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The price of oil

in Featured/To Each Their Own by

In 2008, award-winning journalist Andrew Nikiforuk published a remarkably clear and well-researched assessment of the devastating impact being wrought by the tar sands upon Alberta and, indeed, all of Canada. His book Tar Sands: Dirty Oil and the Future of a Continent pointed out that the destructive impact of oil development in the tar sands was not just restricted to the environmental devastation, which will leave much of Alberta looking like a nuclear wasteland for generations. Oil development, he points out, has also had a very negative impact on democracy and civic freedoms almost anywhere that it occurs.

This side-effect of oil development has been noted by other researchers, and it’s being studied with growing interest and concern. Nikiforuk refers to it as ‘The First Law of Petropolitics’: “the price of oil and the quality of freedom invariably travel in opposite directions.”

Their research backs this up, from Russia, Venezuela, Iran and Nigeria to Alberta and the American coal-mining, oil-producing states. The political starting point in each of these cases is different, but the overall trend is the same, and the pattern tends to go as follows. States, provinces and countries that start to rely on oil production for their revenue become highly reliant on doing whatever it takes to increase oil production, which usually means sacrificing public freedoms and democratic rights. They tend to use oil wealth to reduce taxes; as a result, citizens become less interested in what government is doing (since it’s no longer doing it with their tax money), voter turnout drops, and incumbent governments have more money with which to curry political favour and buy political supporters. There’s a direct link between increasing oil revenue and decreasing voter turnout in almost every democracy studied. Furthermore, governments tend to become more secretive – often reluctant to release the finer details of what they do with their new wealth and what deals they are making to obtain it – and more brazen about defying public or media demands for accountability. They can afford to set up agencies and ‘think-tanks’ which are supposedly arms-length but really just provide PR support for the government. And despite public anger and resentment, they stay in office: “Oil also insulated bad government by giving it the capacity to survive public disapproval with lots of cash.”

“The price of oil and the quality of freedom invariably travel in opposite directions.” – Andrew Nikiforuk

Such has been the fate of oil-producing regions of the world, and Nikiforuk’s work is only one of many research studies demonstrating this pattern. Is it a pattern we are also now starting to see play out in Newfoundland and Labrador?

Freedom fail

In 2009, the Western Star reported on an audit of freedom of information laws across the country which ranked Newfoundland and Labrador near the bottom (we earned a C+). The independent audit – conducted by the Canadian Newspaper Association – reported such bizarre occurrences as denial by government offices that electronic files existed despite strong evidence (print-outs) that they did, and the provincial government’s refusal to release briefing notes on carbon taxes. The provincial government also claimed authority to designate a wide range of “commercially sensitive” documents as classified, and to exempt Nalcor from public tendering laws.

The First Law of Petropolitics, indeed.

Granted, the following year the provincial government improved its overall grade (to a B- ). It will be interesting to see what grade the province earns this year, in the wake of ongoing disputes between the provincial government and the Auditor General over what documents ought to be accessible for purposes of public accountability (one of the issues under dispute is – predictably – access to information from the Offshore Petroleum Board).

Open the House

And, of course, the currently stalled nature of our provincial government’s democratic operations is enough to send one’s head spinning. As CBC reported earlier this month: “The chamber at Confederation Building was open for debate just 33 days in 2011. Other than 2003, that’s the lowest figure in at least a quarter-century…The dearth of sittings in 2011 pushed Newfoundland and Labrador to second-last in the legislative attendance list…”

These distinctions are an embarrassment to the province; doubly so since it means our government is preventing elected officials from doing the jobs we are paying them to do. Premier Dunderdale’s bizarre excuses – ranging from the argument that there’s no work for them to do, to the argument that the legislature is dysfunctional and not a healthy place for debate to take place – make no sense from any rational perspective, but they sure fit in with Nikiforuk’s thesis regarding the behaviour of tin-pot petro-states. We fought long and hard for the right to our own democratic assembly over 150 years ago: a government that is too lazy to make use of that proud, hard-won achievement insults our entire heritage.

Not to mention the practical consequences: since an election that occurred several months ago, this province has seen its search and rescue operations under threat, fisheries plants closed, and now $100 million worth of work from the Hebron project potentially being taken from Newfoundland and Labrador…and this is just the tip of the iceberg. And regardless of what one thinks the government should do about these things, surely the most obvious thing for the government to do is to at least talk about them. Yet by keeping the House closed, the government sends the message that not only are they incapable of effectively reacting to the threats facing this province, but that they don’t entirely care about them, either. Perhaps their intention is to use their oil revenues to fuel some form of public spending as a distraction from these woes (which, hopefully, will be forgotten about since the government is not permitted to meet to discuss them)? Small comfort that will be to the fishers sailing the oceans without effective search and rescue, or the communities around the coast that are being emptied of jobs while hundreds of millions in contracts to extract and process our oil go to other parts of the world.

…the government sends the message that not only are they incapable of effectively responding to the threats facing this province, but that they don’t entirely care about them, either.

The First Law of Petropolitics is one which, sadly, it appears we are seeing take hold even here on what is supposed to be a unique and special corner of the globe.

When I read Nikiforuk’s book, it was very much my hope that Newfoundland and Labrador would avoid the fate of other failing democracies in its efforts to avoid this manifestation of the “resource curse”. After all, oil was supposed to be our great salvation: an opportunity to give us back our pride and for us to leverage our great skills and capacity for hard work, to rebuilding a devastated economy and positioning us for a better future. Surely our proud heritage and strong culture would prevent us from becoming a secretive, paranoid state served by rapacious, oil-greedy politicians?

The evidence before us does not inspire.

The calls by the auditor general for greater access; the calls by the opposition for more debate on vital public issues; and the calls of the public to open the House of Assembly and continue the work of our democracy, are more than just the gripes of angry politicians.

They are calls to preserve our democratic culture and show that Newfoundland and Labrador is greater than a tin-pot petro-state. They are calls to ensure that our proud heritage doesn’t grind to a greedy, petty end. They are calls to show that we are as great and stalwart a people as we tell ourselves we are.

So let’s open the house, open the books, open the debates, and get on with it.

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