REMEMBER WHERE you are today.
On this day—20 April 2020—Western Canada Select was valued at less than zero. Our primary resource is now priced like excess trash bags (producers have to pay to have it retrieved and stowed away).
The coronavirus has pushed the envelope on just about every thing imaginable, but negative dollars for Alberta oil?
Is the unthinkable the new normal? What if it is?
It’s not like Albertans haven’t been forced to make some tough decisions lately. Unless what you do is deemed essential, you’ve been asked to sequester yourself—shut-in your home—out of harm’s way.
SHUT IN BUT NOT SHUT DOWN
It’s time to shut-in the oil industry because, well… because “it’s neither here nor there,” says Don. The enterprise is in limbo. And being stuck in limbo can be hell. Talk to anyone in the petroleum business in the province and that’s how they describe the present conundrum.
What’s playing out in Alberta’s oil economy is weirder than a dystopian novel with interchangeable villains & heroes depending on your ideology. Even speculative fiction author Philip K Dick couldn’t make this up: a national economy backstopped by hydrocarbons crashes, and a federal government in never-neverland—Trudeau (the younger) and his Liberals—that engineered the debacle in the first place offer up $1.7 billion to oil workers to clean up Alberta’s mess (inclusive of Saskatchewan & BC).
Uh-huh…
And then there’s fear. You can smell it in Calgary’s Bankers’ Hall.
Will lenders have the patience to wait and see or will they bankrupt oil companies? Right now, everyone in the sector is scrambling to hear what Export Development Canada and Business Development Bank of Canada terms are for guaranteeing portions of loans for mid-sized oil companies.
TIME TO SHUT UP
Alberta lost the ideological war against climate change advocacy and activism. Yes, lost. That’s the truth of it. And we’re grieving—big time.
Get over it.
If you need to console yourself, okay. You—we—fought the good fight.
Feel better? Now shut up about it.
THE 20TH CENTURY DIED IN 2020
Whether you think it’s the end of an era or an error, as of today, things are going to be very different for the oil & gas sectors in Alberta. Let’s accept this as fact and move on.
Imagine a future without the petroleum business as the lead pony. Dragging out the inevitable simply extends the pain.
To build out Alberta for the 21st century, we need to embrace builders & inventors, not consolidators & bureaucracy. Encourage ambitious leadership, not administration hiding out behind a desk. Let’s move beyond the ideological energy battles of the past (especially the faux duality of Green vs. Hydrocarbons) and focus on the next economy–an economy that is digital not analog.
NO LAMENT FOR A PROVINCE
Political philosopher George Grant wrote Lament for a Nation, over a generation ago. It was an anxious screed, more or less saying Canada was doomed. And if it’s any consolation, he was right in a fashion. His version of Canada did expire. And it could be argued it was long past its due date.
Admit it.
Sustaining the status quo in Alberta isn’t all that exciting. The last six years have been anxious ones and it’s time to dislodge ourselves from the shut in but not shut down purgatory.
Maybe we can still get natural gas to tidewater and export liquefied natural gas to places like Japan and China to displace coal (with carbon credits as upside). Maybe it’s time to seriously talk about building refineries in Canada and becoming more self-sufficient. Maybe it’s time to scale up other value-add projects along the hydrocarbon value chain. If so, let’s assign these opportunities necessary political and technical attention and decide.
HIT THE ONCE-IN-A-GENERATION RESET BUTTON
More than anything, it’s time to hit the once-in-a-generation reset button in Alberta and build out a new economy. What exactly that’s supposed to look like, let alone how it can work is up to you.
Here’s what we think needs to be re-imagined:
(i) our export-focused resource economy;
(ii) the ways we work, educate & train people;
(iii) how we connect across digital platforms.
And while we cannot know exactly what comes next, the pandemic coupled with a worldwide glut of oil that’s not going away anytime soon, forces us to embrace something out-of-the-ordinary and reject the laziness of business as usual.
Your ideas are extremely important now.
As Brion Gysin, the influential modernist who spent his formative years in Alberta once said (and might say again given our current predicament), “Nothing is forbidden. Everything is permitted.”
Don’t second guess yourself.
Comment below or drop us a line. We’re up for most anything that reads well and we’ll include your thoughts in future blog postings.
