BUSINESS WATCH

Chairman Jack’s guide to our dismal politics

‘Alberta’s government operates on simplistic terms at an IQ level of taxi drivers—though that’s maybe an insult to taxi drivers’

Peter C. Newman November 5 1990
BUSINESS WATCH

Chairman Jack’s guide to our dismal politics

‘Alberta’s government operates on simplistic terms at an IQ level of taxi drivers—though that’s maybe an insult to taxi drivers’

Peter C. Newman November 5 1990

Chairman Jack’s guide to our dismal politics

‘Alberta’s government operates on simplistic terms at an IQ level of taxi drivers—though that’s maybe an insult to taxi drivers’

PETER C. NEWMAN

BUSINESS WATCH

Jack Pierce’s influence transcends his chairmanship of Ranger Oil Ltd., one of Canada’s last major independent energy companies, because unlike most Oil Patch executives, he has opinions on everything—and is not afraid to state them. When I dropped in to see him at his Calgary headquarters recently, his company had just struck oil 5,300 miles away in the Jura Mountains, near the superhighway from Geneva to Lyons, and was about to bring on-stream 50 million cubic feet of natural gas a day from the Anglia field in the North Sea. Pierce’s opinions reflect his world view of people and events;.

Jean Chrétien: I know him well, can stand on a street corner and patois with him. He thought he could get votes and financial support in Western Canada because everybody in Western Canada knew him, and lots of people did from his early cabinet period. But he is enormously disliked in the West, particularly since part of his policy pledge is to unravel the Canada-U.S. Free Trade Agreement. I told him that with such a plan there is no way he will get moral or financial support out here. Chré' tien and John Turner both remind me of Anthony Eden, who was number 2 under Winston Churchill. Everybody considered him the heir of Churchill—who did all the thinking for him—but on his own, he was a dismal flop.

The Gulf War: Despite the wide swing in oil prices, most Oil Patch chief financial officers are using $21 a barrel for long-term planning purposes, which is $5 more than when the Iraq thing started. Let’s face it, from a Canadian context, the whole Middle East situation has been extremely favorable, because we are a net exporter of oil. In terms of the national economy, that should more than offset price increases for people’s gasoline, which is used in a highly wasteful way. From a plain, selfish point of view, the more conflict there is in the Middle East, the more favorable it is to Canada. But some of the possibilities are devastating. It could turn into a Vietnam that would make that

war look like a kindergarten, with thousands of hostages killed. Saddam Hussein has Kuwait, and he is not going to let go. It is a big mess, but we will leave that to the politicians, while we oilmen are happy with our oil price.

Brian Mulroney: There is no doubt Mulroney has been disappointing, except that certainly as far as Western Canada is concerned, he did finally fulfil his promise to Peter Lougheed to unravel the National Energy Program. On the other hand, he did that only after Peter played the tapes back to him of his campaign speech up in northern Alberta, where he had made that pledge—otherwise there is a good chance he would have reneged on it. Most people in the Oil Patch do not like Mulroney because they are very decisive men who make quick judgments, and cannot stand his wishy-washy compromise approach.

The GST: The only thing that bothers me is that they have gone at it backwards. We already have one of the most overwhelming bureaucracies in the world, and now we are going to enlarge it without necessarily reducing the deficit. The Canada West Foundation did an indepth study of Canada’s debt and deficit situa-

tion, and when the volumes of homework came in, a few of us got together at the Ranchmen’s Club to study the results. It took all afternoon, but by the time we came up with the bottom line, we discovered that Canada’s per capita deficit—including the provinces—was not twice, but four times as high as that of the United States, and that is a terribly important number.

Free Trade Agreement: I speak with some knowledge and possibly a little prejudice, because Simon Reisman, who negotiated it, is a member of our board, but I think it is monumentally favorable to Canada. It takes away the soft cushion Ontario has enjoyed through highly effective tariffs so it could export to the rest of the country with protection against any imports. For example, through the whole of the early oil developments here, we were paying about 50 per cent more for valves than they could be bought for in Montana.

Canada’s Oil Reserves: It is important to realize that we are not a major player on the world oil scene. Canadian light-crude reserves are under three billion barrels, while the North Sea alone has something like 20 billion and Norway another 15 billion or more. Total world reserves are now about 250 billion barrels, so we really do not count. We are swing players at best, but from a parochial point of view, we are self-sufficient and that is very important.

Hibernia: It is an amazing political animal, basically uneconomic and fraught with giant physical risks. It is right where the icebergs come down from Davis Strait, and we know from striations on the ocean floor that the big ones actually scrape the bottom. They could dig into the bottom and wipe out the oil rig’s subsea completion, which would mean enormous incremental costs.

The Beaufort: It has been very disappointing, with none of the discovery companies able to establish a large, continuous reserve. Every well is different and it is a difficult area to explore and even more difficult to finance. I said a few years ago, in a somewhat heated moment, that all Canadian frontier fields were uneconomic. Well, if you put the whole package together, they are.

Meech Lake: I have never seen anything handled in a more upside-down manner. The provinces that stood to gain the most on federal handouts—Newfoundland and Manitoba— killed it. And the province that stood to gain the most by killing it—Alberta, which can stand on its own—supported it, because Don Getty wanted Stan Waters named to the Senate. I sometimes think the Alberta government operates on very simplistic terms at an IQ level of taxi drivers—though that’s maybe an insult to taxi drivers. The government thought that if Mulroney did not appoint Waters, he would run provincially and the Conservatives would get wiped. So they supported Meech, and got Mulroney to put him in the Senate. It was no more complicated than that.