When Gil McGowan, president of the Alberta Federation of Labour (AFL), walked into a conference room in Kananaskis to observe the meeting of energy ministers from across Canada in July, he expected to find a seat in the section reserved for environmental groups, or concerned citizens groups. There was no such section. Looking around the room, bedecked in energy company sponsorship banners, McGowan realized he was the only person there who wasn't with an oil and gas company.
He shouldn't have been surprised. After all, when he called then energy minister Ron Liepert's office to get a seat at the meeting, which was open to interested stakeholders, he was rebuffed.
"So I'm the president of the federation of labour, (but) the only way I got in, even as an observer, was to phone my counterpart in Newfoundland who has a good relationship with their government, which happens to be a Conservative government," says McGowan. "And so she talked to their energy minister. So I was invited by the Newfoundland energy minister to attend the conference here in Alberta.
"To make matters even worse, when Liepert got up to give his introduction, he said 'I'm so pleased that we're together here with all the relevant stakeholders.'"
It's a surreal representation of what many say is an undue influence on the government of Alberta by the energy industry. Although the government does engage stakeholders, from labour to environmental organizations and beyond, many say that the energy industry has the greater pull. Critics point to the government ignoring the findings of multi-stakeholder discussions, the sheer imbalance between the well-funded oil and gas machine and those of civil society groups, and the amount of interaction between the government and the energy industry compared to other stakeholders as a sign that the cards are stacked.
CAPP and the Act
The AFL represents 29 unions with a combined membership of 145,000 people, some of whom work in the energy industry. This isn't an environmental organization calling for a halt to all oil and gas exploration in the province, but it is concerned about the environment and "the responsible and sustainable development of our resources," according to McGowan.
AFL is also concerned about the influence that the industry has over government policy making. While the Canadian Association of Petroleum Producers (CAPP) lists 81 different issues they will talk to the government about in the next six months, the AFL meets with the government only a handful of times each year. And so, they filed a freedom of information request looking at the interaction between CAPP and the government of Alberta.
The documents they received showed that the government and CAPP wanted to collaborate on a joint public relations campaign around shale gas fracking and water use. The federation believes that these documents demonstrate a breach of Alberta's lobbyist act, which sets out stringent rules for engaging the government. For one, the people working on CAPP's behalf were not among the 41 lobbyists registered by the organization.
So, the AFL sent the documents to the lobbyist registrar and asked for an investigation. What they didn't do was check their package of documents carefully, highlighting only the unlisted lobbyists and the fact that a briefing note seemed to indicate that it was CAPP that approached the government about the public relations campaign. It's an important distinction. If the government approached CAPP, the act would not apply. That's exactly what the registrar ruled on November 28.
"We sort of assumed that he would do a thorough investigation, including a search of the documents," says McGowan. "It turns out he didn't do that. He only interviewed a couple of people and concluded that everything was hunky-dory because they said it was hunky-dory."
After looking more carefully at the package of documents, the AFL realized they had emails that appeared to contradict the ruling. An email dated June 8, 2011 from Doug Bowes, the director of unconventional gas in the energy department, says that CAPP approached the government to discuss its desire to "strike a committee to develop a public relations strategy focused on fracturing and water use associated with shale gas development."
The federation has called for a new investigation, but it's unclear if that will happen. The act forbids the registrar from commenting on the matter, even to acknowledge whether an investigation is underway.
Travis Davies, a spokesperson for CAPP, doesn't see any need for further investigation. He also doesn't care much for the federation's views. "I think the AFL's characterization of the matter is really, one, inaccurate and pretty disingenuous," he says.
"I think it goes back to, the AFL was upset that the commissioner did find that we were in compliance, produced these documents, which I would assume were part of the body of work that the commissioner looked at. I can't of course speak for him. If you look at the findings, clearly it falls within the parameters."
But for McGowan, it isn't necessarily about registered lobbyists and who approached who. "This is about a broader concern about the proper relationship between government and industry. We feel very strongly that there needs to be a line between government and industry, even industries that are very important to the provincial economy.
"We're afraid that that line has not always been observed. This is one of those examples where we feel the line has clearly been crossed."
Meanwhile in the ivory tower
In a recent paper published in the Canadian Journal of Political Science, George Hoberg and Jeffrey Phillips make a similar argument. Their analysis of the Alberta government's engagement with stakeholders in the oilsands concludes that despite an opening up of the conversation, it's still mostly a back-and-forth between the two dominant players — the energy industry and government — when it comes to policy decisions.
The paper looks at several events, including the Radke report. Released in 2007, the report's mandate was to look at the challenges of rapid expansion in the oilsands and to provide a short-term action plan. The first and most prominent recommendation is investing in infrastructure to support continued growth. Environmental recommendations are sparse and vague.
Another area of concern for the authors is the Cumulative Environmental Management Association (CEMA), a standing body that produces research into the cumulative effects of the oilsands region and makes recommendations to government. Hoberg and Phillips argue that it is ineffectual.
In one major example, the Sustainable Ecosystems Working Group within CEMA called for a partial moratorium on new oilsandsleases until it could complete its work. The group was worried about the effects of rapid expansion. The government refused. When the group did produce its report, it called for 20 to 40 per cent of the region to be protected and for intensive developments to be carried out in only five to 14 per cent of the area.
The report did not receive consensus among CEMA members, which includes oilsands companies, and the government didn't implement it. Instead, the government started its new Land Use Framework deliberations. This led to the Pembina Institute and two other environmental groups walking away from CEMA.
