When Peter Lougheed speaks, Albertans should pay close attention.
He was the greatest premier most living Albertans will ever know and he’s still sharp and plugged in.
When he tells Albertans — and especially Progressive Conservative politicians — not to carelessly ship our valuable resources down the pipeline, we should pay close attention.
Lougheed’s refusal to do just that helped make Alberta what it is today: not just a price-taking petro-state, but one that enhances the value of its natural resources.
No part of Alberta has benefited more from Lougheed’s wisdom than Red Deer.
Two world-scale petrochemical plants east of the city; hundreds of high-paying direct and indirect jobs; highly educated and energetic people they attracted to our community would not have happened without Lougheed’s commitment to making Albertans more than hewers of wood and drawers of petroleum.
Alberta under Lougheed (1971-85) had, and still has, invaluable natural-gas resources.
Most natural gas is methane, the simplest hydrocarbon, consisting of one carbon atom, surrounded by four hydrogen atoms.
Natural gas also contains ethane, consisting of two carbon atoms, surrounded by six carbon atoms.
Under the right temperature and pressure conditions, ethane can be split and recombined into longer and longer carbon chains, which form the basis for most of the chemicals (like polyethylene) that are ubiquitous in modern plastics and packaging.
Before Lougheed took charge in Alberta, ethane was an afterthought. The only extra value it accrued was for the heat it generated when burned.
Ethane was shipped out of province and down the pipelines to places where smarter people captured its value-added potential.
Lougheed said that had to stop. He insisted that stripping plants be created to take ethane out of the natural gas stream before it left the province.
Before long, ethane was flowing in pipelines to Joffre, Prentiss and new petrochemical plants near Fort Saskatchewan.
Brand new, multimillion-dollar, value-added enterprises were created here instead of being recklessly shipped away, along with all the high-paying jobs they generated.
It’s worth remembering that the biggest player on the local petrochemical scene was named Nova, An Alberta Company.
Nova has gone through many changes, including bankruptcy.
Its headquarters moved to Pittsburgh, Pa., years ago, but it remains a world-class enterprise today and the benefits of Lougheed’s wisdom endure here.
Today, Lougheed is 83 years old, but remains sharp, energetic and committed to the future of Albertans.
When he says we should insist on upgrading heavy oil before shipping it out of the province, Albertans should pay him heed.
None should pay closer attention than Progressive Conservatives who are seeking to succeed him as Alberta’s 14th premier today.
Lougheed was unafraid to take on the petroleum giants, in ethane policy and by dramatically increasing the royalties paid to Albertans for resources we own.
Successive premiers fell short of Lougheed’s mark in overseeing oilsands development. In fact, Albertans bankrolled early expansion of heavy oil by charging only a one per cent royalty on oil extracted from the tarsands until all their construction costs were recovered.
With Albertans paying the shot, massive construction cost overruns were almost inevitable.
When Premier Ed Stelmach implemented a long-promised and overdue royalty change, the oil industry went ballistic.
It pulled support from the Progressive Conservative Party and poured it into the upstart Wildrose Alliance.
After that, Stelmach announced a five-year petroleum royalty break and Alberta Tories have been running scared ever since.
They have to grow some metaphorical stones under a new leader (likely Gary Mar), who will be selected today.
Alberta needs the oil industry. But the oil industry unquestionably needs Alberta.
According to the Parkland Institute, a non-partisan think tank at the University of Alberta, our province owns 50 to 60 per cent of the “investable oil” in the world.
“The other half,” the institute reported in 2007 “is in jurisdictions with a high risk politically or high exploration costs. In this context, Alberta can afford to be in the higher range for royalties while still remaining very competitive in terms of attracting investment.”
Despite advances in alternative energy sources, oil will remain the world’s dominant fuel for years to come. Nothing else comes close to it in portability and energy intensity.
As the closest neighbour and best ally of the world’s largest energy user, Canada — especially Alberta — will be an important supplier to the United States for generations to come.
We are also close enough to China to be a dominant long-term supplier to the world’s fastest-growing energy market.
Plans are in the works to build an oil pipeline to a new tanker port on British Columbia’s coastline.
That will be even more challenging — environmentally, logistically and politically — to plan, finance and build than the Keystone XL pipeline, from Alberta to the Texas gulf coast, which is well on its way to political approval in the United States.
The biggest challenge for Alberta will be ensuring that we don’t also ship high-skill, long-term employment with the bitumen.
Alberta’s next premier must have the courage and conviction of Lougheed to ensure some upgrading takes place here before billions of barrels of bitumen and thousands of jobs are exported forever down the pipeline.
Joe McLaughlin is the retired former managing editor of the Red Deer Advocate.