This pro-business panel put Albertans first
Graham Thomson
The Edmonton Journal
Saturday, September 22, 2007
I hope you'll bear with me through another column on the royalty review report.
It'll be my third this week and I'm beginning to wonder if I'm obsessed with the thing. I mean, I carry a copy with me wherever I go like a teenager with an edition of Catcher in the Rye.
I've read the report so many times it's as dog-eared as a beagle puppy -- and, I have to say, it's just as adorable.
It is a clear-headed, powerfully written, 104-page indictment of how Albertans have not been treated fairly on energy royalties despite government protests to the contrary the past five or six years.
I even took the report to bed this week to reread the bits about how to fix government ineptitude, increase royalties and ensure we as Albertans get "our fair share."
For an observer of Alberta politics it's as good as porn. I should be reading it under the covers with a flashlight.
And I have to admit to a guilty pleasure when realizing how the report has sent a shock wave through the energy industry and Alberta's governmental establishment. As wake-up calls go, this is a howitzer.
Critics of the report are slamming it as something of a communist plot, calling it draconian and warning if its recommendations are adopted our province will become akin to socialist Venezuela or a third-world "Albertastan."
The report's critics make it sound as if the report was written by Alberta NDP leader Brian Mason.
Mason, of course, had nothing to do with the report. Neither did Liberal leader Kevin Taft.
The report was written by a six-member, blue-ribbon panel named by the government. The members included two economics professors, a chief economist for an Calgary-based energy research firm, a businessman, a forestry executive and a former senior executive with an oil company.
If anything, the panel was seen as too pro-business. In fact, the appointment of Sam Spanglet to the panel caused a stir back in February when news broke that the former oil executive still had "a couple of million" dollars worth of stock options with Shell Canada.
At the time, Liberal leader Taft said "this royalty review process is tarnished from day one."
And the NDP's Mason said in February, "It looks to me like most of the members of this committee are attached to the corporate sector in some way."
As if to bolster the opposition's accusation, the Canadian Association of Petroleum Producers was reportedly pleased with the panel's members and their credibility.
It seemed just about everyone was predicting the panel would deliver an industry-friendly conclusion.
Viewed through that perspective, the recommendations in "Our Fair Share" are all the more remarkable. The expert panel of strong thinkers, some of whom did indeed have ties to corporate Alberta, came up with a logical and potent argument government must raise royalties on energy development by $2 billion a year.
As the report repeatedly points out: "Albertans own the resource."
That statement goes to the crux of the report's argument. And the report does a wonderful job of dismantling claims by companies that the energy industry is already paying its fair share in royalties.
On page 23, for example, the report points out "The panel was constantly told by companies and by energy industry trade groups that Alberta ranked very high in Government Take." However, those companies and groups were citing from an outdated 1997 report by an international expert. The review panel commissioned the same international expert who compiled new data and concluded "the very opposite is now unequivocally true."
The report's recommendations have the energy industry and its supporters in such a tizzy they're issuing statements that can only be described as pretzel logic.
To argue, as some have done, that it is better for the oil companies to keep surplus profits because they will generate more wealth is missing the point that the energy resources belong to the people.
The government collects the royalties on our behalf. You could certainly argue over how best to handle that money, but the $2 billion in extra royalties recommended by the review panel is our money to spend.
Or save for the future.
Or you could certainly make an argument for lower taxes or even rebate cheques.
But letting oil companies keep the money and then hand it over to shareholders would be cheating us and our children.
As the report says: "Alberta's natural resources belong to Albertans."
It's a quote worth clipping and sending to energy companies. So is, "Albertans do not receive their fair share from energy development."
It is such a great report I just might read it again tonight. Could somebody get me a flashlight?
gthomson@thejournal.canwest.com
© The Edmonton Journal 2007
