Isn’t it good, Norwegian wood?

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The sweepstakes that is the oil and gas sector is dominated by short-game players – those who build and boom and inevitably bust and break the bank to survive until the next cycle comes round to titillate the itinerate wildcatters of the corporate world.

In their wake, of course, people lose their jobs, houses, bank accounts, and any semblance of stability and security. If you don’t believe me, just look what $48-a-barrel oil is currently doing to Alberta’s economy. It’s now cheaper to leave the stuff in the ground; two years ago, such a proposition would have been heretical to the financial institutions that happily floated low-interest debt to exploration and drilling companies.

In this volatile segment of the natural resources sector, things change – and they change fast. Understanding precisely how this calculus works has never been a strong suit of any provincial or territorial government in Canada. The words “protecting the downside” has rarely issued from the mouths of energy-rich premiers (not, at least, since the days of former Alberta premier Peter Lougheed, who had the good sense to siphon billions of dollars from the petro-economy into a “heritage fund” in the mid 1970s to, again, protect against the inevitable downside associated with oil and gas development).

Of course, here in New Brunswick, which sits on a potential resource of 70-trillion-cubic feet of shale gas, we don’t endure this particular problem. Oh, lucky us! For, as we hem and haw over the proper “social licenses” that our long-term debt purchases in place of responsible tight-play development, our collective complacency about the future keeps us warm, cozy and competitively irrelevant on a planet that, oftentimes, prefers to face its challenges head on.

But should we ever choose to join that planet, we would do well to rip a page from Norway’s playbook on managing a vast oil and gas industry without falling prey to the temptations of short-game profiteering, gambling and other parlor tricks of chance.

A nice piece by Susan Ormiston, posted on the CBC news site last week, explains fulsomely how that Scandinavian country of five million souls got its energy portfolio right decades ago.

“Norway today sits on top of a $1-trillion pension fund established in 1990 to invest the returns of oil and gas,” she writes. “The capital has been invested in over 9,000 companies worldwide, including over 200 in Canada. It is now the largest sovereign wealth fund in the world. By contrast, Alberta’s Heritage Savings Fund, established in 1976 by premier Peter Lougheed, sits at only $17 billion and has been raided by governments and starved of contributions for years.

Quoting Rolf Wiborg, a former oil and gas engineer with the Norwegian government, Ms. Ormiston reports, “For the last 10 years, when nothing went into the Alberta fund, and we put a lot of money aside, the profit went out of Canada.”

The result: Every citizen of that cold, northern country is a technical millionaire. Meanwhile, every citizen of this cold, northern country. . .well, isn’t.

The secret, Wiborg says, is simply that Norway “doesn’t change” its “policies with the changes in the oil price – you can’t do that. Lougheed’s government in Alberta knew that. They made policies, then they left them behind.”

Meanwhile, the Government of Canada, which counts on a certain stipend from the oil and gas sector to balance the national accounts, not only changes its polices routinely; it changes the date of its budget based on the fluctuating price of this transparently hostage-taking commodity.

It is time, perhaps, for Canada to start playing the long-game with its natural resources.

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