Alta. too hands-off on energy approvals
Many Albertans get prickly at the prospect of oilsands bitumen flowing to the U.S. for refining. And rightly so -- for how can the province make most of its finite resource if low-priced bitumen and high priced refinery jobs go south? Last fall, Ed Stelmach raised exactly that concern when two major exporters, BP and Encana, announced plans for two large-scale export projects. Stelmach likened bitumen exports to selling off topsoil, clearly a bad idea.
As it turns out, more than a dozen U.S. refineries want to gear up to accept bitumen.
Some forecasts say 1.5 million barrels a day will be going south by 2020 -- more than today's entire oilsands production of 1.25 million barrels a day. About one-third of the bitumen produced today is exported.
The crucial first steps to implement in this export strategy are already being taken. This month, the National Energy Board started hearings into the $2.1-billion Keystone pipeline proposed by TransCanada Pipelines to carry around 435,000 barrels of bitumen a day to Illinois and Oklahoma.
Enbridge is also putting together a pipeline proposal, the Alberta Clipper, for U.S.-bound bitumen.
Approval of a new export pipeline is an irrevocable decision about the use of Alberta's oil reserves, and there's been no opportunity for a public discussion about what's at stake for the province.
The proposed bitumen exports, for instance, are already creating thousands of jobs in Texas to renovate aging refineries, for instance. What other opportunities will flow south? A group of Alberta labour unions is trying to raise that red flag at the NEB hearings. The Alberta Federation of Labour says 18,000 upgrading and refining jobs will be lost if the pipeline is approved, as well as the opportunity to build a more diversified economy.
AFL president Gil McGowan asked the NEB to delay its approval until Albertans and policy makers have a chance to address those issues in a public forum. Because once the pipes are in the ground and the billions invested in re-tooling U.S. refineries, there's no turning back. Alberta and Canada will be tied into the "limited role of miner and extractor." "We're at a crossroads and decisions we make now will affect Alberta and Canada for generations to come. We can't afford to get it wrong," said McGowan in an interview.
"I was asked at the hearing what is the right proportion for export and I said that's what the public should be discussing. These are the resources they own collectively." "The public should be setting the course, not just narrow interests of the big industrial players." The NEB sent a message earlier this year that it does not want to consider the labour federation's concerns: "these are matters of broad public policy that are properly under the purview of federal and provincial government," it said in a February report.
Albertans have heard the NEB refrain before. The Alberta Energy and Utilities Board last fall declined to consider Ft. McMurray's request to delay approval of the three giant projects on the same grounds.
Municipal problems coping with boom are not an EUB responsibility.
That's correct, strictly speaking. But in this deregulated environment, Alberta has no public forum for raising these issues around energy projects. There's no discussion of what's an appropriate target for domestic upgrading nor a policy to promote refining in Western Canada, for instance.
Alberta Energy Minister Mel Knight, like his boss, has backed off earlier concerns about selling off the topsoil. Large-scale exports have the advantage of creating a bigger demand for bitumen, says the department. That will help raise the price (about one-third to half of the price of oil) and that in turn means higher royalties.
The Alberta government is content to delegate these difficult decisions to regulatory agencies, or the market. If a proposal for a nuclear power project came forward, would that too be delegated to the EUB? Or how about the issue of water exports? But elected representatives should remind themselves that delegating these tough decisions doesn't make the MLAs less accountable for the impact of these decisions and the direction they take this province.
Edmonton Journal, Tues June 12 2007, Page A16
A sobering message
If this isn't a political slap up the side of the head I don't know what is.
But will Ed Stelmach and the Alberta Tories get the message?
Calgary pollster Bruce Cameron released his latest survey this week. Complete with a headline that screamed "Stelmach stumbles in big cities."
He talked about how the premier's disapproval rating in Edmonton and Calgary has jumped from 15% to 29% since the Steady Eddy days in January when Stelmach was still enjoying his political honeymoon.
After the Cowtown figures are broken out, the picture goes from bad to worse. Cameron noted a "significant and growing discontent" in Alberta's second city where the premier's disapproval rating now stands at 39%.
In Redmonton - where Stelmach's Ukrainian roots were supposed to win back the PC's popularity - the thumbs-down factor doubled from 13% to 29%.
