Last week Albertans received the fruits of the Kenney Government’s inquiry into foreign-funded “anti-Alberta” activities targeting the oil and gas industry. The $3.5 million report, a year late and a million dollars over budget, found no evidence of illegal activities or wrongdoing on the part of any individual or organization targeted by the Inquiry.
When Premier Kenney launched this inquiry and his $30 million “war room”, he claimed there was a campaign of “lies and disinformation” conducted by “foreign-funded radicals” that was limiting the expansion of Alberta’s oil and gas industry, costing jobs and resulting in growth in oil demand being met by suppliers with low environmental standards.
The inquiry has been plagued with controversy and criticized for its failure to reveal any new information not already in the public domain. Premier Kenney was notably absent when the inquiry’s final report was released. Instead, Energy Minister Sonya Savage was left to spin the report as a victory in a bizarre press conference, where she quickly pivoted away from the report’s conclusions and focused on what she thought the majority of Albertan workers might feel.
The press conference revealed the true intent behind the ill-conceived inquiry: to redirect and focus the understandable anger, fear and frustration of oil patch workers and other Albertans towards environmental groups and away from the Alberta government’s mismanagement of the province’s most valuable non-renewable resource.
According to statistics from the Alberta government and the Canada Energy Regulator, Alberta’s output of oil and gas was at an all time high in 2019 when Premier Kenney launched the inquiry and the war room. Production of oil and gas in Alberta has grown 42 per cent since 2000 and production of upgraded oil sands has more than tripled and production of non-upgraded oil sands has increased more than six-fold.
However, despite the growth in overall oil and gas production since 2000, non-renewable resource revenue had declined 44 per cent by 2019, and government revenue per barrel of oil equivalent produced was down 60 per cent. Since 2005, when non-renewable resource revenue peaked, total revenue has declined by 59 per cent and revenue per barrel of oil equivalent produced is down 70 per cent. Albertans are selling more oil and gas and getting less for it.
What about jobs? With production at an all time high, direct employment in the oil and gas industry in Alberta has declined by 20 per cent as of 2019 since peaking in 2014. The average productivity of an oil and gas employee (measured by oil and gas production) has increased by 50 per cent in the industry overall since 2011, by 70 per cent in the oil sands and by 37 per cent in conventional oil and gas. This is a result of further automation and efficiencies implemented by companies which reduced the number of employees needed, not conspiracies by “foreign-funded radicals” imagined by the Alberta government. In other words, those jobs are not coming back.
Although spending $3.5 million on this inquiry and $30 million per year on the war room may seem like an excessive waste of money, it is dwarfed by the $1.3 billion of taxpayers’ money the Kenney Government lost supporting the Keystone XL pipeline which was cancelled by President Biden.
The upcoming COP26 conference in Scotland will address the crisis of global warming. There is no easy fix, but it is certain that winding down production and use of fossil fuels as quickly as possible will be a crucial part of any solution. The Alberta government, along with many others, will have some very difficult choices to make to have any hope of limiting climate change. Given these urgent issues, it is hard to imagine a more useless waste of time and money than the Kenney Government’s search for boogie men to blame for Alberta’s fiscal problems represented by the Allan inquiry.
Albertans deserve much better.
Author: David Hughes
J. David Hughes is an earth scientist who has studied the energy resources of Canada and the US for more than four decades, including 32 years with the Geological Survey of Canada (GSC) as a scientist and research manager.