Wednesday, June 13, 2007

A cautionary tale for NL - Petropolitical Law

This Globe and Mail commentary (see also below) outlines the flip side to oil development and the effects of oil revenues on the province of Alberta.

It is based on the ideas of Thomas Friedman and his article, The First Law of Petropolitics published in the journal, Foreign Policy. Freidman posits that as the price of oil, and therefore revenue for the state, goes up, freedom and the inclination for political and economic reform goes down.

If you prefer, you can listen to a discussion of the article with Mr. Freidman himself.

Why is this a cautionary tale for this province? To start, it's important to look at this in relative terms. The rise of oil prices does not mean we will wake up to the premier's brother driving around in a machine-gun armed jeep shaking down innocent truckers a la Nigeria.

But nonetheless, there are corrosive effects to oil revenues to our political and economic environment that can't be denied. This Globe piece outlines the effects already seen in Alberta; if it can happen in Alberta, it can also happen here.

A good argument can be made that there is already evidence that it has happened here; I'll detail that argument later.


Is Canada the latest emerging petro-tyranny?
From Monday's Globe and Mail, June 11, 2007 at 9:14 AM EDT

Every day, the First Law of Petropolitics quietly insinuates its way into the nation's political blood like a rogue parasite. The law, first coined by New York Times columnist Thomas Friedman, posits that the price of oil and the quality of freedom invariably travel in opposite directions.

As the price of crude oil goes higher in an oil-dominated kingdom, the average citizen will experience, over time, less free speech, fewer free papers and a steady erosion of the rule of law. The reason, argues Mr. Friedman, is simple: Oil and gas regimes don't need to tax their citizens to survive because they can simply tax another tar sands project, so they really don't have to listen to their people either.

According to Mr. Friedman, the First Law astutely explains the emerging petro-tyrannies of Venezuela, Iran, Nigeria and Russia. But should Alberta and Canada be added to the list?

By any conservative definition Alberta is already a poster child for the First Law. The government now derives approximately 40 per cent of its income from oil and gas revenue and has been ruled as a one-party state for 36 years. It's no accident that Kevin Taft, the leader of Alberta's fledging Liberal Party, has just written a book about Canada's oil-soaked kingdom called Democracy Derailed. The derailing has seemingly erased distinctions between business and civic affairs. Within six months of quitting his job as Alberta's No. 1 honcho, Ralph Klein (a.k.a. King Ralph) became a paid, senior business adviser in the oil patch for Borden Ladner Gervais LLP. Meanwhile, his former chief of staff, Peter Elzinga, leapt from the employ of oil-sands giant Suncor only to serve as the executive director of Alberta's Conservative Party months later.

Given their one-sidedness, oil regimes fear transparency. This explains why Alberta operates one of the most secretive governments in Canada. Just last year Alberta's Conservative government made it legal for its petro-tyrants to lock away internal audits for 15 years and for government ministers to keep their briefing binders out of public view for five years.

Making propaganda is also one of oil's many antidemocratic characteristics. The Alberta government currently spends $14-million a year and employs 117 full-time staff in its Public Affairs Bureau to tell Albertans what to think. Not even President George W. Bush employs a propaganda arm this large in the White House.

The tone of government has also become increasingly authoritarian. Alberta Premier Ed Stelmach, for instance, declares that he can't even touch "the brakes" on rapid development in the tar sands any more than his counterparts in Venezuela or Russia can, say, touch the brakes on aggressive nationalization. Alberta has also sacrificed the rule of law. It seems whenever open public debate threatens to challenge another government-sanctioned energy project, the Energy and Utilities Board (EUB), a de facto rubber stamp for disorderly development, shuts down public participation citing "security" reasons. You never know what a disenfranchised 80-year-old citizen might say before regulators beholden to hydrocarbons.

Elected bodies no longer pull much weight in Alberta either. Three times last year the Regional Municipality of Wood Buffalo, a democratically elected body representing the hardworking citizens of Fort McMurray, presented compelling arguments for a slowdown of tar sands development in order to preserve some sense of community. The EUB, an appointed body, overruled the democrats every time with the same authoritarian élan championed by Hugo Chavez or Vladimir Putin.

Meanwhile the democratic gap between rulers and ruled grows wider every day. Polls show that Albertans overwhelming favour absolute reductions for carbon emissions, yet their government champions calculated inaction. Rural Albertans have asked for tough groundwater protection but get more oil and gas drilling in their backyards instead.

Exercising freedom of expression in Alberta can be risky too. When David Swann, the medical officer of health for the Palliser Health Authority, endorsed the Kyoto Protocol in 2002, for medical reasons no less, he got fired with a Venezuelan-like promptness. When Dr. John O'Connor, asked for a proper health study for first nations living downstream from the oil sands, Health Canada and Alberta Health, complained to the College of Physicians and Surgeons that he was "agitating the local population."

Alberta's politics mirror a global phenomenon. In a recent study of 105 oil-rich states between 1971 and 1997, political scientist Michael Ross consistently found that reliance on oil exports made a country less democratic regardless of its size, location or ideology. Oil corrupts and corrupts absolutely. Given that Canada is now ruled by Albertans and claims to be an "emerging energy superpower" as well as a "secure source of almost limitless energy resources" for North America, can Canada defy the axiom of our age?

Politicians serve those first who deliver the most revenue.

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