Repost from The Missoulian
[Editor: Pay attention to Alberta! Changes there will send ripples all along the rails in the U.S., from the Upper Midwest to the East Coast, West Coast and Gulf Coast. Congratulations to Rachel Notley and the New Democratic Party! – RS]
Alberta election could send tremors through Montana economyBy Rob Chaney, May 09, 2015 5:30 pm
Montana’s political seismograph didn’t rattle much last Tuesday when its neighbor to the north underwent a governmental earthquake.
But that could change in the coming weeks, as the citizens of Alberta absorb the magnitude of their replacement of Canada’s longest-standing political party rulers with a left-wing opposition pledged to look hard at its energy economy.
“The Progressive Conservative Party has been in power two years longer than I’ve been alive,” said University of Montana biology professor Mark Hebblewhite, a 42-year-old Alberta native. “I think this is a real response to the ongoing mismanagement of Alberta’s bounty. One thing that hit the nail on the head was how the province went from being overrun with money to crashing in another bust. People get really tired of it.”
The New Democratic Party took 53 seats in the Alberta Parliament in Tuesday’s election. Another traditional minority group, the Wildrose Party, surprisingly found itself in second place with 21 seats. The Progressive Conservatives held onto just 10 seats.
NDP party leader Rachel Notley was credited for a remarkable political ground game that unseated Progressive Conservative Party leader Jim Prentice – a man widely considered a future leader of all Canada. Prentice resigned from his post on election night and said he was at least temporarily leaving politics.
Alberta’s entire United States border runs along Montana, from the western edge of Waterton-Glacier International Peace Park to the 110th Meridian north of Havre. The province and state share the spine of the Rocky Mountains and the beginnings of the great mid-continental prairies.
They also share a relatively recent surge in energy development. Over the past decade while Montana has exploited its Bakken oil and gas fields along the border with North Dakota, Alberta has been opening massive production in tar sands petroleum near Fort McMurray.
Oil from the tar sands has become both a political and social controversy.
New Democratic Party officials have questioned the need for the Keystone XL pipeline that would run south from Alberta, through a corner of Montana and down to refineries in Oklahoma and Texas. The Obama administration has stalled permitting of the international border crossing, while Montana’s bipartisan congressional delegation has supported it.
“If the Keystone XL doesn’t happen, the amount of rail traffic leaving Alberta would be impacted significantly from that decision,” said Bentek Energy senior analyst Jenna Delaney. “Currently, taking the Keystone XL out would increase petroleum unit trains by five a day out of Alberta. And Transport Canada officials say residents in Canada are very concerned with rail traveling through their communities.”
Moving petroleum by rail has become an issue in both Canada and the United States, signposted most recently by last week’s explosion of a group of oil tank cars near Heimdal, North Dakota.
Caryn Miske of the Flathead Basin Commission said the prospect of moving more oil trains along the southern border of Glacier National Park is under close scrutiny.
“We’re already seeing impacts from the amount of oil that’s moving around,” Miske said. “The number of trains and cars carrying oil has increased, and that’s really concerning, considering how many near-misses we’ve had.”
Burlington Northern Santa Fe has a freight line that runs out of Alberta into Montana at Sweet Grass, although there’s not much cross-border oil traffic there yet.
Delaney said another factor of the government change could be the NDP’s campaign pledge to revamp the province’s tax structure on energy development.
“They’re looking at increasing income taxes and royalty rates to corporations, which the oil companies aren’t happy about,” Delaney said. “The last time I was in Calgary, the atmosphere was already a little bleak. If taxes are raised on corporations, I don’t know how they might respond. Companies with offices in other places might shift people away from Calgary.”
Much of the province’s energy economy has extremely expensive initial start-up costs. Energy analysts have already been forecasting a drop in Albertan oil production as new projects slip below their break-even points with falling oil prices.
Delaney said that could have an impact on Montana’s economy, as the demand for megaloads of oil field equipment transported across the state stalls.
Longtime conservation activist Stephen Legault said the provincial government’s failure to manage its oil wealth led to great voter frustration.
“We’re drilling 20,000 wells a year in Alberta, and we’re $7 billion in the hole economically,” Legault said. “That’s largely because when oil goes below $75 a barrel, provincial coffers take a massive hit.”
The result has been a government unable to fix damage from the floods that ravaged Calgary in 2013, or even to send land management officials to cross-border conferences in Montana.
While the new government has majority control of Alberta’s Parliament, its influence over the provincial agencies could be a murkier matter. Those departments have had decades of one-party control appointing their directors and staffs.
“If I was south of the border looking north, I wouldn’t expect to see anything dramatic right away,” Legault said. “We’ve had five changes of government since 1905. The bureaucracy is so deeply entrenched after 45 years of one-party rule, it’s going to take years for a new government to put in place the people it wants to create change.”