Oil and government

The energy industry has more influence than you

When Gil McGowan, president of the Alberta Federation of Labour (AFL), walked into a conference room in Kananaskis to observe the meeting of energy ministers from across Canada in July, he expected to find a seat in the section reserved for environmental groups, or concerned citizens groups. There was no such section. Looking around the room, bedecked in energy company sponsorship banners, McGowan realized he was the only person there who wasn’t with an oil and gas company.

He shouldn’t have been surprised. After all, when he called then energy minister Ron Liepert’s office to get a seat at the meeting, which was open to interested stakeholders, he was rebuffed.

“So I’m the president of the federation of labour, (but) the only way I got in, even as an observer, was to phone my counterpart in Newfoundland who has a good relationship with their government, which happens to be a Conservative government,” says McGowan. “And so she talked to their energy minister. So I was invited by the Newfoundland energy minister to attend the conference here in Alberta.

“To make matters even worse, when Liepert got up to give his introduction, he said ‘I’m so pleased that we’re together here with all the relevant stakeholders.’”

It’s a surreal representation of what many say is an undue influence on the government of Alberta by the energy industry. Although the government does engage stakeholders, from labour to environmental organizations and beyond, many say that the energy industry has the greater pull. Critics point to the government ignoring the findings of multi-stakeholder discussions, the sheer imbalance between the well-funded oil and gas machine and those of civil society groups, and the amount of interaction between the government and the energy industry compared to other stakeholders as a sign that the cards are stacked.

CAPP and the Act

The AFL represents 29 unions with a combined membership of 145,000 people, some of whom work in the energy industry. This isn’t an environmental organization calling for a halt to all oil and gas exploration in the province, but it is concerned about the environment and “the responsible and sustainable development of our resources,” according to McGowan.

AFL is also concerned about the influence that the industry has over government policy making. While the Canadian Association of Petroleum Producers (CAPP) lists 81 different issues they will talk to the government about in the next six months, the AFL meets with the government only a handful of times each year. And so, they filed a freedom of information request looking at the interaction between CAPP and the government of Alberta.

The documents they received showed that the government and CAPP wanted to collaborate on a joint public relations campaign around shale gas fracking and water use. The federation believes that these documents demonstrate a breach of Alberta’s lobbyist act, which sets out stringent rules for engaging the government. For one, the people working on CAPP’s behalf were not among the 41 lobbyists registered by the organization.

So, the AFL sent the documents to the lobbyist registrar and asked for an investigation. What they didn’t do was check their package of documents carefully, highlighting only the unlisted lobbyists and the fact that a briefing note seemed to indicate that it was CAPP that approached the government about the public relations campaign. It’s an important distinction. If the government approached CAPP, the act would not apply. That’s exactly what the registrar ruled on November 28.

“We sort of assumed that he would do a thorough investigation, including a search of the documents,” says McGowan. “It turns out he didn’t do that. He only interviewed a couple of people and concluded that everything was hunky-dory because they said it was hunky-dory.”

After looking more carefully at the package of documents, the AFL realized they had emails that appeared to contradict the ruling. An email dated June 8, 2011 from Doug Bowes, the director of unconventional gas in the energy department, says that CAPP approached the government to discuss its desire to “strike a committee to develop a public relations strategy focused on fracturing and water use associated with shale gas development.”

The federation has called for a new investigation, but it’s unclear if that will happen. The act forbids the registrar from commenting on the matter, even to acknowledge whether an investigation is underway.

Travis Davies, a spokesperson for CAPP, doesn’t see any need for further investigation. He also doesn’t care much for the federation’s views. “I think the AFL’s characterization of the matter is really, one, inaccurate and pretty disingenuous,” he says.

“I think it goes back to, the AFL was upset that the commissioner did find that we were in compliance, produced these documents, which I would assume were part of the body of work that the commissioner looked at. I can’t of course speak for him. If you look at the findings, clearly it falls within the parameters.”

But for McGowan, it isn’t necessarily about registered lobbyists and who approached who. “This is about a broader concern about the proper relationship between government and industry. We feel very strongly that there needs to be a line between government and industry, even industries that are very important to the provincial economy.

“We’re afraid that that line has not always been observed. This is one of those examples where we feel the line has clearly been crossed.”

