Former Wildrose Party leader and United Conservative Party leadership candidate Brian Jean has been talking a big game about how if elected premier he will reverse the “damage” allegedly caused by the NDP government to Alberta’s oilpatch.
But there is just one problem with that promise, which is founded on grounds that are about as solid as quicksand.
Until such a time as OPEC, the U.S. and Russia wilfully and drastically ramp down their own production, which by all indications is not about to happen, the price per barrel is not going to any time soon return to the golden age of $120-plus experienced during the Harper era.
At this point, we will frankly be lucky to see the price go up and actually remain at levels much past $50 per barrel.
And at that price, the cost to extract and process oilsands remains ó despite all of the improvements made over the years ó far too high for investors seeking a serious return on their dollars.
As long as global economics keep down the price of crude, investors will have little to no interest in further developing a costly product that offers at best a marginal return compared with lucrative operations in other more affordable regions.
“It’s time we unleash the incredible potential of our province instead of holding it back,” Jean said in a recent press release.
But should that path not include pursuing and developing other potential industries such as geothermal? There are plenty of unused wells that could possibly be used for such endeavours, putting back to work thousands of Albertans.
Unfortunately, following 40-plus years of Conservative rule that has been blinded by the lust of oil at the expense of basically everything else, this province does not even have in place any regulatory framework for geothermal power.
Who knows, maybe Jean has some super secret plan hidden up his sleeves to personally lobby OPEC, Russia and the U.S. to pretty please ramp down their output to reduce supply and drive the price of oil back up so investors return by the droves to Alberta’s oilsands.
Seems pretty unlikely though.
What would be refreshing to see from the Conservative camp is some new direction that does not keep beating the same old drum.
Any financial consultant worth his or her salt will advise small or major investors to keep a diverse portfolio. To never put all of one’s proverbial eggs in a single basket.
So why do the Conservatives remain so dead set on developing oilsands without ever considering or even mentioning other possibilities?
Promising to restore activity in the oilpatch is nothing more than a political platitude aimed at winning votes, and such a pledge certainly is not grounded in reality.
Then again, it would not be the first time empty promises got a politician elected.
ó Ducatel is the Round Up’s editor