With any leftover time those folks also try to farm and ranch. Oilpatch jobs are also the driver that keeps more young people on the farm and living in rural areas.

Another pillar of the agricultural economy, but less appreciated, is the contribution of wives and partners. Those good folks many times are the teachers, nurses and other government workers whose jobs have been instrumental in keeping many farming and ranching operations afloat. But that’s another story.

The energy industry remains the big economic dog and not just with jobs. Well-site and access rentals provide much-needed income (although never enough) to many landowners. True, such income is only received by relatively few but it is an important contributor to the rural economy.

Taking all of that into account and the critical importance of such income and jobs to rural Alberta, one should be astonished at the cavalier, some say vindictive, approach the present Stelmach government takes towards the energy industry. That approach has seen a severe downturn in oilpatch economic activity, which results in a loss of jobs and overall business in the countryside. This has a direct impact on the income of many farming and ranching families.

One senses that when the present government came into power they had a chip on their shoulder against Calgary oil companies. From a political perspective that was understandable, being that the Calgary oil industry establishment had bankrolled one of its own for the PC party leadership. It would seem because of that, Premier Stelmach wanted to get even with those folks by biting them where it hurts most. True there is more to the story, but most would agree that the energy royalty structure that the present government imposed was punitive indeed. I expect that to the premier’s chagrin, oil companies decided to dodge his bite by taking their investment money elsewhere.

Punishing old political foes, real or imagined, might make government and opposition politicians feel good, but those political geniuses seem to have totally forgotten who the fallout from poking the oil industry in the eye would affect the most. It wasn’t going to be fat cat oil company executives in Calgary – they usually look after themselves first. The people and businesses that got the axe first were those hard-working folks in rural Alberta – the supposed bedrock support of the PC party. But that support may be the problem, because when you get taken for granted your vote becomes expendable and governments feel they can do what they want with impunity. Bill 43, the checkoff legislation is another example of that attitude.

The result of the government’s politically motivated royalty decision was predictable and we now have a true economic debacle occurring in rural Alberta. Reluctantly the Alberta government is slowly coming to realize the havoc it has caused, but as we know from experience politicians and bureaucrats are loathe to admit a mistake. The government is making some half-hearted amendments to the royalty structure, but it is too late and still less than the Saskatchewan and BC royalty structure. Good grief! A recent report stated that even NDP Manitoba was a better place to invest in energy projects than Alberta.

The premier and his fellow apologists blame it all on world markets and the new found abundance of competing shale gas. Curiously, the other provinces don’t seem to be worried about that and are doing everything they can to provide even more incentives for exploration and drilling. Is there a message there?

The Alberta government just doesn’t seem to get it, or more likely, doesn’t want to get it. The result is an ever-increasing stagnation in the rural economy, which has its inevitable impact on many farming and ranching families. With a growing drought disaster, market stagnation and government decision blunders on agriculture and energy issues a perfect economic storm seems to arising in rural Alberta.

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