Energy sector in hunt for new Conservative leader
Deborah Yedlin
Calgary Herald
Wednesday, February 27, 2008
Premier Ed Stelmach might be putting on a brave face about winning back seats in Calgary in next week's election, but word has it that it won't be more than a pyrrhic victory for our earnest leader.
The deal that's being done for Calgary votes -- especially amongst those in the oilpatch -- looks like this: "I'll vote for you, on the condition you work to change the leadership of the party."
It doesn't get more complicated than that.
Sure, everyone prefaces their remarks with comments like: "Stelmach is a nice guy and he means well," but few are able to get past the royalty review fiasco.
"This government demonstrated its lack of understanding of the province's major industry during the royalty review last fall. Calgarians who understand the energy sector are going to struggle to vote for the provincial Conservatives," said Brett Wilson, chairman of FirstEnergy Capital Corp.
Unfortunately, Wilson went on to say that the Liberal position on the energy sector didn't demonstrate a better understanding of how the industry works, either.
But it goes beyond that.
Stelmach, who was speaking with this newspaper's editorial board Tuesday, appears to be reading and interpreting comments and signs more optimistically than what is being suggested by the rest of the electorate.
He still believes his government struck the right balance on the royalty review and that a sign of his leadership is that, apart from looking some specific issues facing "deep gas, lateral spurs and sour oil," there will be no changes to the existing structure that comes into effect in 2009. And he stands firm that the government's position that renegotiating the oilsands leases held by Suncor and Syncrude cannot be construed as having torn up the existing agreements; this despite the fact the government effectively didn't give either company a choice: it was negotiate, or else.
In response to a question asking whether he believed that companies such as EnCana Corp. or Canadian Natural Resources had pulled capital from Alberta and chosen to allocate it elsewhere, Stelmach said that was not the case. Instead, he rhymed off statistics that 3,000 wells had been spudded in January. The actual number of completions for both oil and natural gas in Alberta last month amounted to 1,739 wells.
At this point, drilling levels are behind where they were last year, partly the result of low natural gas prices as well as companies choosing to put their drilling dollars in either British Columbia or Saskatchewan because of the new royalty structure. Even if the drilling activity rebounds in 2008 and takes the heat off the consequences of the royalty review, as some suggest might happen because the commodity price environment is more optimistic than originally thought, it won't erase the distrust of the provincial Conservatives now coursing through the oilpatch.
While the premier addressed the pressing labour issues in the province and the need to bring people here, some of his solutions fell short of, well, being real solutions.
His ideas to address the labour crunch -- including the small increase in arts funding that is supposed to attract more people to Alberta and keep them here, boosting post-secondary education or decreasing the high school drop-out rate -- were thin on details. And when it came to health care -- another issue plaguing employers because of the lack of access -- a concrete answer was not forthcoming.
The reality is that in addition to the anger lingering over the royalty review, the energy sector is tired of bridging the government's gaps -- whether it's health care, education or social services -- Stelmach's responses didn't offer any comfort that his government really had a plan to address the challenges facing these sectors.
He might think that a 20-year infrastructure plan is what people are looking for, but last anyone checked, even the Soviet-era regimes didn't put forward 20-year programs.
Stelmach also talked about Alberta being a leader in the country in the area of managing the environment. The fact he had the audacity to even go there is proof again that the premier doesn't quite get the big picture. Clearly he has not grasped the impact of British Columbia's budget last week, a document that included some bold initiatives to address climate change. Whether he likes it or not, the energy sector has been quietly applauding B.C. Premier Gordon Campbell's plan and asking themselves "why can't we have someone who thinks like that?"
When the business community goes to vote Monday, the only agenda it will have is one of changing the leadership of the provincial Conservative party. Either it will happen by voting for the Conservative candidate in their riding -- with the understanding that the support is being conditionally given for the purpose of starting an internal leadership review -- or by casting a protest vote that will see the Conservatives end up with a smaller number of seats.
Either way, the premier has lost the confidence of the business community and this election -- no matter what the outcome -- will almost certainly start the process of finding his successor.
AI
