I spent four years in the Alberta legislature with Rachel Notley, from 2008 to 2012. I liked and admired her and was delighted when she became premier in 2015. Today when I watch her on pipeline and oil issues I ask myself, what happened to the Rachel Notley I knew? And I wonder if the same thing will happen to John Horgan.
Before they formed government, Rachel Notley and the Alberta NDP were effective critics of the oil industry who called for higher royalties, solutions to global warming, and upgrading more bitumen in Alberta. In the political blink of an eye they became crusading champions for Texas-based corporation Kinder Morgan, which wants to expand its Trans Mountain pipeline to carry raw bitumen from Alberta to the port of Vancouver, to be shipped for processing abroad. The companies that extract Alberta’s bitumen are mostly foreign owned and pay as little as one per cent in royalties, and they have tens of billions of dollars in unfunded environmental liabilities at risk to taxpayers.
So how to explain Notley’s reversal? Let’s start by dispensing with some myths being spread by her, the media, and industry.
First, this is not about getting more royalties. Royalties are the price industry pays to buy the raw bitumen from its owner, the Alberta government. Alberta’s royalty rates were chopped to fire sale levels in 1997 by the Klein government and Notley has left them there. In 2016, for example, Syncrude had gross revenues of $3.4 billion and paid a mere $37 million in royalties, just over one per cent. The past two years the Alberta government earned more from liquor sales and gambling than from selling almost three million barrels of bitumen a day to big oil companies. It is a silent scandal Alberta’s NDP government refuses to address.
Second, building or blocking this pipeline is neither an economic bonanza nor an economic disaster for Alberta or Canada. Trans Mountain will reduce transportation costs for oil companies and open new markets for bitumen, but its capacity only covers about 12 per cent of Canada’s total oil production, and alternate pipeline projects are underway.
Third, this is not about creating long-term jobs, because pipelines take only a few people to operate and the oil industry is replacing people with technology everywhere it can. Neither is it about economic development: shipping raw material for processing in other countries is the model for colonies, not for fully developed economies.
So why is Rachel Notley throwing the country into political crisis?
The easy answer is that it improves her chances in next year’s election, but that glosses over this much deeper reality: Rachel Notley may be in office but the oil industry is in power. Wherever its interests are concerned the oil industry runs Alberta. To a lesser but significant degree the same thing applies in Ottawa.
Here is what I mean. Governments are made of many parts and in a healthy democracy these parts counterbalance one another. Opposition parties counterbalance governing parties; the courts counterbalance legislatures; regulators counterbalance industries, and so on.
Not so in Alberta, at least not when the interests of the oil industry are at stake. For decades the industry has spent millions of dollars targeting political parties on both sides of the legislature; civil servants; universities; think tanks; regulators; non-profit groups; the media; and more. The industry has formed a state within the state that I call “oil’s deep state.”
The 2016 conviction of Bruce Carson on charges of illegal lobbying relating to the oil industry exposed how oil’s deep state operates. Carson had been a close adviser to prime minister Stephen Harper. Material seized by police and presented in court showed the oil industry’s sweeping strategies and remarkably close relations with political leaders, top federal and provincial civil servants, and universities. In her verdict, the judge found it was “especially egregious” that the public “had no knowledge of what was transpiring behind the scene with ministers, deputy ministers, and other very senior officials in government, both federal and provincial” as the oil industry worked to shape national energy policy to meet its private commercial interest.
The oil industry takes what it calls a “whole of government approach,” a phrase that should chill the bones of anyone who cares for democracy. A July 2017 strategy document by the Canadian Association of Petroleum Producers (CAPP) made clear what a whole-of-government approach means for Alberta: a “steering committee” drawn from industry; the premier’s office; the ministries of energy, economic development, and environment; and the Alberta Energy Regulator, that “would provide government and industry oversight to…drive performance on key files.”
It’s a deliberate short-circuiting of democracy. Industry sits at the table with senior politicians, civil servants, and regulators (some of whom are already close allies of industry) to “provide oversight” on issues like environmental protection and Indigenous land claims. A more blatant display of corporate power in a modern democracy is hard to imagine, and the same CAPP document advocates a similar approach to the federal government. Industry is entitled to input on these issues, but not to oversight.
Will oil’s deep state gain control of B.C. and John Horgan? Vast sums of money and talent are being trained by industry at B.C. to get the Trans Mountain pipeline built. Intense meetings will be underway with MLAs of every party; civil servants will be invited to join steering committees with industry, or perhaps jump to richer positions in industry; grants will be dangled at universities and think tanks by oil-friendly interests; regulators will be pressed; reporters will be charmed; and chambers of commerce, service clubs, municipalities, and First Nations across the province will be pumped with sophisticated pro-oil-industry messages and encouraged to speak out as if on their own initiative. Meanwhile issues such as global warming, healthy economic development, and Indigenous land claims are further delayed.
This is a bitter situation for Canadians to face for the sake of a pipeline, but it’s reality when oil’s deep state runs governments.
Kevin Taft led the Alberta Liberal Party from 2003 to 2008. He is author of Oil’s Deep State, published by Lorimer in 2017.