With 88 per cent of the electorate saying they don't think royalties are high enough the direction in which Stelmach will go should not be too surprising. He will go quite a ways towards the 20 per cent with perhaps some grandfathering to exclude some producers of natural gas. Stelmach was not the oil people's choice for leader. As with Dione his choice just shows that conventions don't always work as they "should". He might as well be part populist but not radical enough to be dumped by oil and party finances jeopardized. I predict that he won't call for Alberta ownership of the oil patch!

All eyes turn to tight-lipped premier
Much at stake as powerful oil industry squares off against voting public

Archie McLean
The Edmonton Journal


Sunday, October 21, 2007


EDMONTON - On one side is the man holding the black homemade sign at Wednesday's oil workers rally.

"IF I LOSE MY JOB I WON'T VOTE FOR ED."

On the other is a recent Edmonton Journal and Calgary Herald poll suggesting 88 per cent of Albertans don't believe the government collects its "fair share" from oil and gas royalties.

Premier Ed Stelmach will talk to the province Wednesday night in a televised address.

He has heard from the royalty review panel, which suggested raising royalty rates by about 20 per cent, heard from the oil companies and heard from Albertans.

Now he has a decision to make.

What's at stake? For starters, about one-third of the province's annual revenue and perhaps its future prosperity.

If that's not enough, it has the potential to reshape the province's political landscape.

Stelmach is the new leader of an old party.

Despite seeing his poll numbers fall over his first few months in office, Albertans haven't yet formed strong opinions of him. For a leader lacking a strong identity, this issue -- which has dominated editorial pages and call-in shows for more than a month -- may come to define him. He may even call an election on it.

"It's a watershed, politically," former Premier Peter Lougheed said Friday.

Stelmach has lived up to his reputation for listening to all sides and points of view before making up his mind.

Tory MLAs say he has been so guarded with the royalty decision that they have no idea what he'll do. After each MLA told him in caucus last week what constituents are saying, Stelmach simply told them to be patient.

He was dismissive when asked if it's the most important decision of this career.

"Everybody says it's going to [be], but once we're passed this, I'm sure there will be something else coming forward."

Stelmach has offered sparse clues as to what he will do, saying only that "the status quo is not an option."

Alberta Liberal Leader Kevin Taft says Stelmach has created a political mess for himself. If he adopts the Hunter report -- named after panel leader Bill Hunter -- he angers the oilpatch. If he attempts a compromise, he risks solidifying a reputation that he can't make tough decisions.

"No matter what he does, there are going to be people unhappy," Taft says.

The Liberals face their own political problems surrounding the report. They need at least a cordial relationship with the oilpatch if they ever hope to form government.

Taft has kept a low profile the past few weeks, preferring to watch the rhetorical battles from the sideline. He agreed broadly with the Hunter report's recommendations, but has not worked out an exact position. His caucus is meeting with Hunter and other panel members on Monday and will begin rolling out a response this week.

NDP Leader Brian Mason has taken to criticizing the Liberals as much as the Conservatives. He believes the report's recommendations are the minimum the government can do.

"What's at stake in this decision is the future of the province of Alberta and the kind of life that the next generation and the generation after that are going to have," he said. Mason will outline his views today at a town hall meeting at 2 p.m. at Alex Taylor School.

Mason has been running an election campaign since early September, believing the government will likely go to the polls this fall.

Whenever the vote takes place, it's difficult to imagine the Conservatives losing rural seats. Still, oil companies have threatened to yank investment from the province and rural job losses may be the one thing that could do it.

Doug Griffiths, the MLA for Battle River-Wainwright, said those jobs need to be protected. "We have to be incredibly careful about this. Because if it does cost jobs, I don't care how much money comes in. Two billion dollars is not worth 10,000 jobs or 20,000 jobs."

Not including form letters, Griffiths said only three people have contacted him to say the government should fully adopt the report, while more than 100 have said the government should be careful not to harm the economy.

Dwight Logan, Grande Prairie's new mayor, said the political divisions in his town are particularly stark.

With local MLA Gord Graydon set to retire, Logan said the new nominee will have a tough time navigating those divisions.

Don't harm the economy. Stand up to oil companies. Get a fair share. Whatever Stelmach does, he will have to convince Albertans that his royalty plan does all three. For a premier whose communication skills are not his strongest trait, it will be a difficult challenge.

If there's one Albertan who knows what Stelmach is going through, it is Lougheed, who was at the helm in 1972, when the province raised royalty rates.

"It's a very high-pressure position that he's involved in," Lougheed said.

"The public is very focused on it. My thoughts go out to him."

With files from Jason Markusoff and Darcy Henton

amclean@thejournal.canwest.com

- - -

WHERE THEY STAND

Liberals

- Raise royalties by about 20 per cent, as outlined in Hunter report.

- Haven't endorsed report; will meet with panel members monday.

NDP

- Hunter report doesn't go far enough. Raise royalties by even more if oil goes over $120 a barrel.

Alberta Alliance

- Don't raise royalties. Report would "destroy Alberta" by crippling industry.

The other guys

- Alberta Green Party -- says the Hunter report is a step in the right direction, but wants royalties based on the environmental costs.

- Wild Rose Party -- not yet a party, it is split on report.

© The Edmonton Journal 2007