Big oil running the show

Big oil running the show

Written by Mark Sandilands

Wednesday, 12 May 2010

According to a recent report from Associated Press about the oil spill disaster in the Gulf of Mexico, BP somehow avoided submitting a plan in 2008 for handling a blowout. This illustrates how big oil companies can get governments to bend to their will. Here in Alberta, a recent example of this phenomenon is the oil royalties issue. Some highlights: • 2006: all PC leadership candidates call for a royalty review • February 2007: Premier Stelmach appoints a Royalty Review Panel; • September 2007: The Panel calls for increased royalties; • October 2007: Alberta’s Auditor-General Fred Dunn says in his annual report that the Alberta government knew as far back as 2004 that Albertans could collect at least another $1 billion a year from the oil industry; • October 2007: Stelmach increases royalty rates by 20 per cent (25 per cent less than the panel recommended); • February 2008: It comes out that the Royalty Review panel was not given all the data — data indicating royalties could be increased without harming the economy; • March 2008: Stelmach announces a five-year royalty break worth $237 million per year. And on it goes. There are two story lines to the oil and gas royalties issue: 1. Stelmach changed the oil royalties at the absolute worst time — when the prices were plummeting, causing the oil industry in Alberta to flee to other jurisdictions where royalties are lower, making the economic slump in the Alberta oilpatch worse than otherwise. 2. The oil companies were outraged that Stelmach and company and decided to punish him. First, they pulled out of Alberta — their huge profits allow them to lose a bit of money and the loss is worth it to teach Stelmach a lesson. Second, they pull donations from the PCs and funding an upstart further-to-the right party, the Alberta Wildrose Alliance, which promises to give the oil companies what they want. What’s the effect of all this on Albertans? Less money for health care, long-term care, etc. Cataract surgery is pulled out of Lethbridge and long-term care facilities are closed in favour of DAL where costs are carried by families. If you’d like to hear more about this topic, plan to attend one or both of the talks by Brian Mason, leader of the Alberta NDP: Thursday at 10 a.m. at the Lethbridge Senior Citizens Organization.  Title: Good Health Care and Royalty Fair Share. Thursday at 7 p.m. at Southminster United Church Thursday.  Title: Good Health Care, Long Term Care and Royalty Fair Share.