And when Albertans were asked if the Stelmach government was "leading Alberta in the wrong direction," 30% agreed. The same question was put to them in January and only 10% answered "wrong."
In Calgary, 41% said Ed is leading us down the garden path.
This is troubling for the Tories for sure - especially now that the byelection in Ralph Klein's old Calgary Elbow riding appears to be turning into an Ed-a-rendum.
This is not the end of the Tories as we know them. When Cameron asked the crucial "if an election were held tomorrow" question, the PCs still got 47% support province-wide, but were down nine points in Edmonton and a disturbing 19 points in Calgary.
Sadly, Cameron doesn't put a finger on what's bugging Albertans.
But you can bet the Stelmach PCs' growth management blunders rank right up there.
And there was more where that came from yesterday after Enbridge CEO Pat Daniel filed his provocative plan to build the Alberta Clipper big inch oil pipeline from Hardisty to the U.S. Midwest.
This project could hit 800,000 barrels a day if proposed future expansions are built.
Daniel called the application "timely," mainly because of the "growing supplies of crude oil from Alberta's oilsands."
Which sounds like more bitumen and jobs down the pipeline to the States.
It's the thing Ed Stelmach compared to stripping the "topsoil" from a farm when he was on his game during the PC leadership race. But since winning the job, he's done diddly squat about it.
On Monday, crucial hearings begin before the National Energy Board on another job-stealing raw bitumen line to the U.S.
The Alberta Federation of Labour has already branded TransCanada's Keystone pipeline a "devil's bargain."
"Why, we ask," AFL president Gil McGowan blasted in his submission, "should Canadians settle for 17 jobs when they could have 18,000?
"Labour's interest is in keeping industry and good jobs in Canada," McGowan boomed.
Shouldn't that be the government's job, too?
And what applies to Keystone clearly applies to the Alberta Clipper, too.
Meanwhile, the Alberta Tories plan on sending one lowly market analyst to monitor the Keystone hearings.
Another Stelmach government boondoggle blew up right on schedule yesterday when the Fraser Institute released its "business case" for the carbon dioxide "backbone" pipeline from the tarsands to a bunch of old Alberta oilfields like Pembina and Swan Hills/Judy Creek.
This is the magic wand technology first dreamed up by Ottawa Liberal Leader Stephane Dion - but later endorsed by the Stelmach government - to pump oil-sands plant emissions down oilwells to hopefully enhance recovery, and solve global warming, all at the same time.
The price tag going in is $1.5 billion with none of the engineering actually done. So you can bet your mortgage that it will be at least triple that amount.
The right-wing think-tank determined that "current demand is very small."
And no wonder, considering these target oilfields are up to 50 years old, and there will be more than enough COC generated from Edmonton-area upgraders to satisfy that market.
Which led study authors Gerry Angevine and Dara Hrytzak-Lieffers to conclude that building the pipeline "does not make sense from a business perspective," and "cannot be justified on the basis of the economics." But more to the point: "public support for a backbone project does not appear to be justified."
Except that's clearly the direction the Stelmach government appears to be headed and in all likelihood the Backbone Pipeline will end up joining the wrecks from the bad old Peter Lougheed/Don Getty days like NovAtel and the Canadian Commercial Bank.
Which is what the Cameron Strategy poll seems to be already signalling.
Edmonton Sun, Fri June 1 2007, Page 54
Byline: Neil Waugh
Changes to royalty regime could threaten viability of natural gas; Industry appeals for status quo as it struggles with exploding costs
CALGARY - Wholesale changes to Alberta's royalty regime could threaten the viability of natural gas production in the province and raise rates for consumers, industry insiders told the Alberta government's Royalty Review Panel meeting in Calgary Wednesday.
Rising costs, falling prices and an uncertain regulatory environment are already leading to reduced rig counts, lower production and ultimately, lower government revenues, said Tailisman Energy Inc. CEO Jim Buckee.
"You have a zero-per-cent royalty you get zero; with a 100-per-cent royalty you also get zero," Buckee told the province's travelling review panel. "The current regime has worked and is best left alone."
Where previous sessions have focused on the government's share of oilsands revenues, Wednesday's discussions revolved around conventional royalties and how they relate to natural gas.
