Ralph Klein’s legacy is inextricably linked to his government’s role in encouraging the province’s energy industry – particularly his role in presiding over the province as development in northern Alberta’s oil sands flourished.
The first year Mr. Klein was in office, bitumen producers began moving from an old bucketwheels and draglines system to the more agile truck and shovel method. In 2001, the first steam-assisted gravity drainage (SAGD) projects were up and running. During his final years in office, oil sands production hit one million barrels per day.
Critics that even included even former premier Peter Lougheed questioned the pace of energy development under Mr. Klein’s reign. Environmentalists said almost every oilsands project was given a stamp of approval by government regulators without any consideration for the cumulative effects to the land, air and water or greenhouse gas emissions.
But his political allies say perhaps his strength lay in the fact that oil companies and international investors knew they had stability in Alberta, because Mr. Klein wasn’t going to make any out-of-the-blue changes to crude royalty rates or regulations.
“I truly believe that Ralph didn’t do anything special for the oil and gas industry,” said Murray Smith, who served as Alberta’s energy minister between 2001 and 2004.
“Every move that he had had a benefit for everybody. He was loath to single anything out,” said Mr. Smith, who was wearing his three-prong fork – or Friends of Ralph Klein – pin following Mr. Klein’s death on Friday.
Perhaps most importantly, Mr. Klein worked with Ottawa in the mid-1990s – a time of high unemployment and weak economic growth – to make oil sands development more viable. Under the auspices of the National Oil Sands Task Force, the Chrétien government introduced a tax write-off for capital investment. The Alberta government under Mr. Klein enacted a generic oil sands royalty regime that saw all companies pay a nominal royalty of one per cent until developers recovered all project costs.
Taken together with increases in crude prices that began around the year 2000, the changes kick-started the massive ramp-up of oil sands production and helped make it the multi-billion dollar industry it is today.
“The pace of development in the oil sands has exceeded everybody’s expectations,” said former federal natural resources minister Anne McLellan, who is also widely credited with creating a climate to spur development in Alberta’s north.
Speaking on Friday, she said most Canadians had never even heard of the oil sands or tar sands in the 1990s. Oil prices at the time were low, and the costs of extracting bitumen were high. It wasn’t clear then that the oil sands had a future.
But even though the Klein government and the Liberal government in Ottawa often didn’t see eye-to-eye on other issues, Ms. McLellan said both governments were willing to take a chance on the future of the Alberta resource.
“We got along because he was a guy who was outcome-driven, and you see that with the oil sands,” Ms. McLellan said of Mr. Klein.
Former Syncrude Canada Ltd. chief executive Eric Newell, who became the industry spokesman in the push to spur the oil sands, said many people didn't give Mr. Klein credit for his sharp mind. He was quick to understand a complex situation, make a decision and move forward. "He really got it," Mr. Newell said.
Mr. Klein had a different philosophy than Mr. Lougheed, who believed in a more interventionist role for government, he added. Mr. Klein's faith, on the other hand, lay in the private sector.
"I just hope people give Ralph his due," Mr. Newell said.Report Typo/Error