Meanwhile in the ivory tower

In a recent paper published in the Canadian Journal of Political Science, George Hoberg and Jeffrey Phillips make a similar argument. Their analysis of the Alberta government’s engagement with stakeholders in the oilsands concludes that despite an opening up of the conversation, it’s still mostly a back-and-forth between the two dominant players — the energy industry and government — when it comes to policy decisions.

The paper looks at several events, including the Radke report. Released in 2007, the report’s mandate was to look at the challenges of rapid expansion in the oilsands and to provide a short-term action plan. The first and most prominent recommendation is investing in infrastructure to support continued growth. Environmental recommendations are sparse and vague.

Another area of concern for the authors is the Cumulative Environmental Management Association (CEMA), a standing body that produces research into the cumulative effects of the oilsands region and makes recommendations to government. Hoberg and Phillips argue that it is ineffectual.

In one major example, the Sustainable Ecosystems Working Group within CEMA called for a partial moratorium on new oilsands leases until it could complete its work. The group was worried about the effects of rapid expansion. The government refused. When the group did produce its report, it called for 20 to 40 per cent of the region to be protected and for intensive developments to be carried out in only five to 14 per cent of the area.

The report did not receive consensus among CEMA members, which includes oilsands companies, and the government didn’t implement it. Instead, the government started its new Land Use Framework deliberations. This led to the Pembina Institute and two other environmental groups walking away from CEMA.

Hoberg, a professor at the University of British Columbia who specializes in environmental politics, says by phone that Alberta is “an example of a jurisdiction that is heavily dependent on one particular industry, and in circumstances like that, it’s not uncommon to have an extremely close power relationship between that industry and the government.”

That relationship is almost inevitable, given oil and gas’s heft in our economy. And it’s something the government feels is appropriate. “Across government, ministries work with stakeholders. It’s not only not uncommon, it’s necessary. The oil and gas industry drives this economy, it’s responsible for one in seven jobs in this province and it would seem absurd to not meet with the organization that represents that industry,” says Bart Johnson, a spokesperson for Alberta Energy. “We share common interests. They certainly have some interests in policy development with the government.”

Hoberg’s paper examines the introduction of multi-stakeholder discussions meant to address the rising tide of criticism of Alberta’s oilsands and to stem the perception that the energy industry dominates the conversation. While those processes allow for more voices to be heard, the authors looked at the policy outcomes of those deliberations and recommendations and found that industry tends to get its way.

“The history of multi-stakeholder discussions on oilsands in Alberta is one of talk and drill,” says Hoberg.

Talking points

It’s a sentiment that many environmental organizations agree with. While many have participated in multi-stakeholder processes, there are also many who have pulled away. The reasons extend from the mundane concerns of operating budgets and the drain on resources that comes with participation, to the composition of the groups, to anger at the end product.

“Whether it’s citizens or industry or public interest organizations, all of them ask prior to joining whether this is the best use of our time, and is it better to be at the table, or not at the table?” says Joe Obad, associate director of Water Matters. “And those are tough decisions to make.”

When Water Matters was called Bow Riverkeeper, the organization was involved in the Alberta Water Council, a multi-stakeholder process designed to address concerns over industry’s affect on watersheds and wetlands in the province. It pulled out of the process.

“We felt it restricted our ability to speak out, so we left the Alberta Water Council because we felt we’re going to speak out about this and we’re going to speak very clearly and not use the process as the means to speak about the things we support,” says Obad.

“That was a difficult decision to make, but it was based on the idea that every group should be allowed to champion its objectives by whatever means it sees fit.”

The Alberta Water Council is a process that comes up again and again when speaking to environmental groups about the concerns they have over industry influence. Chief among their complaints is the decision by the government to scrap a no-net-loss wetlands policy that would force industry to protect watersheds, or to replace ones that they destroy.

After three years of discussion and study, of the 25 organizations represented on the council, 23 supported the measure and, according to the Pembina Institute, 90 per cent of Albertans who were polled supported the idea. The only two non-consensus votes were CAPP and the Alberta Chamber of Resources (ACR), which sent dissenting letters to the government.

ACR boasted on its website at the end of 2008 that it had effectively lobbied the government not to follow through on the recommendation.

In an abridged version of a speech posted on the site, given by the executive director of ACR, Brad Anderson, he says: “One of the most influential things ACR was able to accomplish in 2008 was to do a really good job explaining where industry’s line in the sand is when it comes to critical issues. A prime example of this was the position the Chamber took on the proposed Provincial Wetlands Policy.”