Buckee argued higher royalties would discourage activity at a time when high costs and falling prices are putting the bite on an already margin-squeezed segment of the oil and gas business.
According to the Canadian Association of Oilwell Drilling Contractors (CAODC), 107 of 885 rigs were working this week, down from 342 active rigs at this time last year.
Likewise, the number of new well licences issued by the province are off a third from last year.
According to Buckee, declining field activity is a leading indicator of the overall economic viability of natural gas.
Talisman, along with Canadian Natural Resources Ltd. and EnCana Corp. earlier this year reigned in gas spending in response to higher costs and lower prices. An additional financial load in the form of higher royalties will inevitably lead to lower drilling, lower production and in turn, lower government royalty payments.
If major oil companies balk at paying higher royalty rates on oilsands projects, then the Alberta government should consider developing the resource itself by working in equity partnerships with more co-operative companies, says Gil McGowan, president of the Alberta Federation of Labour.
"I think we should learn a lesson from other oil-rich jurisdictions, especially Norway. And that lesson is that if private sector firms aren't willing to develop our resources in the public interest we shouldn't be afraid to do it ourselves. Royalties are one way to guarantee returns for the public, but ownership is another."
McGowan's remarks were made as part of his presentation to the Alberta government's the government panel.
The hearings continue through today.
Oilsands pipeline to U.S. a job killer: labour group; Study says 18,000 jobs in the balance
The head of the Alberta Federation of Labour says TransCanada Corp.'s proposed Keystone pipeline to the United States is a job killer that needs to be stopped.
In a submission to the National Energy Board, labour federation president Gil McGowan said the proposed 3,000-kilometre pipeline to the U.S. Midwest is not in the public interest because it would export refining and upgrading jobs from Canada, where the oil is produced.
"Canadians should be getting the greatest value for their resources," he said.
"The Keystone project falls well short of providing maximum value in the areas of jobs, economic opportunity and long-term economic and energy security."
According to a study by the economic consulting firm Infometrica, the labour federation insists 18,000 jobs would be created in Canada if bitumen was refined in Alberta instead of being shipped to the U.S. on the proposed pipeline.
"If Keystone goes ahead, we will miss a once-in-a-lifetime opportunity to create a broad, healthy, value-added, and research industry centred around a rejuvenated refining industry, McGowan warned.
Instead, "billions of dollars will be spent to retool and renovate current refineries in places such as Illinois and the American Gulf Coast."
If approved, Keystone would transport some 435,000 barrels a day from Hardisty, near Edmonton, to refineries in Illinois.
In February, TransCanada received National Energy Board approval to transfer assets from its main natural gas line to a subsidiary that would operate Keystone.
In December it filed a formal application to build the line and National Energy Board hearings seeking approval to construct and operate the Canadian facilities are scheduled to begin on June 4.
TransCanada spokeswoman Shela Shapiro said the company doesn't comment on intervenor submissions or the regulatory system.
"We're aware they have filed and it's part of the process," she said.
But David MacInnis, head of the Canadian Energy Pipeline Association, said at least 450,000 barrels a day of new pipeline capacity is needed by 2009 to avert slowdowns and job losses in the burgeoning oilsands sector.
TransCanada, along with Enbridge Inc. and Kinder Morgan have put forth proposals to increase oilsands export capacity to the United States.
Although MacInnis wouldn't comment on the merits of any specific proposal, he said CEPA supports "market-backed solutions" to add new pipeline infrastructure and alleviate what he said is a looming capacity shortage.
He further suggested that upgraders planned for the Edmonton area over the next several years are threatened by a lack of skilled labour.
"With all that construction, I don't get the sense anybody is worried about losing jobs. In fact the opposite is true."
He said the labour federation's call for a moratorium on future pipeline construction would threaten oilsands growth and actually cost jobs in the long run.
"The AFL need to look in the mirror," he said.
"The short story is that these oilsands pipes create jobs. If they get their way, they will absolutely devastate the economy.
"There will definitely be shut-ins in production at oilsands plants . . . that's what's going to kill jobs."
Calgary Herald, Tues Apr 17 2007
Byline: Shaun Polczer
Labour spokesman wants premier to live up to promises
In the Old West, calling a man a coward was a shooting matter, and "Mr. Colt" usually had the final word.
