THE HEADLINES signalling what’s ahead on CBC’s The National couldn’t have said it better. The radio promo led with the Democrats move to impeach Donald Trump, and the second huge story of the day—the biggest story of paramount national interest: due to inclement weather, there’s to be no hallowe’en in Montreal.
That business story of the day—an economic tale of woe—heralds the end of an era for Canadian oil & gas (or the end of an error, if you follow the logic of the CBC and its news-desk editors). A high profile company has given up on Canada’s financially-starved, beleaguered & stagnating petroleum sector. Full stop.
Encana is part of the exodus of the 30-to-40 service companies lured to Texas over the last couple of years. Tax breaks in Alberta, while nice, only matter if you’re making money. Encana’s exit is the visible part of the iceberg. Will other companies soon consider pulling the plug on Canada and Alberta?
IT’S A POLITICAL STORY
The outcome of the federal election exposed a stark political divide in our country. And smart business people from outside the province, including Encana CEO Doug Suttles (a Texan) are no longer willing to play The Canada Game, or wait out the uncertainty. They are going to where people say yes.
Encana gave it a week after the October 21st federal election to make their head-office relocation announcement; Husky Energy (controlled by Hong Kong billionaire Li Ka-Shing) chose to announce massive layoffs in Calgary, the day after on October 22nd.
IT’S A HUMAN STORY
Depending on who you talk to within the company, this is either (a) nothing more than business as usual for Encana employees & contractors (Denver has been the company’s defacto head office for a while), or (b) monumental — massive layoffs and shutdowns in Alberta are imminent. We’re all too familiar with the human story: job uncertainty, financial insecurity, personal stress and family suffering.
IT’S AN IDENTITY STORY
Encana is a Calgary-based energy company created through the merger of two companies with very deep roots in this place we call home: PanCanadian Petroleum (PanCanadian) and Alberta Energy Corporation (AEC).
PanCanadian was launched decades ago when the Canadian Pacific Railway rolled its sub-surface rights to oil & natural gas into an energy company.
AEC was created by Premier Peter Lougheed’s government in the 1970s, in response to ‘made in Canada’ oil & gas prices dictated by Prime Minister Trudeau (the elder) in a time of energy insecurity.
ALBERTA’S ENERGY STORY
We interviewed Jim Gray, one of Canada’s celebrated oilmen and in the early days of Lougheed’s leadership, a keen, young geologist. Jim shared the remarkable tale of how the Lougheed government launched AEC in 1973 as an oil and gas company built & owned by Albertans to pre-empt the federal government’s attempts to control Alberta’s emerging energy business. (The National Energy Program would come nearly a decade later.)
The AEC story is only one chapter in our province’s energy story but it’s a powerful one. It’s a story of a people with chutzpah, ingenuity and resiliency.
THE SUFFIELD BLOCK STORY
JIM GRAY: “I had quite a bit to do with Peter [Lougheed] and I was not in the caucus; I was not an elected member….But there’s one story and that is the Suffield Block, a thousand sections in southeastern Alberta, down by Medicine Hat and it’s covered with shallow gas….
“Back in those days, which was 1972, 73. There was the ‘surplus test’, in other words we had to put so much gas away for the next 21 or 25 or 30 years for local and Canadian use and then export the surplus. And that’s why it was called the surplus test. Well there was gas throughout this block and I mapped about a trillion and a half which is a lot of gas. And I took it up to Peter and I said this is the gas we should reserve for future generations and it should kick out an equivalent amount for export and value today.
“It was a Saturday. Gordon Pierce was with me and there were just three of us in Peter’s office. And I went through the maps and the Buffalo was on the top and various other fields. And Peter bought it instantly. And Don Getty was intergovernmental affairs at that time and he was working on this Saturday. So Peter asked him up and he said Don… I will write a letter to the Prime Minister, I’d like you to write a letter to your corresponding person in Ottawa that we want to have access to the Suffield block because…the province of Alberta is wanting to drill 44 wells on this 640 thousand acres in order to prove up the gas which is ours.
“The people of Alberta owned the gas, we had leased out the surface rights; the British army was using it; went right up into the Sandhills which was an environmentally sensitive area. And Peter made that decision on Saturday morning and put it in place.
“He didn’t have any any idea what were going to talk about before we got to the meeting. He [Lougheed] was able to grasp the the essence of what we were talking about. He was able to prioritize it. He was able to see that it was a slam dunk.
“That it was a huge amount of gas and it was that the people of Alberta owned it. He had no concerns about the government of Alberta drilling the 44 wells and he started the ball rolling.
“All in the space of maybe three hours…that always impressed me because that was the founding of the Alberta Energy Company… Now there’s wells all over the block, but at that time there wasn’t a single well on the Suffield block. And it was quite revolutionary and Peter saw it, grasped it, and made a decision in three hours.”
Encana’s decision to change its name to Ovintiv and move head-offices from Calgary to Denver prompts what ought to be a collective reflection: Did we drop the ball somehow?
This all happened on our watch.
“What will our province look like if even more of our icons move south?” Don wondered out loud. “Imagine if the Southern family relocated the ATCO dynasty…”
“But ATCO and a whole host of other Alberta companies are run by people who actually live here,” says Donna. “So maybe we can just relax. Although, hmmm… I don’t want to sound parochial…”
Don interrupts: “Does being parochial even matter any more? Seriously: Is America not parochial right now? How about the Germans are they not parochial right now? China not parochial—right now?”
AN IDENTITY CRISIS
A piece of our shared history—a piece of our identity, a part of our story— just left the province.
And what a story it’s been, thus far!
A resilient prairie people able to transform mineral rights tossed our way by a national railway (the CPR) into an exciting new economy.
Albertans willing to invest in our own energy company (AEC) and stand up to Ottawa.
So now what?
Nature abhors a vacuum. And if we no longer have a story we can agree on—a story to live inside—it creates the conditions for another story—a story not of our own making to fill the void.
Who we are as Albertans is the story to watch for in the weeks ahead.
This column is the consensus opinion of the writers Donna Kennedy-Glans & Don Hill
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