This column is the consensus opinion of the writers Donna Kennedy-Glans & Don Hill. If you haven’t already, please subscribe to BEYOND POLARITY — scroll down on your phone or tablet, or look to the right in the panel beside this post. Enter your email to FOLLOW, a wheel spins, hamsters get fed.
No doubt your ideas, though rather general, are worthy of consideration, but I had to read through paragraphs of hyperbole to get there. I suggest you put your ideas forward in a more succinct and straightforward manner so that I, and perhaps other readers, don’t have to waste time wading through drivel. As for being “Beyond Polarity”, your remarks regarding the current Federal Government belie that moniker. The fact that Alberta is burdened with the clean-up of an overwhelming number of orphaned wells is due to decades of Provincial Mismanagement—rather conciliatory of the Feds to step forth with some money for clean-up.
You are right Donna – it is time to set the reset button.
I offer the following advice to any political party that agrees that Alberta has underling sectoral strengths and urgently needs an industrial strategy made up of at least 25 detailed sub strategies . We are much more than oil and gas when the curtain is pulled back.
1) List all our industries – I chaired a committee 25 years ago under Premier Klein that listed 25 viable diverse Alberta industry sectors. We worked closely with the Premier’s advisory committee. I left shortly after we tabled our report and have no idea what happened to it. Our Economic Development Department staff were reduced by 40 % at the time I left. We called ourselves graduates of the Steve West School of Economics.
2) Assign knowledgable government sector specialists and market specialists to work with relevant industry associations to come up with a 10- 20 page strategy for that sector.
3 ) Write up a brief description of each sector- # of firms, size of firms, key strengths and weaknesses , future opportunities for growth, how we compare to other Provinces and Countries in that sector
4 ) Focus on what can be done that does not need much if any government financial support – deregulation , re – regulation, joint marketing, export promotion events, cooperative research and tech efforts, investment attraction, training needs, manpower needs, adjustments to existing programs etc.
5 ) Consult extensively with the Federal Government – several relevant Departments . There are industry experts at Industry Canada, International affairs, Forestry, Agriculture, Multiculturalism, Healthcare , National Research , Energy, Tourism, Environment, Housing, Public Works and Infrastructure, Aboriginal Affairs etc. and tap into their knowledge and their programs. I always found them easy and enthusiastic to work with.
6 ) The most important thing is to get buy- in from Alberta industry. groups and their key members. Industry appreciates one point expert contacts in government. They can bring in their national associations.
The end result is a detailed Action Plan with real things to accomplish on a sectoral basis. Moral also picks up in the Alberta Public Service.
Political buy-in is vital as is a belief that Industrial Strategies work in this competitive world. Study Singapore, S. Korea, Denmark, France, Germany, Austria to name a few.
If our Politicians and their advisors believe that the economy works best if government just gets out of the way , I ask them ” How is that working for you so far ? ”
Murray Rasmusson
Murray, I agree with much of your comment. I would, however, disagree with your point 5) insofar as the federal government has shown itself to be absolutely intolerant of our main industry, resource extraction, and it has colored much of their commentary and actions.
I agree that the feds have some very skilled people, many of whom are entirely benign in terms of their hostility to we here in Alberta. However, however, there are the others, most of whom reside at senior levels in the bureaucracy. As a result, I recommend that any involvement of federal departments and the like be at a remove and simply as a remote resource.
Quite simply, the feds have made it clear that we are in this on our own and that means that we must go forward using our resources and skills. I think it fine that we look to others for ideas and inspiration – just as we might look at folks in the US or the UK, for example, but the people who populate the Ottawa ecosystem are, as a whole, not terribly interested in us so we cannot depend upon them.
Thanks Ken – I agree resource extraction relations have been rather bumpy. The Officials usually take their direction from their political leaders. There has always been a grey area on Environment. I was with Alberta Environment in 1974 when Syncrude was approved. We did our very best to keep them off our doorstep but they usually had the Fisheries Act and the Navigable Waters Act to claim some jurisdiction. More recently the carbon tax and the pipeline approval process has been a nightmare , I agree. Certainly, opposition to fossil fuels generally and our oil sands specifically has been substantive in Canada and the USA. Nevertheless, lets look at where we are today , put past F/P grievances aside, and look for a way forward. Certainly, the worldwide soft demand for oil calls for recalibration by industry and government. In Alberta’s case it is urgent that we all look for other options for our kids and grandkids. When I graduated from U of A in 1970, there were few jobs in Alberta. Most of us had to go outside the Province for work, me included. I hate to say it, but I think we are there again unless our other sectors can rise to the occasion.