Hoberg, a professor at the University of British Columbia who specializes in environmental politics, says by phone that Alberta is "an example of a jurisdiction that is heavily dependent on one particular industry, and in circumstances like that, it's not uncommon to have an extremely close power relationship between that industry and the government."
That relationship is almost inevitable, given oil and gas's heft in our economy. And it's something the government feels is appropriate. "Across government, ministries work with stakeholders. It's not only not uncommon, it's necessary. The oil and gas industry drives this economy, it's responsible for one in seven jobs in this province and it would seem absurd to not meet with the organization that represents that industry," says Bart Johnson, a spokesperson for Alberta Energy. "We share common interests. They certainly have some interests in policy development with the government."
Hoberg's paper examines the introduction of multi-stakeholder discussions meant to address the rising tide of criticism of Alberta's oilsands and to stem the perception that the energy industry dominates the conversation. While those processes allow for more voices to be heard, the authors looked at the policy outcomes of those deliberations and recommendations and found that industry tends to get its way.
"The history of multi-stakeholder discussions on oilsands in Alberta is one of talk and drill," says Hoberg.
It's a sentiment that many environmental organizations agree with. While many have participated in multi-stakeholder processes, there are also many who have pulled away. The reasons extend from the mundane concerns of operating budgets and the drain on resources that comes with participation, to the composition of the groups, to anger at the end product.
"Whether it's citizens or industry or public interest organizations, all of them ask prior to joining whether this is the best use of our time, and is it better to be at the table, or not at the table?" says Joe Obad, associate director of Water Matters. "And those are tough decisions to make."
When Water Matters was called Bow Riverkeeper, the organization was involved in the Alberta Water Council, a multi-stakeholder process designed to address concerns over industry's affect on watersheds and wetlands in the province. It pulled out of the process.
"We felt it restricted our ability to speak out, so we left the Alberta Water Council because we felt we're going to speak out about this and we're going to speak very clearly and not use the process as the means to speak about the things we support," says Obad.
"That was a difficult decision to make, but it was based on the idea that every group should be allowed to champion its objectives by whatever means it sees fit."
The Alberta Water Council is a process that comes up again and again when speaking to environmental groups about the concerns they have over industry influence. Chief among their complaints is the decision by the government to scrap a no-net-loss wetlands policy that would force industry to protect watersheds, or to replace ones that they destroy.
After three years of discussion and study, of the 25 organizations represented on the council, 23 supported the measure and, according to the Pembina Institute, 90 per cent of Albertans who were polled supported the idea. The only two non-consensus votes were CAPP and the Alberta Chamber of Resources (ACR), which sent dissenting letters to the government.
ACR boasted on its website at the end of 2008 that it had effectively lobbied the government not to follow through on the recommendation.
In an abridged version of a speech posted on the site, given by the executive director of ARC, Brad Anderson, he says: "One of the most influential things ACR was able to accomplish in 2008 was to do a really good job explaining where industry's line in the sand is when it comes to critical issues. A prime example of this was the position the Chamber took on the proposed Provincial Wetlands Policy."
It says that it successfully lobbied the government to accept three of the four changes it requested in its dissenting letter, including scrapping no-net-loss. This was posted on the ACR website before the government made its announcement.
When the Canadian Press reported on the claim and the anger of those who participated in the Water Council discussions, the report was removed from ACR's website. A copy of the website post was saved and given to Fast Forward Weekly.
Mike Hudema, a tarsands campaigner with Greenpeace, says the organization has not participated in any multi-stakeholder processes since setting up shop in the province in 2007. "The story that we heard was the same, that it was a lot of time and resources spent and at the end of the day what came out was not reflective of the conversation that many of the groups had," he says.
Of course, no conversation about oil and gas in Alberta can ignore the regulations set in place to protect our environment and ensure that companies are following the rules. There seems to be no middle ground when people discuss the Energy Resources and Conservation Board (ERCB), the arm's-length government body responsible for approving or denying oil and gas projects. It's either a pawn of the industry, or a world-class regulator, or an overbearing obstacle. You either love it, or you hate it.
For many critics, you simply have to look at the overwhelming number of approved applications and the relatively few denials: in 2011, the ERCB approved 79 applications while denying seven.
"It's an overly simplistic view," says Darin Barter, a spokesperson for the ERCB. "What you're not seeing is the requirements that companies are bound to prior to even applying to the ERCB."
Barter argues that companies have jumped through so many regulatory hoops by the time they go before the ERCB that approval is virtually guaranteed. "Companies can take months to years to put together an application for a project," he says.
"The transparent part is seeing the approvals or denials, the less transparent part is seeing the regulatory framework."
And there's no doubt that the regulatory framework is intimidating. To the layman, it's a Byzantine and dense set of rules that requires an in-depth knowledge to navigate, But critics maintain that it doesn't go far enough. The wetlands policy debacle is one instance.
In the case of the oilsands, where no project has been denied, Pembina points to an agreement by Royal Dutch Shell to reduce its emissions to the tune of 900,000 tonnes in order to gain approval of its Jackpine Mine and Muskeg River Mine Expansion projects. The promise convinced Pembina to remove its objection to the project. Shell then reneged on that promise.
In a 2009 release, Pembina's Simon Dyer wrote: "In approving Shell's projects, the joint review panel struck by the Alberta Energy Resources Conservation Board (ERCB) and the Government of Canada explicitly noted that they would review Shell's approval in the event that the company failed to fulfil commitments that had been presented as evidence."
Pembina and EcoJustice petitioned for a review. That review did not happen.
