Relax. Alberta’s NDP isn’t the energy deal killer – the market is

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My dear friends in the wild rose province: Deep breaths.

Instead of offering Alberta's premier-designate time to absorb her party's shocking majority win, some provincial big wigs – including energy executives, who should know better – have pounced on Rachel Notley, suggesting her victory will spell the end of Canadian energy. The morning after the New Democrats won the election, there were already suggestions the incoming leader must reassure the public that she won't nationalize the oil and gas industry.

I'm assuming most Albertans aren't in such a panic – the NDP wouldn't have won in a landslide otherwise. But there seems to be an underlying fear that the provincial NDP government and its pending royalty review will demolish any hopes of developing energy assets – and by extension, will destroy future deal flow.

What a knee-jerk reaction. Across the country, the NDP may not be cozy with producers of energy from conventional sources, but political parties almost always move to the centre once they are elected. And their reputation for killing deals can just as easily be slapped on their rivals. On this front, let's not forget that Conservative governments are no pushovers, either.

Saskatchewan Premier Brad Wall is practically a poster boy for fiscal conservatives, but earlier this year he pledged to review his province's potash royalty and taxation regime. This, of course, comes after he all but begged the Prime Minister to kill the proposed takeover of Potash Corp. of Saskatchewan in 2010. Deal killer, I'd say.

As for Mr. Harper, his former boy wonder Nigel Wright made a name for himself at buyout firm Onex Corp. – yet Mr. Wright was also the point man on the team that crafted the federal plan to ring-fence the oil sands from state-backed foreign buyers. That policy iced energy deals for an entire year – and arguably still does.

Also remember: The current freeze on deal making has nothing to do with the NDP. Even before the Alberta election, energy bankers and chief executives en masse stressed that it was way too tough to do deals in this volatile market. Sure, Royal Dutch Shell and BG Group merged in a blockbuster combination – but other CEOs of energy majors, such as Chevron, said most deals just don't make sense in this scary new low-oil-price world.

The NDP needs to tread carefully, that's for sure. The energy market is in shambles – after climbing back to nearly $60 (U.S.) a barrel, the price of West Texas intermediate crude oil is still down 36 per cent from this time last year – and investor confidence is on shaky ground. North America also has what was unthinkable not long ago: virtually unlimited supply of oil and gas for the next 20 years, because improvements in extraction technology have made shale energy easily accessible.

But let's at least allow the new leader to find her footing before piling on. To date, the public messages have been far too patronizing. Canadian Natural Resources president Steve Laut is so concerned, he offered Ms. Notley a short lesson on the basics of energy markets when his company reported its quarterly results last week.

Never mind that Canadian Natural posted its first loss in four years and the biggest Canadian energy names continue to produce record levels of crude, even though North America is awash in energy. Makes me wonder who really needs the lesson on market fundamentals.

Some of the federal NDP's energy policies make me shudder, but I'm willing to acknowledge no one yet knows what the Alberta party will do. University of Alberta energy policy professor Andrew Leach dug through the NDP's energy platform leading up to the vote and didn't find anything all that jarring. All we know is that the party has vague plans to assess the province's refining power, become a leader on greenhouse gas reduction, call for a commission on royalties and save more money made from energy. (The NDP also campaigned on a 2-per-cent corporate tax rise – which applies to all industries.)

On the saving front, I'd say it's about time. In January, I went to Trinidad and Tobago to do a story on Canadian banks in the Caribbean, and the locals were terrified about the effect of plummeting energy prices on their economy. Even though the country is a major exporter of liquefied natural gas, business leaders there decry their government's having saved just $5-billion (U.S.) for a rainy day.

I would have loved to boast that a sophisticated country such as Canada would never be so short-sighted, but I could only hang my head in shame when admitting Alberta's kitty was worth only $17-billion at the end of 2014. That's for a provincial economy roughly 13 times the size of Trinidad and Tobago's.

I know it's easy to point fingers. Ontarians such as myself probably shouldn't. We're the ones with a $10.9-billion budget deficit.

But then, neither can those who supported Alberta's Progressive Conservatives – many of whose biggest supporters are in the energy industry. The provincial PCs ran budget deficits year-after-year during an energy bull run and that's what got Alberta into this fiscal mess. Their party is in the penalty box for a reason. At least give the newcomer a chance.