Thank you Donna, for having the courage and initiative to stimulate all of us to reset
Eilis Hiebert
That was rather refreshing!
Could you enlighten readers as to how: “Liberals–that engineered the debacle in the first place..” because the way I see it is the causes are global, national and provincial.
Ummm — yes, and know, Jim. Trudeau (the younger) was/is informed by Gerald Butts. The result of this extraordinary relationship was a Made-in-Canada environmental policy toxic to private investment, albeit a nod to Mr. Butts’ fellow travellers — activists and advocacy hostile to hydrocarbons — zealots who think nothing of Saudi oil rolling along the St. Lawrence… Trust you’re now enlightened.
Very intriguing post Donna. Thanks for writing it. I’m sure there will be many conversations over this during the next while.
Thanks Donna
Well said. Although the petroleum industry was an economic boon to Alberta for decades, every arrow of change is pointing in new directions.
My add-on: Petroleum will still be needed for yet quite a while. Rather than bemoaning the past, OPEC in-fighting, whether alien agents are funding the Greens, let’s formulate a provincial renewal strategy. There are lots of exemplars of cities and states which have made the transition.
All it is is just chatter. Let’s talk about Alberta moving forward when the people aren’t. Great ideas that someone else needs to finance and figure out and buy and maybe we will go to work it it pays enough. What are you doing personally. Oh your the idea person. All talk no action great we need more of that.
Charles, behave yourself. You’re adding zero to the intent of the post (other than noise). If you have a business ‘idea’ that pays and pays and pays, well… let’s hear it. Otherwise, stop the kvetching, and pick up a snow shovel if need be… Winter is coming.
Here are some rather inconvenient facts for you. https://blog.friendsofscience.org/2020/04/22/inconvenient-facts/
Michelle, you’re preaching to the wrong choir. I understand implicitly the ‘facts’ of this, that & the other thing you post as a ‘friend of science’. What’s missing (and continues to be missed by governance, leadership, and the business community in our province — the legislature, C suite, E suite, and low-calorie management) is how global _realpolitik_ is played. And we have most certainly been ‘played’. Your facts don’t matter, Michelle. The Economy of Attention is what counts — oodles and oodles of dollars for advocacy, activists, and useful idiots — gaming the facts to attract a crowd to pooh-pooh that ‘tar’ sand stuff that’s far, far away. Click-click-click… Spend an hour-and-a-bit with Planet of the Humans >> https://www.filmsforaction.org/watch/michael-moore-presents-planet-of-the-humans/ << even a hard-core 'greenie' says we've been played. But that changes exactly nothing in the months, years ahead for Alberta's hydrocarbon industry, unless, of course, we ditch the notion of an export petroleum economy and get down to the business of energy security in Canada.
Ah, “Friends of Science”…
At the end of the day, which group seems like the one with the agenda? The diverse group of the majority of scientists from around the world who collect and interpret data under limited budgets and who just so happen to agree on several major points? Or the group with ties to the petroleum industry that admits to pushing a particular slant on scientific data that is advocating against environmentally-responsible policy, which would hurt said petroleum industry?
“Alberta lost the ideological war against climate change advocacy and activism. Yes, lost. That’s the truth of it. And we’re grieving—big time”. First of all, climate change is a fact which is something that many in this province still fail to accept. Secondly, you should tell that to the climate change advocates and activists. If that were the case, this province would look very different because we have done something about the tailing ponds and the abandoned oil wells. If we lost that war, it is because the facts were more on the side of the activists then they were on the side of the industry. If they can’t convince the population of the merits of their side of the argument with all of the money and assistance from the like-minded think tanks like the School of Public Policy, the Fraser Institute, and the news media, then they have to look at what substance of their arguments. Frankly, I won’t be weeping too much here!!!