In Hoberg's paper, the hopeful component of his less-than-rosy conclusion is that by opening the door to groups outside the traditional power structure, the government has given them credibility and will have to take their concerns seriously.
"And I do think the government and the industry, it took them a while, but now they have to acknowledge the significance of the environmental impacts of the oilsands and of environmental interest groups," says Hoberg.
In the conclusion to his paper, he argues that it's the government that must now save face. "In the oilsands case, the government of Alberta has formally acknowledged the legitimacy of environmental critics by giving them a formal voice in the consultation processes," he writes. "Now that environmentalists have denounced those processes and withdrawn, the government's own strategy has lost its legitimacy."
No one interviewed for this article tried to argue that the government did not address a broad range of stakeholders. "I would say, in general, governments try to meet with all stakeholders," says Obad. "They don't tend to leave anyone out altogether. But it does seem that there's a degree of difference in terms of frequency and accessibility."With vast financial resources, teams of lobbyists, ready access to decision-makers and a proven track record of being able to influence policy decisions despite being in a minority on stakeholder decisions, the oil industry has proven it has pull. On the opposite side, many groups are skeptical of engaging in discussions that seem to accomplish little more than depleting their sparse resources.
"The government has a responsibility to look after the public interest first and in cases where the public interest conflicts with the narrow interests of the energy industry, then the government has to fall on the side of the public interest, but I'm not sure that happens enough in Alberta, or even at all," says McGowan.
"I'm certainly not suggesting that the labour movement or any other groups in civil society should be calling all the shots for government; what I am suggesting is that neither should industry."
fastforward weekly, Thurs Dec 15 2011
Labour group offers real solutions to Alberta’s deficit problems: Wealthy province can afford to protect services by adopting simple revenue fixes, says AFL
The Alberta government must do a better job of collecting revenue to provide the vital public services Albertans have clearly said they want, according to the 2012 Budget submission sent today to Finance Minister Ron Liepert.
"Alberta is one of the wealthiest places in the world, but that wealth isn't benefitting all Albertans," says Gil McGowan, president of the Alberta Federation of Labour (AFL), which represents 145,000 workers.
"Our broken revenue system means the province is running deficits even during good times. Rather than fix the revenue system, the government has previously chosen to slash spending and throw our public services into chaos. We need look no further than the situation in our schools, hospitals and long-term care to see the tragic results of this folly," he says.
Today is the deadline set by the government for the public to make suggestions for the 2012 Budget. The AFL's submission shows that the government's fiscal problem is on the revenue side of the ledger, not on the spending side. It points out that Alberta is wealthy, with a bigger economic pie than other provinces, with corporate profits hitting new highs (up 450 per cent from 1998-2008) and astronomical investment in capital projects. Meanwhile, spending as a percentage of the province's Gross Domestic Product (GDP) has fallen by nearly 40 per cent since 1989. On a per-capita basis, expenditures are about the same as the rest of Canada.
"What this tells us is that if there is any province in Canada that should be able to afford high-quality public services, it's Alberta," says the AFL submission. "The evidence is clear and incontrovertible: we are running deficits even during strong economic times because tax and royalty policies pursued by the government over the last 20 years have essentially blown a hole in the revenue base that the province needs to fund public services. In other words, the cupboard is bare because we've decided to make it bare," says the submission.
The AFL calls on the government to consider real solutions that can be included in Budget 2012:
• replace the flat tax on personal incomes with progressive taxation;
• introduce a surtax on high-income earners;
• increase corporate taxes to at least the Canadian average; and
• increase royalties to at least the rates proposed by the 2007 Royalty Review Panel.
"These solutions would bring in billions of dollars every year, eliminating the deficit and removing the threat to services, while still leaving Alberta a great place to do business and to live," says McGowan. "We urge the Redford government to take the same approach as other right-of-centre politicians – including Peter Lougheed, Danny Williams and Sarah Palin – and do a better job of getting value for the resources Albertans own."
Gil McGowan, AFL president, 780-218-9888 (cell)
Alberta Federation of Labour applauds Keystone XL delay: It’s a chance to consider value-added opportunities in Alberta, says McGowan
Edmonton – The Alberta Federation of Labour applauds the Obama administration’s decision to delay the Keystone XL pipeline, saying it will give the Redford government an opportunity to pursue value-added opportunities here at home, rather than shipping unprocessed bitumen south for upgrading.
“There’s been a parade of Alberta government ministers travelling to the States to sell unprocessed bitumen. Now perhaps those same ministers can stay in Alberta and consider our needs and our future ahead of those of our neighbours south of the border,” says Gil McGowan, president of the Alberta Federation of Labour (AFL), which represents 145,000 workers.
“Upgrading more bitumen in Alberta will help our province in many ways. Increasing value-added industries will provide quality, long-term jobs for Albertans and Canadians. While good relationships with our neighbours are important, the government of Alberta must promote the long-term health of our province first. Increasing value-added energy industries in Alberta will increase revenues from royalties and taxes,” he says.
“As bitumen is upgraded and moved up the value chain, more funds will flow into the Treasury through higher royalties on finished products. This is money that can be used to pay for important public services like health care and education,” says McGowan.
McGowan took particular exception to the Wildrose Party’s reaction to the delay of the Keystone XL pipeline.
“The Wildrose Party was playing fast and loose with the facts in their media release today. They should avoid fear mongering. The truth is that this pipeline is bad news for quality jobs and bad news for royalties,” says McGowan.
