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Going back to the future; Kenney poised for government intervention
Gary Park for Petroleum News
Alberta Premier Jason Kenney has signaled he is ready to turn the clock back almost 50 years in his province by investing directly in energy projects - a move that could see First Nations become a key player.
When Alberta was last in as deep an economic crisis as the one it faces now, the far-sighted government of then-premier Peter Lougheed swallowed its pride as a free-enterprise administration and launched the Alberta Energy Co., AEC, which morphed over time into Encana (now Ovintiv) and at one point held the largest market value of any company on the Toronto Stock Exchange.
Kenney has hinted his administration is ready to “act” in the face of federal regulatory uncertainty and opposition from special-interest groups by “investing directly (to) support companies and Indigenous groups to assure the future of responsible resource development.”
He said the government has one such investment in mind, is open to considering others and could soon start selling shares.
Foreign pullout For now, state-financed undertakings are the only hope for stemming the pullout by foreign-based investors, suggest many observers.
Such a move would be pinned on hopes of replaying the AEC success story when thousands of Albertans put up their own money to launch investment-hungry resource projects.
Despite the continuing setbacks to the oil and gas industry outlook, Kenney insists Alberta “will not be stopped ... we will not be shut down.”
On the heels of Teck Resources’ decision to abandon its C$20 billion Frontier oil sands mine, Kenney lashed back at “urban green left militants,” who he accused of destroying the hopes of Indigenous communities in northern Alberta.
He said those activists, many believed to come from outside Canada, have denied First Nations their best chance to move from extreme poverty a “path forward,” taking advantage of skilled construction jobs and millions of dollars in benefits agreements with major project proponents.
Kenney said those hopes have been stalled of because of “uncompromising, ideological opponents of any resource development,” he said, pointing his finger at Jane Fonda, Leo DiCaprio and other Hollywood celebrities including movie producer James Cameron, who made one-day trips on their private jets to the oil sands, promised First Nations financial and moral backing to shut down the sector and have never been heard from since.
“Are they going to go to their rich friends in Hollywood and raise billions of dollars to invest in a new industry in northern Alberta ... and provide a future for young people in those Nations? No. They’ll forget all about it.”
Indian Resource Council of Canada Chief Roy Fox, of the Kainai/Blood Tribe, praised the Kenney government’s willingness to work with Indigenous partners through a government corporation that is offering C$1 billion to backstop Indigenous investment in resource projects, including pipelines.
The next key development will be the Canadian government’s response to First Nations’ bids for ownership stakes in the Trans Mountain pipeline expansion.
Among those counting on a breakthrough is the Indian Resource Council of Canada, IRCC, speaking for more than 130 Indigenous communities and which attracted more than 400 delegates to a late February conference in Calgary.
IRCC Chief Executive Officer Stephen Buffalo made no apologies for tackling the issues facing those eager to develop natural resources.
“We can’t just dance around what is in front of us,” he said. “If we make people uncomfortable I think we are doing our job. We have to find better solutions.”
Teck decision ‘devastating’ The cost of failing to take an aggressive stance is evident in Teck’s decision to shelve the Frontier project.
Ron Quintal, president of the Fort McKay Metis Nation, said the result is “devastating” to the 14 Indigenous groups that signed benefits for the oil sands mine and has left the broader energy industry grappling with “disappointment, fear and anger.”
He said Teck was a Canadian-based company “that did everything right ... if they can’t get a project built, who can?”
Instead, First Nations are faced with a growingly bleak landscape, littered with the shattered hopes for more than C$100 billion of ventures - the C$20 billion Frontier proposal; TC Energy’s plans for a C$15 billion Energy East bitumen pipeline to the Atlantic Coast; Petronas’s C$36 billion Pacific NorthWest LNG application; China’s CNOOC decision to scrap its C$28 billion Aurora LNG project; and the ExxonMobil withdrawal of its application for the C$25 billion West Coast Canada LNG project.
“The root of all this is that (Canada) is not united behind a vision to develop resources in a responsible way that manages climate change,” said Adam Legge, chief executive officer of the Business Council of Alberta.
The council has called on the Canadian government - in answer to Teck’s criticism - to launch a commission to develop a framework and plan for resource development and climate change.
If a consensus could be developed, the Frontier plans might stand a chance of being resurrected, he said.
- GARY PARK
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