Greed Is Catching

From playground to battleground

Oilpatch attitude shifts since Alberta's 'reform' proposal

Kevin Libin, National Post

Published: Saturday, October 13, 2007

CALGARY -You don't normally hear complaints in this part of the world when a major energy company readies to post a healthy profit. But there are nervous whispers in the oilpatch this week that Calgary-based Encana Corp. may be releasing a third-quarter report late this month that threatens to be -- brace yourself -- quite good. Some people are terrified.

"God, I wish they could delay it," worries one trader over an after-work beer. "I don't know if they can, but it would be so cool if they could just wait."

From the office towers to oilfield service shops provincewide, these are ominous times. Since an independent panel, struck by Premier Ed Stelmach, reported last month that Albertans were being robbed of their "fair share" of energy royalties, instructing government to skim 20% more from oil and gas produced here, the place feels less like the capitalist playground it's reputed to be and more like a class-war battleground. For traders and oil execs, the prospect of Alberta's petroleum titan posting plump profits for the last three months, just ahead of Mr. Stelmach's decision on whether to accept the recommendation, likely means more fuel to fire this October Revolution.

When the province's report was tabled, disappointed Deutsche Bank analysts branded Alberta a new "Bolivarian Republic," after Hugo Chavez's socialist Venezuela. Local pundits called it an unfair shot. But judging by letters flooding into local papers -- writers calling on Albertans to "take back control of this province," "take a stand against the gluttony and greed of big oil," demanding the province not "bow down to these corporate fat cats," and complaining "our dreams are being incinerated" by rapacious oil companies -- it seems those backing the bigger take are the ones eager to make this a Bolshevik moment. In a recent Globe and Mail op-ed, Andrew Nikiforuk, a prominent Alberta author and rural activist, publicly denounced "Calgary's truffle-eaters" and their "servile attendants" in the media, while the University of Alberta's Parkland Institute is pushing to outright nationalize the oilfields. A Leger Marketing poll last week showed that while half of Albertans surveyed say squeezing energy firms harder will "hurt the Alberta economy," 88%, perhaps wishing to make a point, want to do it anyway.

Mr. Stelmach sought to ease the industry's fears this week in a closed-door session where he suggested he had no intention of upsetting investors. But the damage may be done. "As far as investors go, and foreign investors, I think they're in a state of shock that one of the best places to invest in North America has had this sudden change of attitude," says George Gosbee, head of investment firm Tristone Capital Inc.

Some blame the revolutionary vibe on Bill Hunter, the former lumberman heading the review panel. His report, "Our Fair Share," is peppered with reddish rhetoric. "It's like Che Guevara had a hand in writing this," says Faron Ellis, a Lethbridge College political scientist. Mr. Hunter recently told corporations that if they didn't want Alberta's energy under his terms -- several have promised, if the plan is implemented, to cancel projects totaling billions -- they could "leave it in the damn ground."

Alberta has seen anti-industry populism before: Social Credit's Bill Aberhart won elections vowing to fight the "Fifty Big Shots" -- eastern bankers, industrialists, politicians -- creating Alberta's "poverty in the midst of plenty." But that grievance was genuine, argues Mr. Ellis. These last few years, however, have been the best any province has seen, ever. And it isn't at predatory outsiders that Albertans are shaking their fists, but local interests -- Encana and Syncrude, among others --energy firms employing much of the province (roughly 30% of Albertans get their pay directly from the industry; another 20% are just one-step removed).

"I thought this was such faux populism, that the real populism would have emerged by now -- the grass-roots, one-by-one, people whose jobs depend on the oilpatch, their families, and then people with spin-off jobs directly dependent on it -- that public opinion would be changing by now," Mr. Ellis says, baffled. "I'm not seeing it."

If they do the math, Alberta's instant class warriors might find their plunder isn't so rich: Mr. Hunter says the province can annually milk $2 billion more from the oilpatch, or $600 per Albertan.

That won't go far to making the rest of us even with the Bentley set -- assuming we even keep the extra cash: Lips are smacking elsewhere in Canada at the thought of a bigger slice of Alberta's petrol pie.

One Quebec editorial commanded "oil barons pay their share," not so Mr. Stelmach could build his province's Heritage Fund, but because "all Canadians -- not just Albertans -- have every right to benefit from our natural wealth to the fullest extent." Albertans might be surprised to find their greed, once unloosed, is catching