“Danielle Smith is trying to convince us that we’ll lose billions in royalties if the Keystone XL pipeline isn’t approved, but the opposite is true. If we export unprocessed bitumen, we ruin a great competitive advantage,” says McGowan
“The National Energy Board notes that, ‘wide differentials provide refiners with an economic incentive to build heavy oil conversion capacity.’ If we get rid of the prices differential between our bitumen and global crude, we destroy future opportunities to boost our value-added industries,” he says.
“In this context, Albertans should see the Obama administration’s decision as an opportunity, not a disappointment. It is an opportunity for us to move up the value chain and create a more prosperous and stable economic future for Albertans.”
Gil McGowan, President, Alberta Federation of Labour @ 780-218-9888 (cell)
Gary Mar must answer $660-million question: Will he cut services again to pay for his latest gift to wealthy corporations?
Gary Mar has a $660-million question to answer if he wants to become Premier of Alberta, says the province's largest labour group.
"That's how much money Mar will be giving away to wealthy corporations if he follows through on his plan to cut corporate taxes again," says Gil McGowan, president of the Alberta Federation of Labour, which represents 145,000 workers. "The question he should answer now is: How will he make up a shortfall in revenue of two-thirds of a billion dollars?"
Mar, the frontrunner in the race to become leader of the Alberta Progressive Conservatives and Premier of the province, yesterday revealed a policy that includes a further two-per-cent cut in corporate tax rates. In recent years, the province has cut the tax rate by one third to 10 per cent from 15 per cent.
"Albertans need to know how he will make up that shortfall - what cuts he would make to vital public services in order to make this overly generous gift to his corporate pals. Our health-care and education systems are already straining from the pressure of inadequate and unstable funding. Mar was a cabinet minister in the Klein era. Are we heading back to the hugely unpopular Klein-style cuts," asks McGowan.
"There is absolutely no reason to cut corporate taxes again. These tax cuts don't create new investment and they aren't needed - the evidence is undeniable," says McGowan.
Yesterday, the RBC Economics Provincial Outlook report said Alberta's economy is set to grow by 3.7 per cent in 2011 and 3.9 per cent in 2012, fuelled by investment in the energy sector. Oil and gas producers are set to spend more than $24 billion this year, an 18-per-cent increase over 2010. According to the Alberta government, per-capita investment in the province in 2010 was almost twice the national average at $18,930, with a total of $70 billion invested "due to the economic recovery and higher energy prices." Last month, it listed nearly $186 billion in major projects under way in the province.
"Alberta is awash in investments because the world wants our natural resources. Throwing money at corporations isn't going to make them invest any more. It's just going to lead to the province's cupboards being bare when it comes to paying for services."
MEDIA CONTACT: Gil McGowan, AFL president, 780-218-9888
Western Canadian Energy Ministries "Collaborate" in Secret with Petroleum Cartel to Develop Fracking Policies
Vancouver - Through top-down deregulatory and environmental streamlining directives under the recently formed New West Partnership, the British Columbia, Alberta and Saskatchewan Ministries of Energy (for oil and gas) held four or more secret meetings since July 2011 to develop "joint action on issues related to unconventional shale gas development" concerning "water issues". In a leaked August 3, 2011 Alberta Minister's Briefing Note and a directive document called New West Partnership Collaboration and Information Sharing, Industry Water Use and Hydraulic Fracture Technology Project Charter (see attached backgrounder documents), the B.C. Ministry of Energy was designated the lead agency for the internal "working group" meetings.
According to a complaint by the Alberta Federation of Labour, the in-house meetings of government officials included what appears to be un-registered lobbyists with the Canadian Association of Petroleum Producers (CAPP). Participation from all other "external" stakeholders was excluded. The internal Minister Briefing Notes for B.C. and Saskatchewan have not as yet surfaced.
In addition to controversial deep shale gas policy directives about the withdrawal, use, toxic pollution and disposal of enormous volumes of fresh water sources (amidst other critical
environmental and pollution issues related to fracking), the Alberta Briefing Note describes how the "water and technology collaboration working group" also advised the government to develop "proactive" tax-payer funded public relations schemes "within government and industry in Alberta and across Canada" for "better environmental outcomes" in the "rapid development" of shale gas fracking development. Stated in the Project Charter, the proposal to "enhance communication of stakeholders and the public with consistent water use messages" is apparently based on "misinformation in the public media and communities facing shale gas development pressure" and "environmental ENGOs supporting a ill-informed campaign on hydraulic fracturing and water related issues in British Columbia and other jurisdictions."
The Project Charter document includes the meeting group's membership list naming the three
"external" representatives from CAPP: Richard Dunn, Lara Conrad and Christa Seaman. In contrast to information that identified the role and position of government participants, the corporate affiliations and roles of the three CAPP members were omitted. Dunn, who is vice-president of regulatory and external relations with Encana Corporation, is a registered provincial and federal lobbyist (the Hill Times reports that as a federal lobbyist Dunn is a "key voice in shaping the debate about Canada's environment and climate change strategy"). Conrad is the Regulatory & Government Relations Team Leader with Encana Corporation. Seaman, a former GHG ProjectsCoordinator with Canadian Natural Resources Limited, is a current registered lobbyist for CNRL2 and Shell Canada.
Of all shale gas companies operating in northeast B.C., Encana has the largest holdings of petroleum leases. Shell has a significant portfolio investment stake in proposed shale gas developments throughout the world, and has mounted a sophisticated public relations campaign.
