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The Second Coming of Peter Lougheed Add to ...

Lougheed seems ready to dispute the American interpretation of the clause; that is a fight that would involve the federal government as well as Alberta. To the simple question of whether Alberta can resist the American pressure for guaranteed oil, he has a simple answer: "Sure. We own it. We're in a seller's market."

Within a few months of that private barbecue, Lougheed decided to become a public man again. At first, he sounded off about water, warning Canadians that the stuff is too precious to waste or even to sell. Specifically, he said, Canadians will have to protect their water from a thirsty neighbour. The United States, he said, "will be coming after our fresh water aggressively within three to five years. We must prepare, to ensure we aren't trapped in an ill-advised response. It would be a major mistake for Canada to handle this issue badly. With climate change and growing needs, Canadians will need all the fresh water we can conserve, particularly in the western provinces."

That warning was delivered in November, 2005, which means that, by Lougheed's reckoning, the U.S. will come after our water any day now.

"They are coming. And they are coming in a very strong way," he says. "How strong a charge? When it comes to water, people become emotional. It will be very strong. Maybe I am wrong, but it could be a proposal that includes threats of retaliation to our country.

"I hope that when the time comes, Canada will be ready. The reality is that fresh water is more valuable than crude oil."

Wait a minute. Is that Maude Barlow talking? Lougheed's assertion seems almost a heresy in the province that, beginning under the selfsame Peter Lougheed, has built its present and future prosperity on roughnecking, not tree hugging.

But memories are short. The long, laissez-faire rule of Ralph Klein has obscured the Lougheed record: Lougheed led a version of the Conservative party that embraced state planning of the economy. Indeed, the oil sands were seeded by the Lougheed government's 50% investment in the Syncrude project. It is no accident that Lougheed started speaking up as the Klein era appeared to be coming to an end. He went public with his concerns, he says, "because I felt and still feel strongly that the public policy of Alberta is wrong, and that they're trying to do too much, too quickly," he says.

Ever polite, Lougheed tries not to blame Ralph Klein for everything that he sees amiss in Alberta. But ask him indirectly--via a question about Klein's successor, Ed Stelmach, and his government--and his unedited feelings come out: "They really inherited a lot of messes," he says bluntly.

Lougheed's key recommendation is that Alberta should put the brakes on oil sands development. "We should have more orderly development," he says. "That means, do one plant, finish it and build another plant, finish it, do another plant--instead of having four of them go on at the same time."

As well, Lougheed has said it was unwise to use the province's deposits of natural gas to extract oil from the oil sands. He has urged the new government to rebuild the Heritage Fund that he had created as a rainy-day reserve for the province and that his successors largely spent. He warned that the whole structure of oil royalties in the province should be revised because the people of Alberta were not getting their fair share. And he urged Alberta to take a leading role in the development of federalism.

There appears to be no windmill at which Lougheed will not tilt. He caused some agitation by suggesting that the oil industry should pay half the cost of twinning the dangerous Highway 63, which runs 400 kilometres from Edmonton to the oil sands boom town of Fort McMurray. Brandishing a clipping from the morning paper, he suddenly focuses on plans by American refineries to expand their capacity to handle Alberta oil, particularly production from the oil sands: "This is exactly what I'm opposed to," he declares. "These are our jobs. The best jobs in the oil sands are on the refining side of it. We should be having the upgraders here."

There is a key idea underpinning Lougheed's complaints: It's our oil. The people of Alberta are paying for the boom in high prices, but they're not getting the benefits of the boom in high royalties. And, as he was with Snow, he's adamant that it's up to Alberta where the oil goes. "We're the owners of the resource and we're the sellers, in a sellers' market. We should be trying to get a second buyer in Asia, and in China in particular. Let's get China interested in a long-term contract--not ownership; they don't need to do that. But let's get a pipeline out to Prince Rupert and let's get the oil on the tankers and let's get another market. Any seller is better off having two buyers than one buyer."

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