Government-In-Waiting - Transparent Governance

Notwithstanding objections that we do live in a democracy, regulatory affairs can tend to assume people to be guilty, having to prove their innocence.

The ERCB (Energy Resources Conservation Board), the petroleum production regulator acting on behalf of Albertans, has again announced a shut-in of natural gas production of gas reserves found over bitumen reserves in the Alberta oil sands.

The first time this was done, it shut in a major part of the production of one of Alberta's pre-eminent producers. That shut-in threatened and produced serious hardship for that company and others. While most of the gas was eventually freed for production, the producer had to throw massive resources to the effort to produce evidence that its production did not threaten access to the bitumen beneath the gas.

It had to make its case on a well-by-well basis.

It's therefore pretty clear that the bitumen lessee had to show no substantive evidence to bring about a shut-in order. It's also clear that the potential for bitumen royalty was considered greater than that of gas royalty. In this exercise of democracy, money did the talking.

This was a patently unfair process to the investors and employees of that company as it had purchased its lease rights as access to that gas in good faith.

When the ERCB shut that gas in, the regulations that it exercised enabled it to do so without having the Alberta government repaying any portion of the purchase price for those gas leases, much less the capital cost of the production improvements the company had added since then.

Now, some six years later, the Calgary Herald reported on October 16, 2009 in "ERCB orders gas wells shut in" that the ERCB has used basically the same process again. The oil sands lessees presented geo-physical theory that removal of the gas could plausibly make recovery of the bitumen more difficult.

http://www.calgaryherald.com/business/ERCB+orders+wells+shut/2109625/story.html

Again, the gas producers are expected to prove, on a well-by-well basis, that the removal of gas will not negatively affect bitumen recovery.

So apparently conclusive evidence supporting the claim one way or the other is available as has been proven in the previous round.

It seems to me that Albertans should be demanding a more open and fair process. I'm sure such a process is available.

As I understand the situation, the gas producers bought their gas leases at auction directly from the Crown or from another producer who had bought the leases from the Crown at auction.

The bitumen producers bought their leases, also at auction from the Crown or from others who bought the leases at auction from the Crown.

Were either set of producers alerted to the fact that the ERCB may shut down operations or allow operations that could threaten their ability to operate or at least operate relatively profitability?

Maybe that happened, at least it could be expected after the 2003 round of like-minded shut-ins.

The point is, there is a vested interest on behalf of the gas producers, the bitumen producers, and Albertans expecting royalty income from both sets of leases, in seeing the development process go ahead in a rational manner. Of course I am leaving out the contractors and employees who build, service and operate production facilities for both types of producers and the customers dependent on that production.

It seems to me the government has a responsibility to ensure the smooth working of the development process.

The rules, in geo-physical terms, need to be spelled out so that gas producers know which gas-over-bitumen leases might not be viable. This should be relatively straightforward as conclusive evidence of such is available as proven in 2003 and 2004.

Where an argument arises between bitumen and gas producers in any case, why can't the process be held in open hearing where the three parties can have their arguments on the table prior to any party making a capital investment in leasehold development.

Shareholders of the respective companies can marvel at their executives in action as they protect shareholder interests. Albertans can see the evidence supporting the royalty income for each type of lease taking precedence where precedence need be taken.

Production shut-ins, impairing royalty and corporate incomes, are minimized.

The scientific evidence can speak for itself.

The impact on royalties, jobs, environment, communities and so on can be described and where those visions compete, Albertans can see and understand the evidence entering into the decision-making process and supporting the final decision.

I think most of the cynical side of the politics of the situation can be removed with such a process.

Where the government does not show a willingness to undertake such a process, Her Majesty's Loyal Opposition as Government-In-Waiting, can invite the parties to participate in such a process intended to influence the decision while demonstrating the effectiveness of participatory democracy.

Albertans will realize that their interests are being considered, including Albertans as passive collectors of royalties and Albertans as active generators of royalties.

As much as possible then, even in the cases of leases granting access to resource reserves, there can be a meeting of the minds of Albertans and potentially competing producers.

The dispute mechanism can be open and transparent with accountability for judgments used in decision-making.

Most importantly, all Albertans' interests and thereby Albertans themselves are respected and encouraged to be respectful of each other because the regulatory process will assume good faith on the part of all parties and enable them to operate without penalty based on allegation alone.

The Government-In-Waiting can demonstrate what it means to live democratically where one is not assumed to be guilty, having to prove her or his innocence of allegations based on insubstantive evidence.