It's unlikely, however, Alberta premier Ed Stelmach is toting a six-shooter or that he would even care if Gil McGowan, president of the Alberta Federation of Labour, would have called him a chicken-livered yellow belly.
Stelmach might pay attention, however, if thousands of Albertans did.
McGowan, who spoke Thursday in Lethbridge at a session of the Southern Alberta Council on Public Affairs, said Stelmach has lost his nerve and he wants Albertans to help him get it back.
The premier has backed down to big oil companies and is not, despite promises during the leadership race, doing anything about low oilsand royalties, out-of-control development and the shipping of raw bitumen out of the province, he said.
"Based on his performance so far, it seems that our new premier either didn't mean what he said during the leadership race when he promised to turn a page on the Klein era, or that he's lost his nerve," McGowan said.
He said he's prepared to give Stelmach the benefit of the doubt and assume he's lost his nerve. So he's driving a campaign to help the premier get a backbone.
"My goal is not to unfairly criticize the premier or to paint him as some kind of villain. Instead, my goal is to convince Ed that his initial instincts were correct and that he shouldn't backslide on the promises he made during the leadership campaign."
And if enough Albertans speak out, McGowan believes Stelmach will realize maintaining or only tweaking the status quo of the Klein era is not acceptable.
McGowan pointed out during the leadership race Stelmach said the one-cent-on-the-dollar royalty introduced and maintained by former premier Ralph Klein is too low and needs to be increased.
Stelmach also said it's not in the public's interest to let energy companies ship vast amounts of raw oilsands bitumen out of the province without refining or upgrading it, and he promised to do something about skyrocketing house prices and the rapidly rising cost of living.
"Those were the positions taken by candidate Stelmach, but it's amazing what a difference a few weeks can make. Today, the messages emanating from the premier's office sound a lot different from the ones that we heard . . . on the campaign trail."
McGowan said Albertans should be angry oil companies only pay one cent on the dollar for the right to exploit Alberta's resources, especially when the rate was designed to encourage investment when oil was selling for only $15 barrel.
"You should be mad because energy companies raked in more than $15 billion in oilsands revenue last year, but paid only about $700 million in royalties; less than the province collected from gambling.
"You should be mad because all that revenue that we've forgone as a result of the one-penny royalty could have been used to strengthen our health-care system, fix our crumbling infrastructure and to educate our children and grandchildren."
In addition, McGowan said Albertans should be angry because Canada's two biggest pipeline companies are raising billions of dollars to build huge pipelines with only one purpose; to take unrefined bituman from Alberta for processing south of the border. That means thousands of potential refining jobs will follow the pipeline into the U.S. And the jobs that are being created are given to temporary foreign workers who, in turn, are being used as pawns to lower wages and as an excuse not to train workers at home.
McGowan said Albertans need to tell Stelmach to do five things: block construction of the bitumen pipeline; guarantee a fair return for oil resources by scrapping the one-cent royalty; introduce leases for oilsands properties that require energy companies to create jobs in Alberta; tighten rules for temporary foreign workers; and to regulate the pace of oilsands development so there is more time to address the economic and environmental implications of development.
Lethbridge Herald, Feb 9 2007
Byline: Delon Shurtz
Raise oilsands royalties - Pembina: Low rates put 'economy on steroids'
Albertans deserve a larger return on their vast oilsands, a provincial committee seeking input on how to best develop the resource heard Wednesday.
The Pembina Institute for Appropriate Development argued that it's time for the province to revamp its royalty rates for oilsands even though oil companies warn changes could mean that Alberta could lose out on projects.
"Government leaders need to take a long-term approach to resource development and recognize that despite threats to reduce investments in the oilsands if fiscal policies are changed they are unlikely to walk away from the second largest oil deposit in the world," said Pembina spokeswoman Amy Taylor at the first day of hearings in Calgary.
The 19-member committee has been travelling the province to hear from Albertans on oilsands development. The hearing continues today at MacEwan Conference Centre at the University of Calgary before heading to northern communities next week.
A report on the panel's findings is expected in November.
