By Roger Soucy
. . . I would like to address a few pressing issues. The first is the industry’s reaction to thepublic perception results that came out of the royalty review panel report and the new royalty program for Alberta. There is no question that the industry, and by that I am referring especially to its leadership, felt blindsided by the results of the royalty review panel, the government’s response and the subsequent changes to the royalty regime. After decades of a close working relationship between industry and government, the approach taken in these recent changes broke the comfortable evolution that had shaped that rapport. On top of this, the public, including the industry’s own employees, were shown, through opinion polls, to strongly support measures to extract more from industry. The initial reaction from industry could rightly be construed as knee-jerk. The norm had been thrown off-balance and we felt the need to correct, at the small end of the scale, what we perceived as wrongimpressions, and . . . fire a broadside at the other end of the scale by going into “attack mode” in the media and otherwise. The results of this were predictable. The industry’s poor attempts at explaining that economic activity would migrate to other jurisdictions were construed as posturing. When that didn’t work, we all banged the drum of the economic contributions industry make to the province. And when that didn’t work we all went quiet to lick our wounded egos, and tried to figure out what the hell went wrong and what we were to do about it. Well, a lot the analysis is in and we found out that the public does not necessarily see the world the way we do. It’s not good or bad; it’s just the way it is given the circumstances the province finds itself in today. The public’s perception of industry has changed and it is time that industry adjusts to that perception and develops an approach that reflects and respects those views. There is a lot of work ahead in making these adjustments, but if we want to regain the support of the public and maintain a social license to operate in the long term it is imperative that this be addressed. The time for pouting is over. We must move ahead. To that end, I am pleased to note that on April 11 PSAC announced to its members that it will shortly be rolling out a public perception program designed to address the circumstances we find ourselves in and within a capacity that the service sector is able to sustain. It is a program designed to co-operate and integrate with other industry efforts on this front and incorporates a long-term view as this will take a number of years. As part of these efforts, we must determine how and why the public came to this place. We must give them the opportunity to voice their concerns, air their frustrations, and tell us more of why they feel the way they do. In turn, the industry must actually listen . . . making a concerted effort to truly hear these concerns, and then act on them. Only then can we expect our message to be listened to, and hopefully accepted.
CONVENTIONAL INDUSTRY A FOUNDATION
On another matter, I would like to comment on the Alberta government’s recent Speech From the Throne as it applies to the oil and gas industry as a whole, and more specifically to the oilfield service sector. I will address four of the government’s five priorities. In doing so I would like to note our government’s complete lack of reference to the conventional oil and gas industry – the segment of industry that has contributed economically and socially to the foundation of the province for decades. Now, I do not want this comment to be taken in a negative connotation. Rather, it is a reflection on the fact that, with a current focus on the oilsands and all that it offers for the future, the conventional industry is hardly registering a beep on the government’s radar. It’s like the clock has turned to midnight and the girl you brought to the dance no longer measures up, and so now you want to take someone else home. And while the talk may be all about the oilsands and heavy oil (known as the “unconventional industry”), I would like to make the distinction that the conventional industry – those 12,000+ oil and gas wells being drilled this year – is still the backbone of this province and is its great- est source of revenue, both through royalties and otherwise. Now in saying this, I would like toreference the first government priority
on which I will speak, which relates to “broadening Alberta’s economy.” This priority speaks to the fact that “our future economy must be a stable foundation for continued prosperity” and that “new ideas and new technology will be the keys to Alberta’s continued economic vitality.” I would like to believe that in this province the conventional oil and gas industry has supplied that foundation and will continue to be there for the province for a long time to come, and in a significant way. The conventional industry here in Alberta is also a global leader with regards to technology and a constant flow of new ideas. Many of these technologies and ideas end up in other industries and many other technologies are adapted to the petroleum industry. My belief is that Alberta should grow and diversify through the strengths of its domestic industries of which the oil and gas sector is prominent. The throne speech notes that “this government will never take for granted the cultural and economic importance of vibrant rural communities.” I would point out that the oilfield services sector has tens of thousands of individuals working within every manner of community, in every corner of the province. As such, the conventional oil and gas industry is an important contributor to the vibrancy – and even the very existence of many of these communities. I note that in the section of the throne speech related to “infrastructure,” it is mentioned that the government “will continue to implement a plan to improve traffic safety . . . to have the safest roads in the world.” The conventional petroleum industry has, for a number of years, been a strong proponent of such programs and has developed its own program to address the safe use of roads. We have also shown an interest in working with other groups in society to deal with this matter, and so this is a key issue around which industry and government can and must come together for the greater good. In the section dealing with “sustainable resource development,” the entire focus of the discussion is on the oilsands. Again, this is not altogether surprising given the focus the oilsands receive internationally and the related future benefits. However, the oilsands, being that better looking girl at the dance when the clock strikes midnight, has a few warts of her own under that powder.
According to a study focused on the conventional industry, entitled “Ramping Up Recovery,” to be released in June by the Petroleum Technology Alliance of Canada (PTAC), indicates that the conventional oil and gas business has a potential six billion barrels of oil and 22.5 trillion cubic feet of non-associated gas that could potentially be recovered from pools, in large part, located in Alberta. The study, originally completed in June 2006, gave a value of $1 trillion to the resource. One can imagine its value now at today’s commodity prices. This is a resource whose location is known, its infrastructure is in place and the environmental footprint has already occurred. I suggest that this would be a good candidate for sustainable development. And in the final priority that I will address – Building Strong, Safe Communities – the government notes that “a high quality of life, and culturally diverse and vibrant communities are important to Albertans – and are increasingly essential in attracting and retaining the skilled workforce our province needs.” As I noted earlier, the conventional oilfield service sector is in every corner of the province in the largest and smallest communities. We have been at the forefront of working to attract skilled workers and building communities. The conventional oil and gas industry is still the foundation of this province and its workforce. The government also mentions that “during a crisis Albertans expect their government to respond quickly and effectively . . . and so they plan to take steps to enhance emergency preparedness.” As a plug for PSAC and its members, I note that we have been strong financial supporters for over of decade of STARS [Shock Trauma Air Rescue Service], one of the pre-eminent emergency response organizations in the province. And so in saying all this, I hope that a case has been made for the province not to forget the industry sector that has brought Alberta to this point of advanced development and prosperity, and let’s not forget the future that the conventional industry and this province still have together. In short, I believe that one should go home with the one who brought you to the dance.
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