On August 18, 2011, the Alberta Federation of Labour, which received a copy of the leaked
documents, quickly filed a complaint with Alberta's Ethics Commissioner on "a possible contravention of the Lobbyists Act." In the complaint, the Federation stated that "CAPP was not invited by the government to collaborate on public communication on Alberta shale gas development, rather CAPP approached the government.... although CAPP is in the Lobbyists Registry, none of the individuals lobbying the government on behalf of CAPP are registered as CAPP lobbyists." Based on its concerns, the Federation summarized that "it is our belief that the public interest has been undermined in this case", as "CAPP approached the government to take the lead in developing a government public relations campaign on shale gas development in Alberta."
Public relations and lobbying strategies by powerful and affluent industry organizations to access and develop public natural resources have occurred and evolved in Canada for quite some time. For instance, over a number of decades, the B.C. Council of Forest Industries (COFI), an alliance of national and international forest industry companies and corporations, effectively lobbied BC government administrations. It helped bypass environmental constraints and stifled public concerns while implementing an accelerated and unbridled rate of logging to liquidate old growth forests by clearcutting. During this period of profiteering, COFI accessed and ruined hundreds of public drinking watershed sources that had previously been protected through local, regional and provincial government policies, often defending the intrusions before politicians and the public with the mantra "logging enhances water quality". Like COFI, CAPP is attempting to inflict something similar within governments - albeit on a grander scale - on the controversial practice of hydraulic fracturing ("fracking") of deep shale gas.
Under the shadow of the New West Partnership, CAPP may be steering the way for an inter provincial sympathetic administration to help control and limit public debate on environmental and resource issues.
"The leaked documents from Alberta are fundamentally disturbing, and challenge the core principles of our democracy", says Will Koop, BC Tap Water Alliance Coordinator. "The elected leaders and executive energy administrators of western Canada are caving into the petroleum industry, and are excluding public stakeholders from the fracking table. What's more, if CAPP gets its way, not only will the public suffer from an ill-natured public relations scheme thrust upon it by its own governments, but it will have to fund it as well. Small wonder why and shame on the B.C. government for ignoring public demands since last April for a public inquiry into fracking practices in northeast BC."
- 30 -
Vancouver Media Co-op, Wed Sept 7 2011
The British Columbia Ministry of Energy was designated a "lead agency" in a backroom collaboration with Alberta and Saskatchewan to address water concerns for the province's rapidly expanding shale gas industry. The New West Partnership, an undisclosed collaboration between Canada's three western provinces to expedite shale gas extraction, has held four secret meetings since July 2011 to discuss water issues related to fracking, according to a leaked briefing note, released today by the BC Tap Water Alliance (BCTWA).
The leaked document, including an attached directive, outlines the group's strategies to streamline gas production across the West while minimizing public and stakeholder involvement. The partnership project, which is aimed to design streamlined policy regarding gas extraction including the controversial technique fracking, is also posed to curtail public concern with "proactive" public relations campaigns that will respond to the "ill-informed campaigns" of environmental NGOs, public media and local communities.
The Project Charter outlines the New West Partnership's intentions to manage public opinion with 'consistent messages' regarding environmental concerns which are "potentially problematic" for shale gas development. Despite the group's pretense to stakeholder transparency and "enhanced communication," the only external body consulted so far is Canada's largest oil and gas lobby, the Canadian Association of Petroleum Producers (CAPP). According to the BCTWA press release, the internal meetings held by provincial regulators and government officials included three unregistered lobbyists representing CAPP, prompting a complaint from the Alberta Federation of Labour.
After receiving a copy of the leaked documents the Alberta Federation of Labour filed an official complaint with Alberta's Ethics Commissioner citing a "possible contravention of the Lobbyist Act." Although CAPP is a registered lobby body, the Federation conceded, none of the present lobbyists were registered to lobby on behalf of CAPP. The in-house meetings, where government officials hosted government and public relations consultants from Encana Corporation, Canadian Natural Resources Limited and Shell Canada, caused some disquiet for the Federation, causing them to state: "it is our belief that the public interest has been undermined in this case."
Shale gas extraction and fracking, although occurring at accelerating rates across the three provinces, have escaped much of the public approval process. In British Columbia especially, calls for an independent investigation into the process have gone largely unheeded. Similar demands in Alberta pose no exception.
"The leaked documents from Alberta are fundamentally disturbing, and challenge the core principles of our democracy" says BCTWA coordinator Will Koop. "The elected leaders and executive energy administrators of western Canada are caving into the petroleum industry, and are excluding public stakeholders from the fracking table."
"If CAPP gets its way, not only will the public suffer from an ill-natured public relations scheme thrust upon it by its own government, but it will have to fund it as well."
In an interview with DeSmogBlog, Koop went on to say, "I know from experience that the government has been ignoring our calls, calls from other groups, and from independent MLAs to investigate the process. This document and the information that is being leaked is going to help the public understand where the politics are going."
Part of the problem, says Koop, is that shale gas development tends to occur in remote areas. "I think in part the lack of public engagement has to do with where the fracking is occurring - its quite far removed from where the general public lives and there hasn't been enough critical coverage in the media over a period of a number of years to deal with these concerns."
"British Columbia is kind of being captured by the politics of Alberta and the issue of fracking hasn't really gotten the proper attention, evaluation and analysis by British Columbians." The government agencies in BC, continues Koop, are keeping their distance from the issue. The Ministry of Forests, he says, has not completed a thorough analysis of the lands being used and sold through the leasing process run by the BC Oil and Gas Commission. And the Commission itself is dropping the ball. "What we need is a comprehensive evaluation of what is going on and it isn't there. The Oil and Gas Commission is not doing it and they are the ones with the mandate to do so."
