CALGARY — Just ahead of the release of a report that could spur changes to Alberta’s contentious royalty framework, the province’s new energy minister says he knows he’s going to have to work to woo back support from Calgary’s oilpatch elite.
Ron Liepert admitted Thursday that relations are strained between the Tory government and the oilpatch.
“There has been a loss of trust, I certainly have made no bones about it,” he said. “... I’m not going to deny that there isn’t lashing out going on out there.”
Premier Ed Stelmach shuffled his cabinet Wednesday in the face of his party’s sagging popularity in the polls, especially in Calgary. Liepert was shifted into Energy from Health, where he had a controversial run over cutting mental health beds and other services.
Thursday, the premier reached out to the energy industry, saying he expects Liepert to set up an office in Calgary as well as wine and dine oilpatch CEOS at the exclusive Petroleum and Ranchmen’s clubs.
“This is an industry that will help carry Alberta out of the recession,” he said.
Liepert promised to immediately set to work evaluating the province’s competitiveness review, expected to be handed over to cabinet in a few weeks.
The review examines how provincial regulations and legislation affect energy investment.
It will likely lead to “subsequent changes to both policy and legislation,” said Liepert.
He wouldn’t say if the royalty regime will get an overhaul before he sees the recommendations.
Many industry players seemed optimistic about the possibility of a change.
Gary Leach, head of the Small Explorers and Producers Association of Canada, said he’s hopeful that changes to the royalty framework and other regulatory issues can be worked out.
“Because he’s elected here in Calgary, I know he’s got constituents who work in the oilpatch, so I think he’s got a lot of opportunities to take the pulse of the industry on a regular basis,” he said.
“We’re looking forward to working with him.”
Political scientist Keith Brownsey said the government seems to be taking the right steps to smooth things over.
“Liepert is a local boy, he’s well known by many in the energy sector,” he said.
The competitiveness review, originally due in the fall, was likely pushed back in part to allow Liepert to both usher it in and use it as justification for any royalty changes, he said.
Brownsey said he was surprised at Stelmach’s choice of words when inviting the oilpatch to come and play ball.
“All the conspiracy theorists who come out and say, ’look, the province is run by a few CEOs downtown’, it just bears them out. You have to belong to the Petroleum Club to have any political impact.”
Stelmach and Liepert both admit the government made some mistakes when it made changes to the province’s energy royalty framework.
“There’s always been some concern about the foundation, if you might, the data that some of the decisions were made on,” Liepert said.
“We’ve got an opportunity here to move forward and I am very confident that everything I’ve heard both from our folks and from industry is that we are headed in the right direction.”
The upstart Wildrose Alliance party has been picking up support in Calgary as discontent mounted over the handing of the royalty regime.
Paul Hinman was elected over a Tory favourite in the city and earlier this month, two Calgary MLAs elected as Progressive Conservatives — Rob Anderson and Heather Forsyth — defected to Wildrose.
Anderson said Thursday the damage was already done by the royalty regime and that people in Calgary won’t be too quick to forgive.
He also questioned what he sees as the government’s new line.
“Even though (Liepert) and the premier were being told by other Calgary MLAs that the royalties were a huge mistake and a huge policy debacle and that they needed to be significantly altered, I don’t remember the minister ever sticking up for the energy patch,” he said.
“So this is quite a conversion story, that’s for sure.”
Stelmach said the competitiveness report’s release was pushed back because so many industry leaders wanted to get involved.
“I met with a number of industry officials today and they spoke quite positively, very positively, of the advances we’ve made.”