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Alberta's big problem is the same as Russia's -- so what's Stephen Harper doing about it?

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Russia's New Rubles

The Globe and Mail, tireless cheerleader for the Harper Government, was gloating Monday about the impact falling oil prices, a declining ruble and the bite of Western sanctions are having on Russia, which, the Report on Business rejoiced, is being pushed toward the brink of recession.

Woo-hoo! That'll teach those Russkies to try to keep NATO missile forces off their strategic front porch!

As we all know, rattling Canada's largely non-existent sabres at the Russians, exaggerating the threat posed to Canada by post-Soviet Russia and caricaturing Russian President Vladimir Putin as the Beast of the East is a key wedge issue in Prime Minister Stephen Harper's 2015 re-election armoury. It's thought to play well in places like Winnipeg and Edmonton.

To make Russia behave in a properly neoliberal way, it's widely believed, the United States and the invitees to its geopolitical party, including Harper's (neo)Conservative government in Ottawa, have been doing everything they can to persuade the OPEC countries to keep their oil wells pumping at the highest possible rate, thereby keeping oil prices low.

If OPEC's members were to cut back on production, energy prices would go rocketing back into the stratosphere, to Russia's considerable benefit, not to mention the Islamic State's.

But as long as OPEC keeps pumping, the undeniable squeeze on Russia will get more painful.

But has it occurred to anyone among the governing party's unquestioningly loyal supporters out here in the Alberta Tarpatch that what's bad for Russia is bad for Alberta too? Leastways, it's bad for the Alberta energy industry, which from Harper's point of view is Alberta.

And not just the oilpatch, but those federal Conservative politicians who come from out here in Wildrose Country – Prime Minister Harper among them – whose Thatcherite scheme for the neoliberalization of Canada depends on revenue flow from a booming energy sector and shipments of Athabasca bitumen via pipeline to all points of the compass.

That was the Margaret Thatcher formula, no? Use the revenue generated by North Sea oil to underwrite the massive tax cuts necessary to cripple the welfare state -- or, as people like Harper prefer to think of it, the nanny state. Then, when it's too late to put Humpty-Dumpty together again, Milton Friedman's Shock Doctrine can take over and do the rest.

Harper -- who on Lady Thatcher's death hailed her as "a truly historic figure, remembered for centuries to come," which no matter where you stand on her legacy is hard to argue with -- plans along with the rest of the Alberta Establishment to use the Athabasca Bitumen Sands to do the same thing to Canada, if only they can figure out a way to get its squeezings to market.

Well, I've got news for them: keeping the price of oil low enough to put the screws to Russia isn't going to do any good for the viability of high-cost oil extraction industries like those in the Athabasca Tarpatch and the shale gas fields south of the Medicine Line. We are not talking about sweet 'n' easy-to-pump Saudi crude north of Fort McMurray, folks.

Likewise, engineering low oil prices to crush Russia for the benefit of the U.S. strategic program in Eastern Europe is not going to do anything to improve the economics of building pipelines to Texas, British Columbia and New Brunswick.

Gee, it could turn out that Harper's made-in-Washington Ukraine strategy is the best thing that ever happened to the North American environmental movement and the worst thing that ever happened to our vast deposits of presumably ethical but undeniably expensive-to-process sandy oil.

In other words, the U.S. tactic that Harper is cheering on is effective against Russia, but it's also effective against American ideological buddies in places like Ottawa and Edmonton where neoliberal planners are making the same mistake as their Russian counterparts did during the chaotic Boris Yeltsin era -- hollowing out the country's manufacturing base to rely solely on energy exports to parts of the world that still make stuff, viz., China.

The most important question may turn out the be who has the greatest capacity for pain -- Russians or Americans. I suggest you take a look at the history books to answer that one. It's said here that the Republican Congress's impatient backers in the U.S. oilpatch will cry Uncle long before the Russians, with their proven capacity to endure suffering.

Remember, when you're calculating time lines, Putin is now polling in excess of 80 per cent. Harper's approval rating is around 30 per cent.

So Conservative allies in the Alberta oilpatch have their pips under pressure just like Putin. Here's betting they squeak first. 

Here in Alberta, low oil prices are extremely bad news for the Progressive Conservative government of former Harper minister Jim Prentice, which had been counting on going into an election campaign with a big surplus.

Well, at least they're selling the stuff in U.S. dollars, since falling prices are having the same effect on the Canadian dollar as the Russian Ruble -- which would have helped Canada's manufacturing sector if the Harperites hadn't managed to hollow it out already.

Yesterday, the ever-loyal Globe advanced a fanciful theory about how this "shelters" Canadian oil producers, but even Canada's National Website admitted this can't last for long.

It's also not particularly good news for the Cordilleran Elite that runs Canada or whatever you want to call Harper's crowd, which has been counting on high energy revenues to bankroll their pre-2015-election tax-cutting scheme while still being able to pull a "balanced budget" out of its top-hat.

It will give the Wildrose Party an opportunity to scream about Prentice's mismanagement of the economy, I suppose, but it's hard to see how that will be very persuasive if oil prices remain low all over. Albertans, after all, actually pay attention to that kind of thing, and enough of them know the reasons to be dangerous.

Presumably the great secretive minds of the Harper Government have connected these dots and know that Alberta's big problem, which they'd desperately like to go away, is the same as Russia's big problem, which they're doing their best to encourage. It would be interesting to know what Harper plans to do about that.

Right now, it looks like his violently militaristic anti-Russian rhetoric is aimed directly at his own feet. Ain't it a funny old world?

This post also appears on David Climenhaga's blog, Alberta Diary.

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