The 2011 BC Oil and Gas Conference, slated to begin tomorrow, is meant to be hosted in the spirit of "Communities Leading Change," yet the lack of community participation to date suggests that unconventional gas development is meant to occur with or without public consent. Like other jurisdictions, Canada's western provinces need to find the community voice necessary to join the discussion and to ensure that more than just industry lobbyists are at the table.
Desmogblog.com, Tues Sept 6 2011
To his credit, Alberta NDP leader Brian Mason has at least brought the increasingly cosmic debate over TransCanada Corp.'s Keystone expansion back to earth. Yesterday in the Calgary Herald, and again this morning on CBC Radio, Mason revived the old chestnut that bitumen exports undermine domestic job creation. In doing so, he artfully moved the conversation beyond the realm of fantasy so expertly occupied by Daryl Hannah and Superman's wife, err, Margot Kidder.
Labor groups and successive provincial governments have long argued that exporting raw bitumen sacrifices domestic jobs by discouraging construction of the multibillion-dollar mega-plants called upgraders. The plants, used to convert bitumen into synthetic crude oil, typically employ legions of tradespeople during construction. (More than 10,000 people worked on a recent expansion at Shell Canada Ltd.'s Scotford facility, for instance).
It makes sense for Mason to support building more of the plants. No politician in his right mind would argue against domestic job creation. And the pro-jobs, anti-export crowd is sure to grow in number and in volume as calls to put oil sands on global markets grow more acute.
Unfortunately, though, Mason, to say nothing of the Alberta Federation of Labour, ignores Alberta's own version of kryptonite. Whatever his bold pronouncements, the fact is there is a crippling paucity of men and women needed to wield hammers, fit pipe and weld steel in this province. Recall 2008-09, when the Industrial Heartland Region saw as many as seven or eight upgrader projects either shelved or permanently scrapped. Oil prices were a contributing factor, but labour constraints played no small role halting development.
Mason should know better. It's not exactly a secret that skilled tradesmen and women are in short supply. The oil sands are particularly pinched, of course – as recently as this week Employment and Immigration Minister Thomas Lukaszuk was in Texas and Illinois trying to rustle up extra bodies. Even conventional drillers are struggling to fill positions. "Right now everybody's basically short," Jerry Dawe, an instructor at Enform's Nisku campus, told me earlier this summer. "Manpower is just not there."
Halting Keystone in the vain hope that companies suddenly dust off blueprints for plants that require a massive capital investment (and don't always provide a commensurate return) is disingenuous. It's good politics, to be sure, so long as you don't dwell on the few hundred thousand workers needed to make the value-added vision a reality. Perhaps Mason could check Krypton. I understand the planet produces able-bodied workers.
Alberta Oil, Fri Sept 2 2011
Canada needs a true national energy strategy: Slowing tar sands development smarter than unlimited extraction, shipment
When energy ministers from around the country gathered in Kananaskis recently, Alberta Energy Minister Ron Liepert billed the meeting as a potentially historic gathering at which politicians will begin long-overdue discussions towards the creation of a truly pan-Canadian energy strategy.
Now, some might think this meant that the energy ministers would work to develop a sustainable, secure energy strategy that works for Canadians in all regions of the country. But the event proved to be an elaborate attempt on the part of the Alberta government and its patrons in the oil patch to win support from other provinces and the federal government for their controversial plans to build bitumen export pipelines to the US Gulf Coast and the port of Kitamat in BC (the "gateway" to China).
Royalties are not taxes. They are the price that forestry, mining and energy companies pay to develop resource assets owned by Canadian citizens.
Clearly. some groups who were involved in the process are sincerely committed to a wide-ranging discussion about what's really best for Canadians when it comes to energy policy (the respected and even-handed Canada West Foundation is particularly notable in this regard). But it's also clear that a number of extremely influential individuals and groups had already made up their minds: they want bitumen pipelines, no matter how many good jobs in upgrading, refining and petrochemical production those pipelines might end up exporting to the US and China.
Unfortunately, Minister Liepert appears to fall into the category of pipeline salesmen rather than the category of big-picture policy thinkers.
The same can be said for the Canadian Council of Chief Executive Officers and EPIC, a new think tank created by a coalition of major oil companies, which have both recently released reports calling for you guessed it more bitumen export pipelines and quicker approvals for oil and gas projects in general.
Instead of slapping together a plan for a couple of questionable pipelines and calling it an energy policy, Canada's energy ministers should set their sights much higher. Here are a few issues that cannot be ignored if federal and provincial politicians are serious about doing more than putting a bow on the status quo and declaring their work done.
Energy Security: Like it or not, we live in a world that runs on oil. For the time being at least, individuals and businesses simply can't make do without the stuff. Yet Canada is the only major oil producing jurisdiction in the world that doesn't have a coherent national strategy that puts their interest of its citizens first.
The results are perverse. Despite our status as a net energy exporter, Ontario, Quebec and the Maritime provinces import roughly 700,000 barrels of crude oil a day from places like Saudi Arabia, Algeria, Nigeria and Venezuela. In fact, Quebec and the Maritime provinces import more than 80 percent of the oil they use from outside Canada.
Why? Because almost all of our pipelines run north-south. Shockingly, we don't have the infrastructure to send western oil to our fellow citizens in the eastern half of the country.
Minister Liepert and others are right when they say we should be looking for new markets for our oil. After all, demand from our biggest costumer, the US, is stagnating and quirks of the US distribution system mean we're not getting world price for what we sell.
