A funny thing happened on the way to the Alberta New Democratic Party government’s oil-patch royalty review: it delivered the right answer.
Premier Rachel Notley and her policy-table wonks figured it out.
Imagine that.
Unless you’re dead, or in Edmonton, the nine-month saga of her party’s campaign promise to review its harvest of low-hanging private-sector fruit to pay for its social programs has unfolded as the global price of oil lost almost half its value since that promise was made.
When elected in May, Notley’s government was compelled to conduct the review or break a key campaign promise (and we know that never happens, regardless of the political brand). That the main commodity fueling Alberta’s economic fire was shut-in by a global glut as this review began was a case of bad timing more than anything. There are some, like those with the Official Opposition, of course, claiming otherwise.
“Our heart goes out to the Albertans who suffered job losses because of the instability caused by calling the royalty review,” Alberta Wildrose leader Brian Jean says in a press release. “The next step is to recover from the damage done by this review and the series of poorly thought out policies that are harming our energy sector.”
It’s Jean’s job to make political hay out of this but, with the review done and inflicting no damaging changes to Alberta’s oil royalty structure, everyone can go back to work, right? No.
Tying a provincial royalty review to local job losses during a global oil price meltdown is like blaming the Titanic for damaging that iceberg. Think about a new hockey coach taking over the Edmonton Oilers and having Jordan Eberle, Connor McDavid, Ryan Nugent-Hopkins and Oscar Klefblom all suffer injuries. (Oh, wait. That happened, and look how well the Oil are doing.)
Globally, the oil and gas industry has shed 250,000 jobs, according to Bloomberg Business. This is not an Alberta-centric concern. The stress is world-wide.
But back to making the “right” decision.
Governments have to navigate though a sea of public opinion, social- and news-media static, rhetoric and opposition foes who take credit for the governing party’s successes while blaming it for all the failures. In this environment, Notley’s group has to assess its goals, the needs of its constituents and work with what is available. It has to be resolute enough to stick to its core political agenda while being nimble enough to have that agenda succeed in the sphere of external forces out of its control.
In its royalty review, the current Alberta administration examined the economic landscape and determined drilling a dry well for more product was not the answer.
It is a decision the oil industry, and even Jean, agree with.
“l am grateful the panel agreed with Wildrose’s position to provide stability in royalty rates for our energy sector, and that Premier Rachel Notley accepted. Alberta needs to start seriously evaluating how to restore our competitiveness on the world stage.”
As Jean rightfully points out, Notley’s NDP government and its primary economic, private-sector partner are now examining ways to proceed with that serious evaluation.