It says that it successfully lobbied the government to accept three of the four changes it requested in its dissenting letter, including scrapping no-net-loss. This was posted on the ACR website before the government made its announcement.

When the Canadian Press reported on the claim and the anger of those who participated in the Water Council discussions, the report was removed from ACR’s website. A copy of the website post was saved and given to Fast Forward Weekly.

Mike Hudema, a tarsands campaigner with Greenpeace, says the organization has not participated in any multi-stakeholder processes since setting up shop in the province in 2007. “The story that we heard was the same, that it was a lot of time and resources spent and at the end of the day what came out was not reflective of the conversation that many of the groups had,” he says.

Regulations

Of course, no conversation about oil and gas in Alberta can ignore the regulations set in place to protect our environment and ensure that companies are following the rules. There seems to be no middle ground when people discuss the Energy Resources and Conservation Board (ERCB), the arm’s-length government body responsible for approving or denying oil and gas projects. It’s either a pawn of the industry, or a world-class regulator, or an overbearing obstacle. You either love it, or you hate it.

For many critics, you simply have to look at the overwhelming number of approved applications and the relatively few denials: in 2011, the ERCB approved 79 applications while denying seven.

“It’s an overly simplistic view,” says Darin Barter, a spokesperson for the ERCB. “What you’re not seeing is the requirements that companies are bound to prior to even applying to the ERCB.”

Barter argues that companies have jumped through so many regulatory hoops by the time they go before the ERCB that approval is virtually guaranteed. “Companies can take months to years to put together an application for a project,” he says.

“The transparent part is seeing the approvals or denials, the less transparent part is seeing the regulatory framework.”

And there’s no doubt that the regulatory framework is intimidating. To the layman, it’s a Byzantine and dense set of rules that requires an in-depth knowledge to navigate, But critics maintain that it doesn’t go far enough. The wetlands policy debacle is one instance.

In the case of the oilsands, where no project has been denied, Pembina points to an agreement by Royal Dutch Shell to reduce its emissions to the tune of 900,000 tonnes in order to gain approval of its Jackpine Mine and Muskeg River Mine Expansion projects. The promise convinced Pembina to remove its objection to the project. Shell then reneged on that promise.

In a 2009 release, Pembina’s Simon Dyer wrote: “In approving Shell’s projects, the joint review panel struck by the Alberta Energy Resources Conservation Board (ERCB) and the Government of Canada explicitly noted that they would review Shell’s approval in the event that the company failed to fulfil commitments that had been presented as evidence.”

Pembina and EcoJustice petitioned for a review. That review did not happen.

The future

In Hoberg’s paper, the hopeful component of his less-than-rosy conclusion is that by opening the door to groups outside the traditional power structure, the government has given them credibility and will have to take their concerns seriously.

“And I do think the government and the industry, it took them a while, but now they have to acknowledge the significance of the environmental impacts of the oilsands and of environmental interest groups,” says Hoberg.

In the conclusion to his paper, he argues that it’s the government that must now save face. “In the oilsands case, the government of Alberta has formally acknowledged the legitimacy of environmental critics by giving them a formal voice in the consultation processes,” he writes. “Now that environmentalists have denounced those processes and withdrawn, the government’s own strategy has lost its legitimacy.”

No one interviewed for this article tried to argue that the government did not address a broad range of stakeholders. “I would say, in general, governments try to meet with all stakeholders,” says Obad. “They don’t tend to leave anyone out altogether. But it does seem that there’s a degree of difference in terms of frequency and accessibility.”
With vast financial resources, teams of lobbyists, ready access to decision-makers and a proven track record of being able to influence policy decisions despite being in a minority on stakeholder decisions, the oil industry has proven it has pull. On the opposite side, many groups are skeptical of engaging in discussions that seem to accomplish little more than depleting their sparse resources.

“The government has a responsibility to look after the public interest first and in cases where the public interest conflicts with the narrow interests of the energy industry, then the government has to fall on the side of the public interest, but I’m not sure that happens enough in Alberta, or even at all,” says McGowan.

“I’m certainly not suggesting that the labour movement or any other groups in civil society should be calling all the shots for government; what I am suggesting is that neither should industry.”

 

 



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