But if new markets are what we're looking for, doesn't it make more sense to build pipelines connecting west and east within our own country before building pipelines to supply refineries in Texas and China? Building pipelines to supply the Canadian east as opposed to the Far East also has the benefit of keeping the jobs, profits and tax revenue associated with upgrading and refining within Canada.
Economic Impact of Oil: Driven by massive investment in the oil sands, Alberta's energy sector has become the driving force behind the Canadian economy. This has been great news for Albertans and the hundreds of thousands of other Canadians who have flocked to our province to participate in the boom.
However, from a national perspective, by relying too heavily on the energy sector, we run the risk of developing what economists call Dutch Disease. This is an economic condition in which a booming energy sector drives up the currency and oil-related investment but, in the process, drives down investment, profits and jobs in other sectors, particularly manufacturing.
Any national energy strategy worth its salt would recognize this threat and take steps to deal with it. One possible solution is the one offered by former Alberta premier Peter Lougheed: set a slower pace for development in the oil sands. By proceeding with five or ten projects at a time (instead of the sixty-plus that are currently on the books) we would reduce the likelihood of developing a full-blown case of Dutch Disease.
As added benefits, a more reasonable pace for development would also make it easier to address cumulative environmental impacts and also would reduce (perhaps eliminate) the need to bring thousands of temporary foreign workers into the country to supplement the domestic construction labour force. In other words, a slower pace for development would ensure that it would be Canadian workers who would benefit most from the construction of major Canadian resource projects.
Royalties: Royalties are not taxes. They are the price that forestry, mining and energy companies pay to develop resource assets owned by Canadian citizens.
The good news is that royalties generate billions of dollars each year, especially in resource-rich provinces like Alberta, Saskatchewan and Newfoundland. This is money that we use to build needed infrastructure and fund vital public services like education and health care. The bad news is that we don't always (or even often) get the best possible price for the sale of our assets.
In Alberta, for example, under the Stelmach government we're actually collecting fewer royalties as a share of our overall energy oil and gas sector's revenue than the Social Credit government did in the late sixties (and less than a third of the proportion that was collected under Lougheed).
To rectify this problem, and ensure Canadians get the best possible price for the sale of their assets, a national energy strategy could introduce a truly national process for setting and bargaining royalty rates, so that energy companies could no longer play one jurisdiction against the other.
The bottom line is this: in an environment characterized by historically high oil prices and rapidly declining options for oil companies in other parts of the world, provinces like and Alberta, Saskatchewan and Newfoundland hold all the cards. By cooperating, we can play those cards more aggressively and successfully. Energy companies won't fold or leave the table, because they have nowhere else to go.
Transition: A post-carbon economy is years away, but make no mistake, it's coming. It's coming because the science around global warming is real and frightening; because a global political consensus has emerged in support of a greener economy; and because, more practically, the world is running out of oil (at least cheap oil).
This doesn't mean that we should stop developing our oil resources. The oil sands are one of our country' most valuable assets at the moment and it would be foolish not to exploit them. However, what the coming of a post-carbon economy does mean is that we're going to have to start looking at the oil sands in a different way. In particular, we should very consciously start thinking of the oil sands as a transitional resource: a resource that will help provide us with the revenue necessary to build the next, greener economy in Canada.
If Alberta find a way to join other provinces in crafting and supporting a national energy strategy that uses the oil sands as a bridge to a better future for the entire country, then not only will our country's economic prospects be brighter, we may also be able to manage the "politics of envy" that inevitably come from one province having so much more wealth than others.
In the end, Minister Liepert is right about one thing: the meeting in Kananaskis had the potential to be historic. How unfortunate that he and other provincial energy ministers failed to think and dream big. A true national energy strategy has to be much more than a plan to build a couple of pipelines that export jobs along with our oil.
We can do so much better. In fact, for sake for future generations of Canadian, we need to do much better.
Gil McGowan is president of the Alberta Federation of Labour. The AFL represents 145,000 unionized Albertans, including about 25,000 who work in the energy sector or energy-related construction.
Straight Goods, Mon Aug 8 2011
Byline: Gil McGowan
Tory leadership contenders defend energy stimulus program: Labour group says $2.9 billion would have been better spent elsewhere
EDMONTON — Despite Alberta Federation of Labour claims the province blew $2.9 billion on drilling incentive programs that failed to create jobs or investment in the oilpatch, the Conservatives vying to be the next leader continue to support them.
All six candidates for the premier’s job say the two-year incentive program that expired in March kept Albertans working in the oilpatch and in service industries when the recession hit in 2008. They suggest if Alberta found itself in similar circumstances under their leadership, they might announce a similar program in a bid to rejuvenate oil and gas exploration.
The labour federation has asked the auditor general and the all-party legislature public accounts committee to review the program and determine whether it achieved its objectives.
The federation says the $2.9 billion the program cost taxpayers would have been better spent on programs and services because it merely padded the profits of major international oil and gas companies. During the period the program was in place, the oilpatch lost 8,000 jobs, the federation says.
“We’re not opposed to stimulus efforts aimed at creating jobs,” said federation president Gil McGowan. “What we’re opposed to is spending literally billions of dollars of public money without any strings attached and with no mechanisms in place to measure the effectiveness of the program.”
The government “shovelled money out the door” without putting in place any measures to determine whether the spending was effective, he says.
“The fact that so many of the leadership candidates have blindly endorsed the giveaway is almost as bad as the giveaway itself,” he said.
But Tory candidates seeking to replace Premier Ed Stelmach this fall reject claims the program was a failure.
