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NDP to release new energy royalty framework at week's end -- brace yourself for Apocalypse Friday!

Dave Mowat

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Brace yourself for a storm of hostility from many of the usual suspects on Friday when Premier Rachel Notley finally releases the province's new royalty framework, based on the report and recommendations of the Royalty Review Advisory Panel headed by Dave Mowat, CEO of Crown-owned ATB Financial.

The panel was announced last June by Energy Minister Margaret McCuaig-Boyd, not quite two months after the election of a New Democratic Party majority government, in fulfillment of an election promise.

Since then, the Wildrose Opposition led by Brian Jean has fought a bitter rear-guard action against the idea of any change to Alberta's royalty structure, pointing to the sagging state of the economy as justification. In this, it would be fair to say Jean enjoys considerable support from panicked oilpatch workers facing the prospect of layoffs in the volatile energy sector.

At the same time, there will be considerable pressure on the Notley Government from its supporters to follow through at least with a structure for oil royalties that can increase when oil prices rise again.

The debate will likely be framed by the government as an imperative need to think about how to run the province and its principal industry in the next decade, as opposed to the way we did it in the last one. As Mowat has stated during the review process: "It's just a different world now." And so it would seem to be!

The discourse, I suspect, will be framed by the opposition with the notion that if we only leave everything alone and persist in doing things the way we did in the past, everything will be perfect again. Indeed, I wouldn't be surprised if the Opposition Party is composing an angry press release saying just that as this post is written.

As such, the framework to be released Friday -- after which we’ll all have a nice weekend to scream at each other about it -- will be both a technical and a political document of considerable importance.

A lot will hinge on the government's success persuading Albertans the approach set out in the framework will yield benefits, and the possibility is very strong it could be the central issue in the debate about the political and economic future of Alberta right through to the next general election in May 2019.

The tone of the initial commentary in Wildrose circles is likely to be loud, and very strident. Some of the more extreme elements among the Wildrose Party's support network, including an operative for Ezra Levant's so-called Rebel Media, have already labeled Mowat a handpicked stooge of environmentalist and former U.S. Presidential candidate Al Gore whose job is "to spread the global warming religion."

Some of the other members of the panel -- Beaverlodge Mayor Leona Hanson, energy economist Peter Tertzakian and University of Winnipeg President Annette Trimbee -- have been subject to some of the same sort of bizarre conspiracy theorizing among elements of the Rosers' substantial lunatic fringe.

That does not mean decision-makers in the oilpatch will react with the same fury, however.

As has been suggested here before, while the top dogs in the patch keep the pressure on the Notley Government not to raise royalties too much, they're almost certainly privately relieved the review took place while oil prices were low and they could make a plausible argument royalties should not be increased too much.

A technical briefing for media will be held in Calgary on Friday morning, followed by an embargoed news conference with Mowat, which is a new one to me. There will then be a traditional news conference with Premier Notley, after which the news will start hitting the airwaves around noon.

Meanwhile, until that apocalyptic moment, we can focus on the federal government's announcement of interim principles for reviewing Canadian energy infrastructure projects, also a controversial topic in Alberta.

Environment Minister Shannon Phillips found the federal glass half full. "We have made very little progress in that direction under the former federal government's rules," she said in a statement yesterday. "If these new rules will allow the issues to be heard and then to get to a decision, then they will have helped the process. We are pleased to hear that no existing projects will have to go back to Square One of their review process. A regulatory reset would have added years to this work.”

Jean, predictably, found it half empty. "This announcement of more red tape and more delays, specifically around Energy East and Kinder Morgan's Trans Mountain Pipeline expansion, is disappointing."

Until Friday, then…

This post also appears on David Climenhaga's blog, AlbertaPolitics.ca.

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