The institute is advocating an immediate increase in royalty rates for new oilsands projects and a phase-in for existing ones. Currently operators pay one per cent of gross revenues until capital costs and a return allowance are recovered, after which the rate jumps to 25 per cent.
Originally designed to spur oilsands investment, Taylor said the royalty program should be reviewed with public input considering the level of investment currently being poured into the projects in Northern Alberta, where production is slated to triple to three million barrels a day by 2015.
"Oilsands are no longer considered a marginal resource," she said.
Gil McGowan, president of the Alberta Federation of Labour, likened the oilsands royalty regime to "putting the economy on steroids."
He said the province will continue to lose out on revenue as project costs continue to soar due to high demand for labour and equipment.
"The more expensive a project gets the longer we have to forego revenues," he said.
Other speakers who registered for a 15-minute opportunity to address the community said the government should slow development to curb the growth of carbon dioxide emissions and other negative environmental impacts.
Industry representatives also raised the point that the province must invest in the communities to help support the growth in the oilsands industry. Bill Clapperton, a vice-president with Canadian Natural Resources Ltd., said oilsands operators do their part by providing revenue through royalties and taxes as well as more jobs for the economy.
"The needs for infrastructure in the municipality are urgent in municipality of Wood Buffalo and Canadian Natural believes the government must maintain their traditional as helper and operator of public infrastructure," he said.
Calgary Herald, Thurs Sept 28 2006
Byline: Lisa Schmidt
Alberta to form farm safety advisory body
A provincially-backed farm safety council is expected to find ways to reduce the number of on-farm injuries in Alberta without adding more rules or more costs.
The Alberta government on Tuesday announced it will name a farm safety advisory council in the new year, to be co-chaired by "government and industry" with members from farmer, farm worker and farm safety groups and Alberta municipalities.
"This council will bring industry and government together to find ways to reduce farm injuries without increasing the regulatory and financial burden on our producers," Agriculture Minister Jack Hayden said in a release. "We need to work together to find solutions."
Once it's set up, the province said, the council is expected to develop a "joint industry-government action plan" on farm safety for submission to Hayden and the government, addressing the "co-ordination and communication needs" that the ag industry noted in recent consultations.
That's a reference to consultations by the province's ag and employment departments in 2009 and 2010 with stakeholder groups, including "all of the major commodity groups," on ways to enhance health and safety for people working on farms and ranches.
A report on those consultations put forward a number of recommendations for the province to consider -- such as incentives for farms through lower Workers' Compensation or crop insurance premiums, or increased grants to agricultural societies that undertake health and safety activities.
In Alberta, the report noted, most farming- and ranching-related operations are exempt from the province's Occupational Health and Safety (OHS) Act, meaning there's no formal OHS investigation of a farm fatality and no government investigation of on-farm injuries for purposes of improved safety practice or third-party reports for insurance claims.
Farming and ranching are also exempt from the Workers' Compensation Act, and while Workers' Compensation Board (WCB) coverage for disability and insurance is available to farmers and ranchers for their employees on a voluntary basis, "costs limit subscriptions," the report noted.
"Empty gesture"
Also, the report noted, the province's Employment Standards Code exempts farm workers from standards on hours of work, overtime, general holiday pay and vacation pay. Farm workers are also excluded from the Labour Relations Code.
The Alberta Federation of Labour on Tuesday criticized the province's proposal for an advisory council as an "empty gesture," with AFL president Gil McGowan predicting the council "will be an industry-dominated joke."
"In the nine years the Alberta government has said it is consulting on how to improve safety for agricultural workers, 160 people have died on farm worksites," the AFL said.
In his 2008 inquiry into a farm worker's death in 2006 in a silo at a High River-area feedlot, Provincial Court Judge Peter Barley recommended the province lift its exemption excluding farms' paid workers from workplace safety regulations.
"Rather than take that obvious and simple step, we have an industry-dominated advisory body looking at education measures," McGowan said Tuesday. "This is what you get when governments talk only to the business community and not to workers."
The labour group also scoffed at the notion that protections such as employment standards and OHS rules would punish family farms.
"Large agribusiness" dominates the industry, the AFL said Tuesday, with farms of over $250,000 in income accounting for three-quarters of farm cash receipts in 2007.
Country Guide, Wed Nov 24 2010