“I think drilling incentives have had a tremendous purpose and that’s been to keep the economy going,” said former justice minister Alison Redford.
“I don’t take the view the Alberta Federation of Labour takes with respect to what the impact has been on the economy,” said Redford. “Theorizing on whether there’s been an improvement or not is pretty difficult. We know that rig activity has gone up . . . so I support those initiatives.”
Former finance minister Ted Morton said the program was important to get rigs working.
“I think they were the right policies for the right time.”
Deputy premier Doug Horner said it was all about trying to create jobs.
He said it’s important to recognize that a tremendous amount of wealth is created in the province by development of natural resources and incentive programs have long been used to stimulate creation of jobs in those sectors.
“We don’t want to have a bunch of people sitting around and waiting for a rig to go up,” he said. “We want to have them working. So from that perspective, I think we achieved the results we were looking for.”
Horner said he didn’t recall what performance measures were created to determine whether the programs lived up to expectations, but he was satisfied they worked.
“We felt it would stimulate x numbers of wells drilled and it would stimulate the kind of activity we achieved which is good.”
Calgary oilman Rick Orman said the incentives were required because the Ed Stelmach Conservative government made “a mistake” in raising royalty rates. “I would prefer a situation where there is no need for incentives,” he said. “What we’re doing is we’re trying to say the royalty decision was the right thing — and backfill with incentives.”
“They may have created jobs; they may not have created jobs. I don’t know. But I know . . . that if we’re talking about labour shortages (now) there is something going on.”
Backbencher Doug Griffiths said he doesn’t know if the incentive program worked, but something had to be done to keep the economy going when the recession hit Alberta.
“I would probably agree that it didn’t create a lot of jobs, but one of the things it did was keep jobs from being lost because we had some challenges with the royalty review and the downturn in the economy that created a perfect storm that slowed down investment around the world and particularly here in Alberta,” he said. “Something had to be done to counter that so we didn’t lose jobs.”
Former Washington envoy and conservative cabinet minister Gary Mar said he would be interested in seeing the AFL report on the program, but he believes it was successful.
“I am not sure they have it right, but I would be happy to look at their numbers too see how they have come to that conclusion because it has not been my observation,” he said.
But NDP leader Brian Mason also called for a review of the program.
“I think if you are going to create a stimulus program you need to define exactly what you are trying to accomplish and measure your results to see if you get any,” he said.
Calgary Herald, Mon Aug 1 2011
Byline: Darcy Henton
Last week U.S. lawmakers decided that President Barack Obama must make a decision sooner than he wanted to on construction of the $7 billion Keystone XL pipeline, which would deliver bitumen — thick, tarry oil — from northern Alberta to refineries on the Gulf Coast.
Obama is concerned about environmental consequences. But here in Alberta, Gil McGowan, president of the Alberta Federation of Labour, is alarmed about something else.
“We’re sending jobs down that pipeline. Not just Alberta jobs but jobs for all Canadians,” McGowan said during an interview.
If we were to build more upgraders and refineries here instead of exporting raw bitumen, adds McGowan, thousands of workers would be needed for both the operation and maintenance of those industrial projects.
Needless to say, McGowan’s plea is not getting much attention from either the Alberta or federal government. They want to export the bitumen as soon as possible. Not just to refineries on the Gulf Coast but to China with a pipeline that would cross northern B.C.
And yet it was only five years ago that Premier Ed Stelmach promised to keep more bitumen upgrading jobs in Alberta.
“Shipping raw bitumen is like scraping off the topsoil, selling it, and then passing the farm on to the next generation,” Stelmach said in 2006 when he was running for the leadership of the Conservative party. “What value does it have?”
Despite that promise, stats compiled by the Energy Resources and Conservation Board reveal that the province’s upgrading capacity will not keep pace with the extraction of bitumen from the oilsands. The ERCB estimates that by 2018, only 52 per cent of the bitumen leaving Alberta will be upgraded. Stelmach had promised 75 per cent by the same year.
In his day, premier Peter Lougheed was determined not to export natural gas from the province without first stripping it of compounds that could be used in an Alberta-based petrochemical and plastics industry. Conservatives today would likely condemn his interventionist policies but they succeeded in keeping highly technical and well-paying jobs in the province.
Oilsands producers and politicians now argue that it is not economically viable to build more upgrading capacity than is already in place or planned.
Gil McGowan doesn’t buy those arguments.
“If we let the market decide, the market will simply send our jobs down the pipeline,” he said. “It’s small, short-term thinking.”
McGowan agrees that oilsands expansion is already faced with a labour shortage. But he says that wouldn’t be the case if the government staggered expansion instead of letting dozens of projects go ahead at once. Something else that Lougheed has also called for.
There’s no question that McGowan and the AFL stand to gain if more upgraders and refineries are built in Alberta. It’s much easier to organize a union in an industrial plant than it is in an oilfield, where workers are fewer and more transient.
He’s also well aware that most of the oil and gas industry in Alberta is not unionized. Unlike B.C. or Ontario, for example, where unions have a strong influence in key industries, labour in Alberta is not considered a major player.
So much so that when McGowan, who was a journalist before becoming a labour leader, requested observer status at the recent premiers’ conference on energy issues held near Calgary, the Alberta government turned him down.
Only through the intervention of contacts in the federal government and other provincial governments did he finally get permission to sit with observers from industry and environmental groups.
Gil McGowan may not be popular in Alberta but he’s certainly on the money when it comes to reminding Conservative politicians of the promises they once made and now have conveniently forgotten.
Toronto Star, Mon Aug 1, 2011
Byline: Gillian Steward