Big chair, big decisions: Time for Stelmach to decide whose side he's on - Alberta workers or global oil companies

I honestly didn't want to start criticizing Ed Stelmach before his official swearing-in ceremony on December 15.

Just common courtesy, I told myself. Give the guy at least a day or two to settle into the big chair.

Unfortunately, events of the past week have made it impossible for me to maintain my polite silence.

It all started with Stelmach's first news conference following his come-from-behind leadership victory.

Stelmach told reporters his government will do nothing to moderate the pace of growth in the oilsands.

"There's no such thing as touching the brake," he said, adding he has faith big energy companies will "sort things out" and address concerns about over-heated development themselves.

The big problem with Stelmach's hands-off approach to development issues is that it assumes that big energy companies will "do the right thing." But it's becoming increasingly obvious that corporations doing the right thing for themselves is not the same thing as doing the right thing for Albertans.

The truth of this observation was made painfully clear only a few days after Stelmach's news conference when Synenco Energy President Todd Newton announced plans for his company's Northern Lights oilsands plant.

Instead of building their plant here in Alberta, Newton says Synenco will build it in huge pieces in Asia - China, Korea and Malaysia to be precise - and ship it by sea and river to Fort McMurray.

While Synenco will save money by using low-cost foreign labour, Alberta will loose about 1,000 high-skilled, high-wage construction jobs.

This is the part of the equation that Stelmach doesn't seem to understand.

By encouraging virtually unrestrained oilsands development, our provincial government has created an over-heated market for labour, engineering and building materials. This over-heated market has, in turn, encouraged more and more big corporations to embrace development plans that cut Alberta workers out of the picture.

Synenco is doing this with its hare-brained scheme to float an oilsands plant across the ocean. But other companies are getting in on the act, too. Citing cost concerns, major companies like EnCana, BP and Husky Oil have all decided to build plants to upgrade or refine Alberta oil outside of Alberta.

This all begs the question: what's the point of digging up and selling off our collectively-owned oil resources if the benefits are going, not to Albertans, but to people living in other countries?

It also raises important questions for our new Premier. Will he sit idly by while Alberta jobs are shipped down a pipeline? Will he look the other way while Alberta workers are quite literally being sold down the river?

During the leadership campaign Stelmach promised to revisit Alberta's ridiculous penny-on-the-dollar oilsands royalty. If he's serious, it would be a long-overdue step in the right direction.

He also said he would find some way to encourage energy companies to refine and upgrade bitumen from the tar sands here in Alberta.

But Stelmach can't have it both ways. He can't say he wants plants built here and bitumen upgraded here at the same time he argues all the important decisions should be left with energy companies.

Left to themselves, energy companies will make decisions based on what works best for them and for their global shareholders. The interests of Albertans don't even enter the picture.

Like it or not, if Stelmach is serious about getting a better deal for Albertans, what's needed is a radical shift is the relationship we have with the oil companies that exploit our resources.

As it stands right now, energy companies are the senior partners in our economy - they call the shots and we, members of the Alberta public, get some of the excess cash that spills from their overflowing pockets.

If Stelmach wants to keep the benefits of our oil resources in the province, he's going to have to engineer a role reversal. In particular, he's going to have to follow the advice of former premier Peter Lougheed who said last summer that Albertans have to start "thinking like owners" when it comes to the oilsands.

As owners, we have to remind ourselves that the oil companies work for us, not the other way around. We also have to summon the courage to promote those "hire hands" who do the job the way we want it done and "fire" those who don't. Synenco should be the first one to get a pink slip.

But it shouldn't stop there. As owners we should also be saying "no" to pipelines designed to take raw bitumen to refineries in the U.S.; we should be saying "yes" to royalties that guarantee a fair rate of return for oil companies but return windfall profits to Albertans; and we should be saying "yes" to a new system of conditional oilsands leases that grant development rights only to those companies that and build and process in Canada.

At the end of the day, what Albertans need is a champion - someone to stand up the energy companies, assert new authority and demand a better deal for Albertans.

Does Ed Stelmach have the right stuff? Will he choose to take the side of ordinary Albertans - or, by maintaining the status quo, will he side with the big energy companies?

Only time will tell - but here's hoping he surprises the general public in the same way he surprised Tory party members.

Gil McGowan, AFL President
December 2006

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