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Archive for February 28th, 2008

Environment trumps oilsands: poll

Posted by mhudema on February 28, 2008

Darcy Henton
The Edmonton Journal
Suncor's on-site oilsands refinery as seen from the air.
CREDIT: Calgary Herald, file
Suncor’s on-site oilsands refinery as seen from the air.

EDMONTON – Nearly two-thirds of Albertans say the government should limit greenhouse gas emissions produced by oilsands development, even if it means some projects would be delayed or cancelled, according to a new poll.

The Leger telephone poll, commissioned by the Edmonton Journal and Calgary Herald, also suggests 57 per cent of Albertans believe the Tory government isn’t doing enough to reduce carbon dioxide emissions.

But the same poll suggests 40 per cent of Albertans plan to vote for the Tories on March 3 — enough to give the party an 11th majority government.

Sixty-two per cent of respondents favoured a limit on oilsands emissions.

“Environment is important to them,” said Leger vice-president Marc Tremblay. “They want the government of Alberta to be more active in reducing Canada’s greenhouse gas emissions.”

The opinions expressed in the poll run contrary to Premier Ed Stelmach’s plan to gradually curb the harmful emissions over the next four decades.

But David Taras, a political analyst at the University of Calgary, says the poll’s contradictory message indicates Albertans are miffed with the government, but not enough to toss it out over the issue.

“It seems that the public is very, very concerned and has sharp differences with the Stelmach government on this, but it doesn’t translate into an election issue. Why? I don’t know,” Taras said.

“There’s a disgruntled public at odds with the government, but willing to elect it again.

“The government will be able to skate away from it — at least for now.”

Stelmach’s plan, which doesn’t call for greenhouse gas reductions to begin for another 12 years, aims to cut emissions to 14 per cent below 2005 levels by 2050.

Alberta Federation of Labour President Gil McGowan says that’s bad for Albertans, environmentally and economically.

“We think that taking action on greenhouse gases is not just a social and environmental imperative. We also think it is an economic imperative,” said McGowan, whose organization represents 27 unions and 140,000 workers.

“We’re afraid that if the Stelmach government doesn’t get serious with dealing with climate change, Alberta may be shut out of its major market because states like California, New York and Michigan are introducing very strict greenhouse gas initiatives.”

McGowan fears that as Alberta’s biggest customers get “greener and cleaner” they’ll shun oilsands products.

Stelmach has refused to put the brakes on oilsands development despite advice to do so from people like former Alberta premier Peter Lougheed, and has maintained that “hard caps” on carbon dioxide emissions would cost hundreds of thousands of jobs.

But Leger’s Tremblay says Albertans are telling all party leaders that they’re willing to make sacrifices to help Canada reduce emissions that are believed to cause global warming.

“It’s a delicate balance to strike,” Tremblay said. “You have to make sure you are not discouraging investment.”

A new Statistics Canada report released Wednesday shows just what is at stake. It predicts that investment in Alberta’s oilsands will continue to soar this year, and for the first time in the country’s history, will exceed spending in all of manufacturing across Canada.

The poll numbers suggest three-quarters of Albertans disagree with the Liberals plan to phase out natural gas rebates.

“It’s not political suicide, but in a campaign where all the parties are doing as much as they can to attract votes, anyone coming out and saying they want to eliminate natural gas rebates would not be scoring any points with Albertans,” Tremblay said.

The poll also suggests that Albertans are divided over whether the province should adopt public auto insurance. Forty-six per cent said no to the proposal and 41 per cent supported it.

Far more Edmontonians (48 per cent) support the idea than Calgary residents (37 per cent).

Despite controversy in Alberta over soft tissue injury caps, Stelmach has said public auto insurance is a non-starter in Alberta because he believes it has been a failure in other provinces.

The poll also suggests that 53 per cent of Albertans now support Stelmach’s compromise royalty regime, up from 47 per cent in an online Leger poll last October.

The Leger Marketing poll was conducted Feb. 21-25 by telephone among 900 randomly selected Albertans. It is considered accurate with plus or minus 3.3 percentage points, 19 times out of 20.

© The Edmonton Journal 2008

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Reining in oil sands

Posted by mhudema on February 28, 2008

Election Day in Alberta is six sleeps away and the fight has been mostly quiet, not even generating front-page news every day in the province, which pretty much means investors outside Alberta aren’t paying attention at all.

But they should. For years, Alberta has allowed energy development to proceed at a breakneck pace, basically as fast as possible. This was accepted by the citizenry at first, given the boom-bust history of this place and the general sentiment of not messing with a good thing. But with a lack of government planning, that good thing has turned bad: overcrowded hospitals, a shortage of housing, the highest inflation rate in the country. And Albertans know it all stems from the unbelievable building boom in the oil sands, so many billions of dollars being poured in each year, bringing high-paying jobs to some but distorting life for many.

The pace of development, never questioned by the Conservative government, is now a serious front-page issue. Savvy investors should take note. Yes, the topic is still simmering, rather than exploding, but for investors pegging X barrels a day in their spreadsheets, set to start producing in 20XX by ABC Oil Sands Corp., the pace of regional development around Fort McMurray is now a business risk.

That’s why some big oil companies are actually calling for a slowdown, asking the government to restrict the sale of new exploration leases in three fringe areas. The slowdown is an obvious smokescreen, which my colleague Derek DeCloet explains in greater length in Tuesday’s Report on Business. The oil companies are trying to head off something worse, so they offer three non-prospective areas for “protection” for a couple years while continuing to mine and develop everything else with abandon.

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