The Alberta Deficit.

the caracal kid

If Ralph’s a friend, who needs enemies?

by Andrew Nikiforuk. (Published in the Globe and Mail September 28, 2005)

His government is scooping up Alberta’s resources – and its future – to pay those petro dividends, warns Andrew Nikiforuk

Ralph Klein has taken time out from his Jean Chretien retirement course to issue prosperity cheques. The media can't gush enough about his beneficence; other Canadians are envious. Everyone wants some "Ralph bucks." But please don't envy us. Whenever a government sends money to its citizens, you can be sure it wants to hide an addiction or buy forgetfulness. And in Mr. Klein's case, the Premier is hoping his prosperity dividend will obscure the province's growing economic vulnerability and a trail of land abuse so grotesque that even Americans in Dick Cheney's Wyoming might shake their heads.
Frenzied gas drilling by EnCana and other land-eaters has turned some parts of Wyoming, Colorado and New Mexico into what even the National Geographic now calls "national sacrifice zones." Alberta, which has no plan other than frenzied drilling, may yet outdo Wyoming on the sacrifice scale. According to Statistics Canada, Alberta is now the country's largest single producer of cattle, natural gas, oil, bitumen, coal-bed methane and unplanned urban growth. The Alberta Genuine Progress Indicator, just published by the Pembina Institute (a non-profit energy watchdog), says that if everyone spent their natural capital so liberally, "five planets would be needed to meet global consumption demands.
To print Ralph bucks, the province has systemically looted one landscape after another. Forty years ago, Alberta's boreal forest was a wilderness; today, provincial records show that 90 per cent has been seriously fragmented by roads, well sites, seismic lines, pipelines and power lines, and what isn't being drilled is being logged. In Drayton Valley, southwest of Edmonton, the government allows companies to build highly toxic sour-gas wells so close to people's homes that many Albertans live in what's known as "emergency response zones" (in the event of a leak or accident, they would die or suffer permanent brain damage if not evacuated in time). There are as many as 52 such zones; to be located inside one devalues a home by an average of $6,000, But, property devaluation is par for the course in Alberta.
The eastern slopes of the Rockies, Alberta's signature landscape, is now slated for gas drilling so intensive that within the industry it's known as "carpet-bombing." Watersheds and fescue grasslands - which can capture more carbon dioxide than forests (maintaining these lands is the province's smartest climate-change fighter) could all be destroyed to make a few more "Ralph bucks."
To accommodate urban sprawl and other goodies, the government admits that it has over-allocated water from every major river in southern Alberta - an area experiencing a 3-per-cent economic growth rate. In 50 years, no one expects to be able to float down the Bow or Oldman rivers.
To please Dick Cheney, we are now liquidating Alberta's No. 1 revenue earner, natural gas, faster than VLT gamblers can eat up cash. Even with a quarter of the world's drilling rigs at play in Alberta, production is dropping by 3-per-cent a year (according to Dave Hughes, a geologist at Natural Resources Canada). We have a nine year supply of conventional gas left - and the sorry replacement,
coal bed methane, promises to fragment more land, threaten more water, use more energy and unsettle more rural Albertans than all previous drilling combined.
The much vaunted oil sands, Alberta's original "provincial sacrifice zone," remain a sobering study in mega project mismanagement. It's not likely that the world's biggest holes in the ground will ever be reclaimed, and most projects are already being dogged by the rising costs of steel, water, solvents, natural gas, manpower and basic infrastructure. Even industry sources describe the province's cumulative impact planning as "dysfunctional."
Although Mr. Klein pretends that Alberta is deficit-free, don't believe it. The provincial oil-and-gas regulator (the Alberta Energy and Utility Board) reports that the oil patch has $9-billion worth of wells and gas facilities that haven't been cleaned up - and has only set aside $20-million for the job. Alberta Infrastructure Minister Lyle Oberg admits that the province has a $7-billion backlog in work on schools and roads. A $1billion water strategy has gone largely unfunded. Growth, of course, never pays for itself. But you'll never hear that truth in Alberta.
When a society greedily eats its children's future, the social indicators generally look bad. Pembina's sobering, 51-page Genuine Progress Indicator reports that Alberta has Canada’s highest rate of car crashes and fatalities, a divorce rate that grew by 357 per cent in the last 40 years and one of the worst gambling records anywhere. Albertans now spend more on gambling ($2-billion) than the province earns from oil revenues. Many consider it Mr. Klein's most impressive legacy.
Saving for the future, a nobrainer, just isn't happening. Norway has a rainy day petroleum fund worth $100-billion and Alaska has a $35-billion fund (plus its own petro cheques). Yet Alberta hasn't put one penny in the province's static $12-billion Heritage Fund since 1987. With Ralph bucks, who needs to worry about rainy days or grandchildren?
The worst is this: Alberta can't even be bothered to collect a fair share of its fossil-fuel wealth. Between 1995 and 2002, Norway and Alaska collected twice as much revenue from their oil and gas reserves. In contrast, Alberta simply let the profits slip south of the border. Our one-per-cent royalty rate for oil sands remains a continental embarrassment.
The poet Sir Walter Scott once asked if there breathed a man "with soul so dead/Who never to himself hath said, `This is my own, my native land!'" Gamblers with petro bucks can't be bothered with such reflective nonsense. Envy us? Hell, no. Envy Norway.
Andrew Nikiforuk is a Calgary journalist and author of Saboteurs: Wiebo Ludwig and the War Against Big Oil.

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