Alison Redford has noted a significant loss of support for the Progressive Conservatives since the revealing of the 2013 budget.
Some may simply chop this up to the repeated cases of wasteful spending by the PCs, and if you look at most comments that is where the criticism stops. In general, based on the commentary surrounding this situation I would have to say the basic perception is that Alberta is more or less stable if the government wasn't wasting all the money.
However, our situation runs much deeper and I forecast that even if the PCs lose the next election whatever government that comes in will simply discover the situation isn't nearly as rosy as we've all been lead to believe over these years.
This really is the primary challenge that any person or party or whatever is going to come up against if we try to change anything in Alberta to adapt to our current situation, that Albertans have been lied to for so long about how rich they are that it's gone to their heads.
This all comes back to the concept of 'oilsands prosperity being a lie'. Note that despite that the temporary bitumen bubble has disappeared the financial issues remain. This is to be expected as the bitumen bubble was never really the problem but rather the bi-directional price of oil as a whole over these last few years.
What needs to be understood by everyone, all parties, all Albertans, is that the incredible profit we were seeing prior to the collapse of 2008 was due to the exponentially rising oil price. It was not the significance of the actual oil price that mattered but rather the velocity and direction in which it moved. This has all been explained countless times on this blog.
The current need for spending derives from the massive infrastructure requirements needed to facilitate these projects and unless the oil price velocity and direction resume what they were doing previous to 2008 (which they won't) we will never see the sort of profits we were making again.
Alberta's biggest mistake, which can not be reversed, is that it wasted all of the profits it got on stupid gimmicks instead of investing it in the future. On this I will not argue, but the fact is it's done, that money was spent, and it's never coming back.
If you're going to be upset about anything, don't be upset about the spending happening today but rather be upset about the lies of prosperity that were told in the first place. Be upset that the government by over-hyping the "total recoverable reserves" and downplaying the "daily production" has convinced some Albertans that we are of the same energy production capacity as Saudi Arabia.
Maybe this is why support is dropping so fast for the PCs after this budget, because for the longest time Albertans have been told of how superior their debt-free status is and of how prosperous their oilsands industry makes them. There is a lot of programming that needs to be undone. Convincing Albertans that the tasks at hand need to be done may be harder than actually pushing through the tasks.
Any incoming government will either have to address or cover-up this issue of such a low energy return on energy invested with the oilsands. It's getting harder and harder to cover the gap in revenue vs. the need for infrastructure. Question is, will anyone believe them?
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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for CenturyLink
Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.
Excellent piece, Richard. So, how does this end? Margaret Thatcher likewise squandered Britain's North Sea oil bounty and left little to show for it. She also took that money into current revenues.
ReplyDeleteWhy do we treat non-renewable resources as though they were renewable or infinite? I suppose the temptation for limited-vision, electoral-cycle politicians is irresistible.
What do you make of Redford's bizarre claim that the problem is bottlenecks preventing massive increases in growth of bitumen production? It seems she (and Harper) simply want to double down on an already bad bet.
This gravity defying act that is the Athabasca tar sands must end at some point but I wonder what will be the aftermath for Alberta and for Canada? What happens if high-carbon bitumen becomes stranded?
Yes, and look at Britain now: http://www.euronews.com/2013/04/19/uk-stripped-of-aaa-rating-by-fitch/ - Alberta is on this same path, in fact a worse one as oilsands EROEI is much worse than what they had. We have already depleted the sustainability fund in just a few short years. Only option left now is debt.
ReplyDeleteThe reason why certain interests are so hell bent on keeping us on fossil fuels primarily is not a fear of the "alternatives" (derivatives) but rather derives from a need to control. Major energy companies already own all the patents to the desired alternative energy but the main issue is that it can not be centrally controlled. IE: Any farm can have a wind turbine, any house can have a solar panel. This is why offerings from Enmax etc demand you stay linked to their centralized grid, to keep control. This is also why they are strongly pushing hydrogen fuel cells as they can be centrally controlled and distributed.
The control is important because it gives purpose and meaning to the bank currencies. Because currency represents money and money represents energy the way they keep the industrial hamster wheel in motion is by forcing you to purchase energy from them and the only currency they accept for it is the approved currencies. Allowing people to independently create and manage their own energy would set a foundation for trade they can not control.
This is why it is not oil companies who run gov'ts, but banks. Oil companies are bank-rolled by the banks, it's the banks interest to keep their currencies circulating through loans which must be facilitated by infinite growth as there is always more debt than wealth in existence.
The people at the top know this system of control is failing, largely due to the limits of growth: peak oil, climate, etc. So what you are seeing in regards to events like Boston: http://canadiantrends.blogspot.ca/2013/04/dangerous-precedents.html is a slow move to return the world population to the previous system of control, feudalism, but implemented and enforced with modern tech. This is also why they are eliminating the middle class.